The Finnovate Show
The Finnovate Show

Episode · 5 months ago

Mark Cohen: An insider’s view of M & A implementation

ABOUT THIS EPISODE

Mark Cohen, a senior financial services executive, shares five keys to his success in Operations in the Capital Markets, Treasury and Transfer Agency worlds. Based on his thirty plus years of experience in global financial institutions such as JP Morgan Chase, Bank of New York and CIBC, Mark discusses lessons learned, how he dealt with the challenges of change and the factors that have impacted the industry and will drive innovation in the future.

...as a leader of your company, you must stay up to date with your strategies and execution or risk obsolescence. Welcome to the Fin of a show, financial services innovators bringing you the future today and now here's your host, jerry Purcell mm It's the fun of it. Show brought to you by Innovation three 60 groups. I'm jerry Purcell. Get ready to think about your biggest challenges and capitalize on your biggest opportunities after this. Executives depend on external consultants to fill knowledge and experience gaps or to have an experienced mine audit their thinking. The Innovation 3 60 group brings together a wide range of proven thought leadership from around the globe and cost effectively makes it available to you. Get the insights, advice and systems you need to succeed, learn more at www dot innovation 3 60 dot com. Our guest today is Mark Cohen. Mark is a seasoned executive who spent much of his career designing and leading change in the process, people and technology arenas. Mark has worked in several of the world's best known financial institutions including C I B C, Jpmorgan Chase Bank of new york and Solomon Brothers. A resident of Toronto. His work has taken him to the major financial centers around the globe. Places like new york city, London, Tokyo and Hong kong. Today, Mark and I are going to talk about his career in financial services, some of his experiences and learnings and five core principles that he espouses to ensure success in this industry, Mark, Welcome to the show. Thanks jerry. So so you've been around a while and you've seen a lot of change in your career, what, what, what sort of sticks out to you as...

...uh, you know, I sort of observations. Yeah, no, it's, you know, I kind of went back in my career and at different stages, a number of things that kind of do stick out, but if I had to Kind of select say one period of time that truly Kind of sticks out for me, it's, it's probably the period between 2000 and 2002, probably the most challenging period of my career, both kind of professionally and, and personally and uh maybe just give a kind of recap of that three year period and what kind of change I had to endure and an experience over that time. So, you know, in 2000, I was relocated by Jpmorgan from their Hong kong office to the Delaware office to be part of their kind of shared service center of excellence. So, you know, moving back from Hong kong, going to a different role in a different location, obviously quite, quite challenging. Early 2000 and one, there was an announcement of the planned merger between Jpmorgan and Chase, I had no idea what to expect. I've spent time overseas, but this is my first involvement in a major corporate kind of transaction and this was obviously a mega transaction between Jpmorgan and Chase, I was selected, you know, I was a legacy Jpmorgan employee, I was selected to be part of the integrated kind of ops management team. Once the you know the merger was announced, I I spent monday through friday in new york weekends back in in Delaware slash pennsylvania with my family and so you know that was a challenge in itself I think aside from the professional challenge um the personal challenge of moving back to the US with a family, three daughters under six years old to a place outside...

...really the metro area was a bit of a challenge getting my kids into schools and adjusted and I can you know I remember clearly uh one of my older daughter on the way to the airport in Hong kong saying daddy daddy why why are we moving, why are we you know why are we moving? And I said well you know my job and she said to me would you promise me if if we really don't like it can we move back to Hong kong? And I said I promise you if you really don't like it, you know we'll move back to the Hong kong knowing that she would obviously enjoy being back with family and friends in the U. S. So um that on top of all the professional challenge was interesting. So you know we're in the midst of this Jpmorgan Chase manager in 2001 And obviously unfortunately we came to the events of 9 11 and the events of 9 11 really where it took place in the midst of our kind of integration between the two organizations. I was working at a four new york plaza, which is literally six blocks from the World Trade Center. So, you know, while we weren't kind of, you know, physically right there, there was obviously a real impact and I can I clearly remember the moments when uh my boss called us into his office and kind of told us what was going on and you know, that in itself obviously was was was a massive impact on me and this was a defining moment for me from a both a professional and a personal perspective. Yeah, I can, I can relate, my, my dad was a banker and my whole life was spent going from town to town almost, he would be in a branch and be a year and a half and then on to the next one and I'm sure I've asked him, I asked him several times, you know, it was, if I don't like it, can we go back? So I can totally, totally, totally relate to that. Also actually the, for those of us who've been around a while, the Y2K...

...was taking place around that same time, you know, the biggest thing that was going to blow up the whole financial services industry kind of thing, right? So it's actually a good point that I didn't, you know, given what I experienced, that was probably, well, it's significant, you know, it wasn't personally, significantly, you're absolutely right, there was a lot of effort and a lot of the preparation was prior and I was obviously involved in that from, from an Asian perspective for Jpmorgan. So, so capital markets has been the center of a lot of the, of the work that you've done over the, over the years. And, and it's, it's, I would say probably in the early stages of digitization, perhaps, perhaps a little bit behind some of the other segments of financial services. But tell me how today is sort of impacting the capital markets environment and the need to innovate. Yeah, no, it's, uh, you know, you're right, I mean, I've spent a lot of time in capital markets going back to the early part of my career and you're absolutely right jerry, that there has not been a whole lot of innovative change as it relates to, you know, capital markets kind of business, it's institutional based, it's, um, you know, it's proprietary. And from my perspective, they really, you know, unlike kind of the kind of retail and business banking aspect of the industry, it certainly hasn't innovated as quickly or as quickly as, you know, as necessary. And, you know, honestly, I still don't see a whole lot of innovation kind of within the capital market space. I mean, I've been out of it for a number of years now. So there may be some work, you know, but I can speak to, I think what's really driving kind of innovation across the financial services industry, because I've been in different sectors, whether the capital markets or Treasury corporate trust and and certain transfer agency type of work. And you know, from my perspective when I can...

...see the standard drivers of innovation, increasing competition, the disintermediation that's going on with Blockchain, I think there's an increased level of M and a activity that's uh kind of driving organizations institutions to innovate obviously, you know, margin compression, interest rates being close to zero if not zero drive a lot of the economic from a cash flow perspective with some of these institutions. So that's I think driving also the need to innovate. But I do think that there's a couple of more recent topics that I believe we're driving most of the innovation in the industry. And you know, and you know, part of it is The fintech, fintech evolution is one I think the other the other that we haven't probably realized yet is the lessons learned from the last two years, you know, and going from a in office environment to a work from home or a hybrid environment. And I do believe that industries and companies should be leveraging what they've learned from these last two years. I know I've learned a lot and being able to work, have an operations work remotely, but technology obviously is a driver of being able to work remotely from so many from an office perspective, um transaction processing settlements, et cetera. So I think that's going to drive some additional innovation, you know, in the future. I also think that a lot of the information security challenges and some of the cyber attacks that have taken place in the market or in the, you know in in the public purview obviously is front and center with you know, a lot of institutions that are housing personal information on behalf...

...of their clients and and their investors and so having a kind of robust information security program from my perspective is there's also is driving and will continue to drive kind of innovation. Yeah, we've had guests on on the program a couple of months ago and she's an expert in quantum computing and uh you know, one of the things that's coming in in capital markets and in in the trust environmental stuff is the impact of that and that that will be material I think in terms of the impact on the markets and what it will do to the back office environments. Very cool. So so uh I guess your your travels over the years, you put yourself in the middle of change really and a couple of large corporate transactions in particular where at some level or not. And in terms of how your career was progressing at some level or not, you were asked to take on some responsibility for integration. Tell me some more about that. Yeah, that's uh yeah, I mean that's been at the core of my my career and and experiences and you know, I've I've, you know, I've been involved in and I would say three large corporate transactions I refer to the Jpmorgan Chase merger. It was also involved in an asset swap between Jpmorgan and Bank of New York in about 2006. Most recently I've been working for privately owned financial institution that was also was sold to a large Canadian public company. So and and and these are these are kind of taken place at different stages of my career. So my involvement has been different in each, in each, in each of these transactions. The one thing that kind of a common prove them all is that I've always been on the side of the company being acquired, not acquiring, so you know, you know, but you know, and I've learned a lot from each, each...

...transaction that I've that I've been through and uh you know, when I reflect upon how each of these transactions progressed and the challenges they faced and you know how they got through them. I do think that what's evolved over the, I would say last you know, 10 or 15 years is um kind of an increased focus less on the technical change, but more on the kind of softer change as companies acquire others as companies merge. You know, the concept of change management, getting HR communications involved back in, you know, back in the day just wasn't really prominent or really relevant. But the last couple of changes that I've been through human resources, the communications department, even some external consultants were brought in to, you know, develop change management program because I think the companies realized that that could really make or break the success of a transaction. I mean technically it makes sense. You can migrate data, you can combine systems, but if you can't get the combined organizations to work effectively together, you know, I don't think you'll realize the full benefit of any corporate transaction. I remember being in the middle of one myself and one of the things that the leadership did was to force the parties from each of the predecessor companies to work together on projects and what they found was that themselves to people on the project would find that these people aren't so different after all, they're the same as me and that sort of thing. That was there, was there any sort of insight or or sort of trick of the trade that you used in your travels, you know, um not you no, no, no, no. Kind of kind of silver...

...bullet to be perfectly honest. I from my perspective, I kept very open, you know, a lot, a lot of times when you're being acquired, you kind of shut down, you don't want to share, You don't want to cooperate, it's natural, you know, you don't know what your role is going to be in the future and that's probably the biggest driver is, is, you know, you're acquiring company, you've got a senior management team, you haven't determined yet what the kind of integrated model and structure is going to be, but you need everyone to work together and you know, and I from my perspective, you know, I I just kept kind of open and fairly transparent and you know, that's served me well because you know, and most of the transactions I've been through, I was brought over for a period of time to help settle things down, do some integration kind of hand off if that was the plan to uh kind of the go forward kind of organization. So again, no silver bullet per se. But just just kind of being open and communicative with the acquiring company and and you know, being cooperative the world is moving fast. It's difficult to keep up. Your executive team routinely needs new ideas to keep them ahead of the competition. Imagine having a plan in place in 30 days to focus your innovation efforts, improve customer experience, accelerate your move to digitization or increased speed to market our guide to accelerating your innovation agenda provides you with insights and time saving resources to plan your path forward, contact jerry to book a quick call or for your complimentary copy at www dot linkedin dot com backslash in backslash jerry Purcell, G E R r Y P U R C E L L or email jerry at jerry dot Purcell at...

...innovation 3 60 group dot com. So, so while we're on the subject of merger integration, I don't know whether we should expect some additional consolidation or, or disintegration or disintermediation, I guess they would call it, but you know, what do you think the impact will be? And, you know, there's a particular transactions that are outside of financial services, but you know, there will be others like J and J and G and stuff like that. What do you think about all that? How do you think that's going to affect things? Yeah, that was, you know, that, you know, I was really intrigued to the timing of kind of when G came out and J and J came out to announce they're going to kind of restructure and kind of break up, uh, kind of kind of business units and, you know, you know, hard to say what the true kind of impact of that's going to be on the consumer, on the corporation, on the employees. But you know, honestly, I wasn't 100% sure why there was a need to kind of break up. There are a lot of larger organizations that have very different business lines that have very little kind of cross selling or interaction opportunities, pretty much everything, pretty much every big bank, in other words, Absolutely. And, you know, and, and really, you know, you can structure those in the plum Beom within a corporate structure I think, I don't know, you know, you know, and I think the only, the only challenge is how how support allocates their time to support each of the different business units, whether you know, whether it be resourced to his capital, you know employees uh systems and maybe they feel that you know this is a a more effective way to be transparent, but you know that from my perspective, you...

...know any corporate transaction, this goes back to my experience with corporate transactions like this, is that you know, there's a distraction from the market during this whole time, there's absolutely additional costs to execute the change and ultimately there may be a loss of talent as you go through this restructuring and change. So you know, speaking to you know change management and communication, if you don't, if you don't get that right transaction like this, I think, you know, things may not pan out as you As one would have expected it like Yeah, yeah, Somebody's going to make some money though, right? Probably not somewhere. So you mentioned 9-11, but we haven't yet mentioned the most current catastrophe covid 19, so they, so that must have been quite the experience to be running an operations unit and sort of come up on that. What what uh what sort of, you know observations which make both, that yeah, no, it's uh, you know, timing was, you know, you can never predict the timing on this, but you know, and from my perspective was running an operation that was fairly paper based, there wasn't a whole lot of internal technology to assist with the, you know, kind of the work from home or the remote working, you know, environment, you know, in addition you have, you know, a number of seasoned administrators who have never had to worked remotely, they used to working in the office with the paper. But honestly, you know, as soon as we decided, you know, that we needed to move to a work for hybrid work from home and model. It was it was scrambling for laptops, which you would...

...think would be available, but every big retailer sold out of laptops, we didn't have enough internally beg borrow and steal laptops and then, you know, getting um, getting people to access systems kind of remotely through VPN. You know, you've got challenges where some people don't have enough wifi in their homes to connect with VPN and to connect to our systems to do their work. I think the biggest thing we did was we had to move to a tactical kind of scanning of all incoming documents that we have to process on behalf of our clients and their shareholders. And so, you know, you know, I quickly quickly moved to a, you know, just a, you know, setting up a very tactical rudimentary system where you know, we had a scanning group and they would get incoming documents, they would scan, they would save to a folder and people would, you know, would have to access remotely. And Again, simple things like people working from two screens to monitors. Uh kind of a foreign concept to a lot of people and saying operations area, you know less so you know the front end or client management or sales, but operations folks, they tend to be focused on get this paper, I go into the system, I process the transaction, it settles, I'm good, I move on to the next one going toddling back and forth. They didn't know the word toggle between, you know, between monitors. So we, you know, um we had we you know, we had a number of challenges initially, but I have to say people responded extremely well, most extremely well and um I would say within within a month, like I think by the end of March We were up and running with 90% of our office staff working...

...from home and 10% working from the office. And we've kind of kept that throughout the whole pandemic plus or minus. You know, it's it's you know, productivity um kind of suffered. So challenge there is you've got to manage, you know, service levels backlogs because you're not gonna be as productive and so but I was, you know, we had we had the reporting the metrics in place so we knew kind of what our kind of work in progress was and what our backlog was and so we you know, we we obviously obviously quite transparent, we brought in some additional resources that were needed to kind of supplement you know this this kind of work remotely model and uh you know, again we learned a lot I think I think individuals learned a lot about you know, how they can work differently than kind of in the office. I think you know, aside from that challenges, I think managing people, you know, remotely is is you know you can get the work done but actually managing people remotely is is challenging not everybody has you know the equipment to do zoom or go to or whatever. So uh you know it just I think I probably spent I normally spend about 25% of my time kind of with people and managing people, not just my direct but the full organization, I would say that over the last Couple of years I've probably spent closer to 50 of my time just communicating and being available and somewhat empathetic to, you know, some of the the challenge is that people were facing because you know without the without the administrators and the folks processing and you know, you really don't, you know, you have you know, you're gonna have some challenges with clients and businesses. Yeah, yeah, I think there's a lot of organizations that found that they could do more than they thought they could. And a lot of barriers just seem to disappear, you know, uh sure,...

...paperless and all that kind of stuff, you know? Sure. So there's lots of other stuff going on as well. You mentioned Fintech and rick tech and all those kind of things. But what other changes are coming out of the market and and sort of how will they sort of affect the investment world and why do you think those are important? Yeah. Yeah, no, that's, yeah, there's, you know, I do think that, you know, I've thought about it because there's a lot of external forces that are driving kind of organizations kind of to adapt and to change, you know, kind of going forward and, you know, and thinking through that, um, I think different size institutions have different challenges and and how they respond to those challenges. So you got the, the larger larger institutions that have to affect change, probably have a level of kind of bureaucracy in place that may prevent a company like that to execute change quickly or quicker or as quickly as they need to, you know, there's approval, then there's internal workings etcetera, and there's, you know, there's all the project and project management. Um, so I think larger institutions, you know, uh, will be challenged as far as the execution and, you know, and the timeliness of the execution, I think, you know, and I've just come off, you know, just you know, you know, working with a smaller to mid sized financial institution that was probably owned and their challenges, you know, they don't have the internal resources and the thought leadership to be quite honest to execute change and and honestly, you know, if you're privately owned there may be some limitations in funding um to execute kind of some of the change that's going on and you know, I think what I've realized and I think others are realizing that no matter what size of...

...institution you are, you have to have partnerships and strategic alliances with Um I would say 3rd party companies like Fin techs or other type of vendors that are servicing, you know, uh you know a bigger portion of the industry and you know, are probably quicker to execute and provide capabilities and services to different types of institutions. Um I know, you know, you know, in my in my most recent role I had to partner with a number of strategic service firms whether it be uh you know, I. T. Consulting um kind of administrative, vendor management, you know, and and just broadly business consulting, you know, to assist us in kind of driving some of the change and you know, speak specifically to you know, prior prior to covid hitting, you know the company I was working for embarked upon a large multi year digitization program, two uh you know, look at how we can more effectively scan documents, a workflow, a robotics, an ai component to what we do and you know, we spent, you know, a fair amount of time, you know, getting that up and running and you know, we actually did our first release right before kind of Covid hit and you know, you know, it was a proof of concept that you know, we, you know, we were hoping that we would kind of continue and finish, but obviously Covid hit and you know, we had to move, you know, in a different direction, but um, you know, you know, we had multiple partners on that program, we had, you know, robotics partner, we had an imaging workflow partner, you know, we...

...have project management and you know having those strategic alliances with their experiences just proved invaluable. So one last question I wanted to ask and this is for the for the listeners out there, the, so you've been around for a long time, you know, as is evidenced by our conversation today, you've seen a lot of change, perhaps seeing a lot of things that didn't change, you know, all that kind of stuff as well. So so what observations and advice would you give and you know, I guess what we tried to do is to summarize them into five, what are the five concepts that you'd like to sort of, you know provide to our listeners out there. Yeah, I think, you know, the first one is overestimate the impact of change. Yeah and I deliberately didn't use don't underestimate, I said overestimate the impact of change because I I truly don't believe you know people fully appreciate you know, you know the impact of change. Uh so one of the things is overestimate the impact secondly and this has been kind of my kind of mantra through most of my career is don't over commit on key deliverables, be reasonable and practical because over you know and it's a fine line there between over committing and maybe sandbagging a little bit to be quite as used that term. Um I can't imagine anybody ever doing that but but you know um yeah I've always been you know realistically commit and effectively deliver And that's been my kind of go to mantra throughout most of my career. So that's number two I think third and there may not be in a specific order but you can never communicate or not, you know communicate, communicate communicate as you're going through change. I think firms struggle with the type and level...

...and frequency of communication, I think it's you know it's it's um it can make or break large transaction and you know if you need to again develop a if you need to engage a partner to help you with a communication program and plan to do it because you know they've been through this, they understand it, you know we internally uh kind of get it, but you know, we're so tied up with our work and our preconceived kind of ideas as to, you know, what needs to get communicated. I think that's that's critical. I think the other one I say is technology is an enabler for great service delivery, but not a replacement. So by that, I mean, you know, you you still need key individuals to effectively deliver service using, you know, a top technology. But you know, and and the company I've just come from, you know, uh we have a demographics where our clients shareholders, they would prefer to pick up the phone and talk to someone and so, you know, you can't discount your clients and their investors and their shareholders if it's a high percentage want to pick up the phone. So, you know, make sure that, you know, you know, you, you know, while you're leveraging technology, you still focus on your core client and their stakeholders and make sure that you, you know, provide the right quality service. Uh And then last one is uh and I guess it's a little bit redundant but don't understand on change management, I've been involved in too many transactions projects and when it comes to, you know, the cost of change management, you know, a lot of, a lot of lot of lot of senior...

...folks say, you know, can we do that on our own, why do we have to spend to bring in a firm to help us with change management. And and again, I I my my experience is that yeah, you don't want to overspend. But uh I think spending on it should be, you know, dedicated resources to help execute, you know, with the change management. So those, you know, I mean you got nothing kind of, you know, it's pretty simple, right? Simple. Basic kind of things that I think a company can do through its management. And those are the five that I took away. Excellent. Yeah. It's sometimes the simple things really that the most important. Absolutely. Thank you very much, Mark. So that wraps up this episode. And as always, I look forward to hearing thoughts from you, our listeners about today's show. Please keep the conversation going. If you like the show, tell your friends and please take a minute to radar show or to comment on linkedin. Go to www dot innovation 360 dot com or your favorite podcast site to find out more. And to listen to more shows stay safe and we'll see you next week. And thank you very much for chatting with me, Mark. I'm sure that the listeners will find it as interesting as I did. Thank you. Thanks jerry. I appreciate it. You've been listening to the Fin of eight show with jerry Purcell. If you like the show, share it on your network and subscribe on itunes or wherever you listen to podcasts and you can go to www dot innovation 3 60 dot com. To listen to more shows, download the transcription from Today's show or to contact today's guest. This is the innovate Show, financial services innovators bringing you the future today.

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