CRISIS AND ISSUES MANAGEMENT
THE CHALLENGE:
One of America’s largest equity traders was in full crisis: accusations of front-running, multiple NASD regulatory violations, and a class action lawsuit had led to WSJ Page One stories (never good!), plunging stock price, and the resignation of its Chairman.
The new CEO needed to restore confidence in the firm’s ethics and business model among clients, investors and employees. We were called in.
Research
In less than a month we conducted more than 100 in-person hour-long interviews with employees, management, clients and investors. We kept the format and content of the interviews open, to discover what lay beneath: We needed respondents to guide us to the real issues that had allowed this situation to take place – and they did.
Insight
The company was a victim of its own success. It still functioned like a startup, where incompatible priorities, and conflicts of interest, had not been resolved.
Strategy
Changes could not wait – the possibility of yet another crisis emerging was real. Issue need to be solved both structurally (profit model) and procedurally (policies and processes). New management needed to chart a new course, not simply address a present problem.
Results
Our recommendations lay the ground for a turnaround: new policies, redesign of trading spaces, leadership changes, and improved internal communications. The Street regained confidence and the stock price rebounded.