Matt Barrett & the CEO Mindset

Posted on | January 2, 2010 | 2 Comments

After a very distinguished and sometimes controversial long career in international financial services, Matt Barrett finally retired three years ago. That’s when he stepped down from being Chairman of Barclays Bank PLC after having been a long serving CEO of both Barclays in the UK and Bank of Montreal in Canada.

Here are some career facts he and I have in common.

We both are former bankers. We both worked for the Bank of Montreal at the same time. And we both have been CEOs. That is why I perked up earlier this week when I saw the Globe and Mail article about him called His Story is Still Being Written.

Now admittedly, there’s a whole lot that’s different between us.

Here is how that list begins. Matt is a half generation older than I am. He is much taller than me and my 6 feet. He has led much bigger companies and enjoyed much more success than I have even though with a BA, MBA and two professional designations, I have four more credentials than he does. And oh yah, he’s also much more chatty, charming and extroverted than I am too, something that maybe is due to his being Irish. That birth factor when combined with his charming personality and engaging nature might explain why he has had so many wives while I’m still living with and loving my first.

But no matter what others say (and he has had his detractors), Matt Barrett has been a tremendously successful large company CEO. In fact, I’d say he was by far the best of the three financial services CEOs I worked under.

So, if you are interested in learning something about how to develop a winning CEO mindset, I recommend you copy a few key pages from the Matt Barrett management ‘play book’ if you can.

Matt Barrett and His Approach to Management

Matt’ “rags to riches” background might account for much of what made him such a great CEO.

People should realize that what Matt Barrett learned along his route in life is the type of stuff that is available to anyone. If you are reasonably blessed with a decent family and good community, and even if you’re not, you too can learn what you need at home with your parents, in grade school or in your community, or even in humble jobs that may seem dead-ends to many. Significantly, I know this is one body of knowledge they don’t teach you at university.

Here’s my list of Matt Barrett important management traits:

Humble but very collected and confident
Sharpe / keen mind
Prepared to make tough business decisions when situation calls for one
Humanistic
Iconoclastic when warranted
Open, friendly and approachable
Engaging
Personable
Respectful
Goal oriented
Value focused
Always searching for new ideas that enable better ways of doing things
Team player no matter if he is the advisor, leader or subordinate
Excellent communicator (frank without being off-putting)

Matt Barrett: a Real UK-bred Horatio Alger Hero

Matthew William Barrett was born September 20, 1944 in County Kerry, Ireland, where his father struggled to make a living as a musician playing in local dance halls in the 1950s. As his family was relatively poor, Barrett was encouraged by his father to enter the banking business, which is why in 1962, he became a clerk at the age of 18 in the London headquarters of the Bank of Montreal. Sadly, Matt’s father died shortly thereafter of a heart attack. This left him as the sole supporter of his mother and sister. In a recent interview Matt recalled how “it aged me overnight. I was [then] THE man of the family. It changed me from being a young man having a good time into a serious career banker” (Ruki Sayid interview reported in the Mirror, October 18, 2003).

With his new found focus, Matt went on to impress his employers and win a promotion to management trainee at the Bank of Montreal’s Canadian head office in 1967. As part of that training he attended Harvard Business School, eventually becoming an expert in retail banking. Matt steadily rose through the ranks, so much so that he, Matthew William Barrett, was appointed BMO’s president in 1987. Then two short years later, he took over the top job in the Bank of Montreal, an institution whose roots went back over a hundred and seventy years to the days of the fur trade, when he was appointed their chief executive officer in 1989. In this, he succeeded William Mulholland, a divisive, American investment banker turned turnaround CEO who, after 16 turbulent and tumultuous years leading the Bank, had been allowed to far overstay his usefulness.

Barrett went on to lead the Bank of Montreal as CEO for ten years, only leaving them in early 1999 after his proposal to merger his Bank with the Royal Bank of Canada was publicly rejected by the Canadian Federal Government’s Minister of Finance. But Matt’s tenure as an international financial services CEO was not over for later that same year, in October 1999 he was recruited to turn around the struggling large British bank Barclays Bank PLC. They were a historic British institution founded over 300 years earlier in desperate need of new solid leadership having just suffered two successive failed attempts to find a new CEO. And turnaround them Matt Barrett did with noteworthy success, which enabled him to move up even higher in Barclays when he became Chairman in 2004 before finally retiring in 2006 to become a corporate director of Goldman Sachs Bank USA, Harry Winston Diamond Corp. and member of the NBK Group (National Bank of Kuwait) advisory board.

Matt Barrett’s Record as a Bank CEO

When Matt Barrett became CEO of the Bank of Montreal in 1989, he took over a profitable but second-rate major Canadian Bank with a very demoralized, beaten-down staff. He revitalized the institution and went on to oversee nine years of record profits which increased the Bank of Montreal’s market value of four fold in the ten years he ran things there. Additionally, he is credited with instigating the creation of the first virtual bank in North America, mbanx, the 1987 acquisition of Nesbitt Burns, a leading Canadian investment bank and he played a major role in orchestrating the 1984 takeover of Harris Bank, a Chicago retail bank, which he helped turn into a successful regional bank. As a result of this very successful diversification strategy, more than half of BMO’s earnings came from outside Canada by the time he left the Bank in 1999.

Next in 1999, Matt Barrett went on to become chief executive of Barclays Bank during a crisis of confidence in their leadership. He was able to quickly restore the financial market’s faith in the Bank by cutting their cost structure through a large staff reduction and closing many unprofitable branches despite the huge outcry and criticism these efficiency increasing actions caused. By the end of his rein there, Barclays’ shares were up more than 27% and the famous Bank stood on solid ground once again having regained its solid reputation. And importantly, the strength that Matt Barrett built into Barclays during his time there certainly helped that Bank weather in reasonable condition the 2007 – 2009 sub-prime mortgage market crisis. This severe global financial services industry meltdown that almost triggered a new depression and which we are only now starting to recover from caused the fall of many of the world’s big name institutions like the Royal Bank of Scotland, Lehman Bros, Merrill Lynch, Fannie Mae, Freddie Mac, AIG and a score of notable others.

Comparing Financial Services CEOs

In the thirteen years that I worked in financial services for two firms, Bank of Montreal and Household Finance, there were three CEOs I experienced:

Bill Mulholland, CEO Bank of Montreal (1979 – 1989)
Don Clark, CEO Household International (1982 – 1994); and
Matt Barrett, CEO Bank of Montreal (1989 -1999).

My recollection of Mulholland during his rein at BMO was that he ruled like Napoleon – imperially, brutally, and bloody. Also, like Napoleon, he too was an agent of big change whose run at the top ultimately was too long and ended unsuccessfully. Maybe it all stemmed from overcompensation because he was likewise short in stature. It was said that: (a) he regularly stranded top level subordinates in foreign airports by arbitrarily taking off in the Bank’s corporate jet whenever it suited him regardless whether it was well before the group’s agreed upon departure time; (b) that he regularly insulted and demeaned Bank executives in front of their peers (he apparently severely insulted his VP of Cash Management Services in a group meeting one time when he said that the fellow was so incompetent that couldn’t sell a pair of mittens to an Eskimo even if they were in the middle of a freezing winter); (c) he regularly reorganized the Bank just to make sure no one got comfortable with any potential status quo; and (d) he subverted the Bank’s loan approval process by personally making a big loan to Mexico which subsequently had to be substantially written off when they were hit by a big currency crisis and basically defaulted on the debt. As a result, despite how well received Mulholland was initially, the troops serving under him were really glad to see him go.

Don Clark enjoyed boom times and a long record run of consistently bigger profits when he was President and CEO of Household International. But it must have gone to his head, for when he became Chairman and CEO, he became determined in the worst way that his long profit record legacy would continue no matter what was happening in the economy. As a result, he tirelessly rode the company and his potential successor to grow exorbitantly (and recklessly it seemed to me at the time) to the point that both met early and untimely deaths (President Edwin Hoffman died of a heart attack in April 1993 just one month before he was due to take over as CEO and Household died its death in 2004 when it was taken over by HSBC Bank after more than ten years of really poor performance).

As mentioned above, Matt Barrett’s record as CEO definitely outshone both that of BMO’s Mulholland and Household’s Clark. Importantly, staff, shareholders, and directors all wanted Barrett to stay on longer. So, I guess he definitely earned his exceptionally big pay packages.

My Favourite Matt Barrett Story

My sharpest personal recollection of Matt Barrett comes from 1987 when I was a Senior Corporate Banking Account Manager attending a Christmas executive dinning room luncheon for large corporate customers held on the 68 floor of First Canadian Place, the Bank of Montreal’s Toronto head office. In his wrap up speech to our big clients and the many BMO staffers there following the Chief Economis’s upbeat economic forecast talk, Matt wowed the crowd with an amusing story about when he was out to dinner with the Bank’s unabashedly gruff and quick-to-bite Chairman, Bill Mulholland, wining and dining an important customer.

Apparently, when it came time to pay the bill, Barrett reported how Chairman Mulholland put down his MasterCard only to have the waiter come back and in the easy hearing range of his guests rather publicly let him know how the Bank he led had just refused to accept the dinner charge. It seemed, in the aside that Matt Barrett told us, Mulholland’s account was over its approved credit limit due entirely to his having been slow to get his expense claims submitted for reimbursement. Unsurprisingly, this caused Mulholland’s MarsterCard to end up with an excessively high balance. Now, as Barrett was President at the time and the man the Chairman undoubtedly would hold responsible for his embarrassment in front of a client, Matt could only sit there and smile as he prepared himself to weather yet another of Mulholland’s legendary storms of wrath. But trust Barrett to find a way to smoothly brush the incident aside with the following casual comment to the table at large: “now doesn’t that just go to show you how well run our Bank is – not even our esteemed Chairman can borrow our depositors’ money excessively!”

My Shout-Out to Matt

Hey there Lad, where you’ve gone? It’s been too long you’ve been away. We’re here needing your help again to drive more international business success for this fair country of ours. Will you no go find yourself another Canadian company to help? There’s lots of good folk out there who’d love you to be gracing them with your ‘lucky touch’ once more.

- Barrett Resigns [from Bank of Montreal - Jan 13, 1999]

- Matthew Barrett biographical profile @ Answers.com

- Telegraph Newspaper UK article: Leader of the Barclays Gang

- Horatio Alger Hero – a Powerful Myth

- Is it Magic or Mindset? [about business leadership]

© Blog.TonyJohnston.biz & Compass North Inc. 2009

Article by –

Tony Johnston, CMC, CGA, MBA, BA (Econ)
President
Compass North Inc.
18 Balding Court
Toronto ON
M2P 1Y7
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Tony Johnston is a business results specialist, top level executive and management advisor. Having successfully led 4 turnarounds and with many significant operations, deal making and finance oriented accomplishments to his credit, Tony helps companies drive:

› top line growth (revenue)
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› information gathering (competitive intel / market research)
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› enterprise leadership (CEO / CRO / CFO)

Compass North Inc. is a management & advisory services firm that helps companies achieve important, challenging operational, financial and transaction oriented goals. Examples of what we do include helping companies and their owners:

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Comments

2 Responses to “Matt Barrett & the CEO Mindset”

BizSugar.com
January 4th, 2010 @ 9:47 am

Matt Barrett & the CEO Mindset | Biz Money Matters |…

If you’re interested in how to develop a winning CEO mindset, I recommend you copy key pages from the Matt Barrett management play book if you can. You could learn a lot from how he achieved success at Bank of Montreal in Canada and Barclays Bank in L…
Tony Johnston
January 5th, 2010 @ 4:06 pm

The following is 1 comment that was posted on the Xerox Alumni Group Discussion page:

Very interesting article. Never had heard of Matt Bartlett. Worth my time. Thank you.

Suzanne Sheppard CEO at Executive Conversation, Inc. (http://www.conversation.com/) – Posted Jan 5, 2010

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