Wealth Adviser Jeffery Lay: Run Wall Street Like a Military Unit

May 8th, 2012

By Forrest Jones and Kathleen Walter
May 8, 2012

Executives at Wall Street firms and other companies, both large and small, should run their organizations like a military unit and encourage more accountability and fewer accolades, says Lt. Cmdr. Jeffery Lay, a private wealth adviser and former naval aviator.

A veteran of Lehman Brothers and former Navy TOPGUN pilot, Lay has seen firsthand the right way and the wrong way to run organizations.

“One of the greatest things about the United States military is that we have so much reverence for our institution, that we really were taught from Day One to be a fiduciary to others,” Lay tells Newsmax TV.

“The concept of service before self was really an important tenet in the United States military, and that’s exactly the type of behavior and conduct that I took to work on Wall Street. It really worked hand in hand,” adds Lay, author of “TOPGUN on Wall Street: Why the United States Military Should Run Corporate America.”

On Wall Street at Lehman Brothers unit Neuberger Berman, Lay took his military background and applied it to the financial services industry, marked by finding a clear objective, planning for it, doing it and then following up afterwards with accountability and feedback, a policy dubbed Plan-Brief-Execute-Debrief.

“We didn’t just run straight into execution. We literally would sit back and set an objective and we were always very direct in developing an objective that was clear, measurable and obtainable,” Lay says.

“Once we had that objective, then and only then could we actually plan. With a plan in hand we briefed that plan and then the execution became that much easier.”

The key to repeated success came in the debriefing process.

“We literally had an idea that we would stand up and take our grades and be accountable not only to the system but to one another, and the idea of mutual accountability and learning from your lessons and not repeating them is the core idea behind the model itself.”

So how are today’s MBAs doing in the eyes of a TOPGUN naval pilot?

“I think there is a need for old-fashioned discipline. The military just doesn’t anoint someone an admiral just because they come out of the top MBA programs in the United States. Certainly education is important, you have to have a really strong core. But you have to understand the process itself,” Lay says.

That process involves loyalty and paying your dues.

“One of the interesting ideas about the United States Navy is that if things weren’t going right, you couldn’t just go United States Navy Number Three. This was the institution in which you worked and your loyalty lied.”

That attitude, says Lay, is missing in corporate America.

Too many rising executives are focused on their own short-term and self-centered needs, jumping to ship from ship, which bodes poorly for Corporate America.

“We need individuals that actually come up through the corporate ranks and not just pass from one rank to the other, one corporation to the next. Too many times, CEOs today can actually make the jump from their company to another when things didn’t necessarily go well. There’s really something un-American and inherently wrong with that.”

“You want to be the person right out on the front line that says ‘I’m the person that will be accountable for this problem’ and then pass the credit to others. You don’t have to staff up and be out in front of all the accolades.”

When asked about the collapse at Lehman Brothers, Lay points not only to former boss Dick Fuld but to those around him as well as part of the problem.

“Dick Fuld was a man who came up through the ranks of Lehman, but the difference that happened at Lehman and what we could see at Neuberger Berman from afar, was this was an organization where the corporate board that developed was really at the hands of Dick Fuld. That’s not the way we need to be doing things,” Lay says.

“I think there’s a real need for corporate responsibility and it’s got to start in the boardroom. The people that work with the CEOs at this organization, they can’t be just ‘yes’ men, they can’t just be rubber-stamping every decision. And we need to hold boards accountable as well.”

Lastly, for those wishing to soar in the United States Navy Strike Fighter Tactics Instructor program (TOPGUN) as Tom Cruise did in the famous 1987 movie of the same name, Lay has this to say: “I don’t sing well and I don’t play volleyball. I’ve had a motorcycle before but I never raced an F-14 out on the runway. What I can tell you about being a TOPGUN pilot is that if you bring your A-game every single day and nobody hands it to you,” Lay says.

“Once you graduate from TOPGUN, all you get is more work. So that’s really the goal in life.”

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