From the C Suite with Raymond James’ CEO Paul Reilly: Listen and learn. But in a crunch, be decisive

Paul Reilly’s management approach is as deep-rooted as they come.
The chief executive of Raymond James Financial is the third of eight children — and cultivated his listening and peacemaking skilIs growing up.
The talents have come in just as handy over the past two decades as he has helped giant companies through times of crisis.

Today, at 61, he still values listening, though he’s learned to be a more deliberate leader.

Mr. Reilly knows his name will never adorn the brokerage that he took over five years ago from Tom James. But he’s confident in his own mission to better the firm, which already boasts more than 6,300 financial advisers and $496 billion in client assets.

Mr. Reilly still wakes at night, though, wondering if he’s doing enough.

InvestmentNews: Tell us about your leadership style.
Mr. Reilly: It’s pretty much a team, collaborative style. I’m a listener. I’ve come into three firms now with diverse cultures and I don’t assume there’s one way of doing things. Team decisions are usually better. The only two times I really veto are on strategy — we don’t vary from it just because we feel like it — and anything against our core values.

InvestmentNews: Is listening a skill that you’ve had to develop?
Mr. Reilly: I’m one of eight kids, that’s an environment where you’re used to listening and you’re used to teamwork.

InvestmentNews: Do you think leadership is something that can be learned or is it an innate skill?
Mr. Reilly: I think it’s absolutely teachable, though people have innate qualities that make them better. You can teach someone basketball or tennis but certainly the better athletes are going to do better at it. I have been taught leadership. There may have been some innate qualities that made me good at certain areas. You can teach how to listen, how to motivate, how to think, but certainly for those who do that innately, it’s going to be easier.

InvestmentNews: What is the role of a leader in an organization?
Mr. Reilly: It depends on the times. In times of stress, a period like 2009, or in crisis or in war, people want to be led. They want that comfort and solid feeling that they’re going to be OK, and you’re going to do things. You take a little more command and control in those times.
In most times, leadership is getting other people to lead. It’s taking the roadblocks out of the way, enabling them to do what they should do. If I have 10 people reporting to me and I’m leading and making all the decisions, I can do a certain amount. But if I have 10 people making those decisions and executing, I’ve just multiplied my ability by 10 to have an impact on the organization.

InvestmentNews: How do you encourage employees to deal with conflict?
Mr. Reilly: You put it on the table. People sometimes think you can read their minds and you should automatically know what they’re thinking. So you say that anything is OK to discuss and that it’s OK to disagree. It’s OK for two business heads to disagree, and then I’m the tiebreaker. What’s not fine is not to bring it up. Debate is good because it comes out to a better answer.

InvestmentNews: Where do you fall short as a leader?
Mr. Reilly: You can never over communicate in a professional services firm. And there’s only so much time in a day. In my career I’ve entered companies in tremendous downturns. I joined KPMG on Black Monday in 1987. I came to Korn/Ferry [International] in June 2001. Half their business was Internet-based recruiting, and you know what was happening then. I came to Raymond James in March 2009.
I think one of my real strengths is patience. Every one of these companies I’ve come into, people have expected me to make dramatic change, and I haven’t. I watch and I assimilate and then I make an action. I think I make much-better-informed decisions.
But you can sometimes get too patient. If I have ever faulted myself it’s because I wanted smoother transitions. Maybe I didn’t make the people changes as quickly as I should have, and when I made those changes, I looked back and said that I wish I had done those a year earlier.

InvestmentNews: What kind of culture are you trying to foster at Raymond James?
Mr. Reilly: I came into 40-plus years of culture that was great, that fit completely into my values. I think Tom asked me to succeed him not because of my financial services experience but because of the values. The culture here is simple. It’s trust, integrity and long-term conservative growth. We look long term, not short term, and the center of that is that clients come first. We do whatever is right for the client first, and we count the advisers as clients. There are tons of things that I could do to make more money, and our competitors do tons of them. But we don’t do them because it doesn’t fit us. It doesn’t mean it’s right or wrong.

InvestmentNews: Tell us about someone in your life who really influenced the man you are today.
Mr. Reilly: There have been a series, starting with my dad and his values. He was a doctor, and what was right was always right. My first boss was great with people, he was a great marketer and a great explainer. Dick Jacobs, a lawyer, really taught me how to look under and beyond what you’re being told.
When I joined Korn/Ferry, I knew it was in financial trouble, but I didn’t realize it was on the edge of bankruptcy. After being there a few months I wondered if I could save the firm. I remember a call to the founder and I said, “Richard, I’m not sure I can save it.” He let me talk and then he said, “Well listen, son, people have given their lives to make this a great firm for 40 years; it deserves a leader. If you don’t think you can lead, get out of the way. By the way, I think you’re the right guy.” He told me to think about it and call him in the morning.
I didn’t sleep much that night, but I woke up a different person. He was right. There was a great brand, despite its financial difficulties. Leading in a crisis is about being in front, and I woke up on fire. I raised private equity, I paid off our defaulted debt. Years later we had no debt, had bought out the private equity, had a couple million dollars of cash in the bank and we were No. 1. Nothing had changed — we were the same firm, the same great people. It was me. Sometimes in crisis you really learn how to lead.

InvestmentNews: Do you feel like you’ve had that kind of an impact on people at the firms you’ve led?
Mr. Reilly: I hope so. I think one of the hardest things for leaders to know is whether you are achieving enough. At KPMG, someone once asked me if I felt I was making a difference. I still wake up with that haunting question today. Am I really keeping this unbelievable asset of a firm with great values and great culture and making a difference, making it better? That’s what you have to ask yourself as a leader, even in good markets.

InvestmentNews: Since markets have been doing well, what can you point to that you have put in place to make a difference?
Mr. Reilly: I would say my first accomplishment has been that my ego didn’t tell me that I had to change things that were great, like our culture. Too many people want to leave their own mark. My name is never going to be on the building; they are forever going to talk about Bob and Tom James. My role is to make it a better firm. We also have changed the technology benchmark for Wall Street firms and for custodial firms. And we have great succession planning now. Before, Tom was such a great leader and so capable that we didn’t have the next generation in place.

InvestmentNews: What qualities do you look for in potential hires?
Mr. Reilly: No. 1 is leadership — our kind of leadership; it’s team leadership. I also worry about the cultural fit. You can use culture as an excuse not to make change. But change is part of business and you want people who make change within the values, not use values as an excuse not to change. So I look for people who understand the values, are open to change and can drive change within our value system. The rest of it is easy if that’s there.

InvestmentNews: How do you approach time management?
Mr. Reilly: Poorly. It’s so hard in service firms because everyone wants to talk to you. It’s just the nature of our business. If FAs call or FAs email, they get a response. So you have to set priorities. I block out what’s important, which includes what’s important to my kids, and I treat them like meetings.
I probably could be better on exercise and things like that. You have so much demand on time, I always try to squeeze more in. You have to ask yourself every day, what are the important things to the firm? What are the real priorities you need to drive? There are hundreds of things you can do, but what are the five or six that you can consistently do that have impact.

InvestmentNews: How are you a different leader today than you were 15 or 20 years ago?
Mr. Reilly: I’m probably more deliberate than I was as a young leader. Even though I’m open to listening, I’m much more willing to say, OK, this is enough information, and make the decisions. I’m much more willing — and I think experience in crises has taught me this — to really look at things and be firm and move. And if you make mistakes, admit you make mistakes; we’re all human. In retrospect, if you learn something, that’s great. You try not to make mistakes on things that are critical, but if you make no decisions, that’s the biggest mistake of all.

Related Topics: Raymond James & Associates Inc.