"Bullish on Canada
- and Wabash"
Gary Reamey '77
"Changing Course,
Full Speed Ahead"
Allan "Andy Anderson" '65
Magazine
Winter 1998
No dealing in the dark (John Bachmann p.4)
Bachmann's success has grabbed the attention and respect of his competitors. In 1987, the Securities Industry Association appointed him chairman-an unusual choice, as past chairmen had usually come from the larger, Wall Street-based companies. Some analysts saw the selection of the managing principal from a smaller, midwestern firm as an effort to rehabilitate the image of an industry tarnished by recent insider trading scandals. Near the end of Bachmann's first term, though, a new crisis overshadowed those concerns. The stock market crash in October 1987 shook investor confidence, spawned rounds of second-guessing by brokerage firms, and helped put the two largest factions within the industry-investment bankers such as Morgan Stanley, and large, diversified retail firms such as Merrill Lynch-at loggerheads over issues that threatened to tear the industry apart.
"I was named chairman, in part, I think, because I didn't represent either of those two camps," Bachmann explains. "My policy was that we didn't do anything in the dark. Both sides at times would try to persuade me to follow their point of view. I'd say, 'Look, we're going to all get into a room together and talk about this.' Even if neither side was happy with me, they could trust me."
They tested him, too. At one point during his tenure, three of the largest firms in the country threatened to leave the association when things didn't go their way. He told each of the firms: "It would be a terrible loss to the industry if your organization was to resign, but you have to do what you believe is in your own enlightened best interest. I think it would be a mistake, but if you have to resign, resign."
They didn't. And when the association needed his steady hand for an unprecedented second term, Bachmann became the only two term chairman in the group's history.
"He was a terrific leader, both ethically and in terms of his skills," SIA vice-president for management services H. Pim Goodbody says of Bachmann's tenure. "When he takes on a commitment, he jumps in with both feet and gets the job done."
Bachmann took on another commitment when former Securities and Exchange Commission Chairman Richard Breeden called on him to resuscitate collapsed negotiations essential to preventing another stock market crash. The issue was the shortening of the settlement cycle-the period of risk between when a stock transaction takes place and when it has to be paid for.
The urgency of the issue helped Bachmann bring seven of "the best, most knowledgeable people" to bear on the problem. He insisted that the group meet once every two weeks until the project was complete, and the Bachmann Task Force was able to finish its work in six months. When politics slowed the passage of the regulation, Bachmann lobbied new SEC Chairman Arthur Levitt. "I called him and said 'we have a window of opportunity here,'" the task force chair recalls. "I was halfway through my presentation when he said 'John, I was the president of the American Stock Exchange [during the 1987 crash], I was living that, and this will be at the top of my agenda.'"
The regulation cleared Congress, the settlement time was reduced to three days, and T+3, as the bill is called in industry circles, has inspired stock markets around the world to follow the U.S. example to lower risk.
A little better than you found it
It's been said that "managers do things right, leaders do the right thing."
The subject of study in classrooms at the Drucker School in California and the Harvard Business School, Bachmann's skills have established his reputation as one of the country's finest corporate managers.
Ask him to state his most important accomplishment, and he answers along these lines: "I think I have played a central role in creating a mechanism that has positively touched the lives of many people. We have a philosophy that, I believe, best serves our customers in the long term, and we've created a system that has created opportunity for the men and women who work here."
Yet Bachmann's vision extends beyond managerial constraints. Bachmann will tell you he's proud of his brokers' service to their communities, but he leads by example.
"This is a man who has enormous energy and capacity to take on big projects and to do them with thoroughness and fairness," Carnegie Hall's Coppock says. Those projects are many and varied. The company's foundation assists in disaster relief and meets local needs in many of the towns, cities, and suburbs in which it has offices. And for St. Louis, in addition to guiding museum and symphony boards, Bachmann is leading a time-intensive effort to create a modern airport for the city while continuing to serve on the Arts & Education Council, which develops and supports art programs for children.
"John believes passionately in the arts," Coppock explains. "Not just in and of themselves, but for what they can do in terms of binding a community together and helping young people to find a path for themselves."
"History is not denominated in dollars," Bachmann once told graduating seniors at a McKendree College commencement. "History is a record of social impact," and then, adapting a maxim he first heard at summer camp, he added, "Try to leave the world a little better than you found it."
Bachmann hesitates to ascribe these values to a particular theology.
"I think you get these as gifts from the places and people who touch you," he reflects. "I can't say enough about the home I grew up in, the experiences I had growing up in a small town, and I can't say enough about my experience at Wabash. It exposed me to the arts, which are dear to me. It taught me nothing of vocation, but everything about learning how to think-how to build on whatever was there.
"The irony is, if you look at my college record, you'd be embarrassed."
Yet as a Wabash College Trustee, Bachmann acknowledges that a liberal arts education is about a lifetime of learning. Look at that record, and you'll find few Wabash men who have used their education for the benefit of so many.