Absolute Return Podcast #44: Leadership Chat: Jim Beqaj, the CEO Coach

Transcript

Welcome investors to the Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies. Your hosts Julian Klymochko and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by accelerate financial technologies. Accelerate because performance matters. Find out more at www.Accelerateshares.Com .

Julian Klymochko: Welcome investors to the Absolute Return Podcast, I am your host Julian Klymochko.

Michael Kesslering: And I am Michael Kesslering.

Julian Klymochko: We have a special guest on today’s podcast as part of our leadership chat series. He is Jim Beqaj of Beqaj International, an executive coaching and recruitment firm. Now Jim has had a storied career on Bay Street over more than 40 years, spanning everything from being president of Wood Gundy when it was sold to CIBC, vice chairman of BMO Capital Markets, to now being an executive coach with clients from some of the largest companies in the country.

In our discussion with Jim. We touched on a number of fascinating topics.

• • Including how Jim was promoted to president of one of the largest brokerage firms in the country at only 37 years old.
  • How he was fired by two Bay Street firms and why he considered himself unemployable.
  • Transitioning from earning five million bucks per year, working in the capital markets to becoming an entrepreneur in executive coaching.
  • Lastly, a really interesting story about how he almost bought Lehman Brothers in the 1990s.

A bit of disclosure. Jim serves on the advisory board of Accelerate in addition to being an equity holder at the company. With no further delay, here is our discussion with Jim Beqaj, the CEO Coach.

Julian Klymochko: Jim, how are you?

Jim Beqaj: I am fantastic. Thank you, Julian. Great to be here with you today.

Julian Klymochko: Yeah. Thank you for being on the podcast. We are really excited and excited to hear you chat about your vast experience in the capital markets and for our listeners who are unaware. Jim Beqaj, Bay Street veteran, has been working in the capital markets for many, many decades in very senior positions. Now he has transitioned into something more entrepreneurial. Coach of CEOs along with an executive recruiter. So we are really pleased to have him on the show today and to start things off, Jim, why don’t you talk about your career progression and how you ended up where you are today?

Jim Beqaj: Sure, career progression, you know, it is always interesting when you look in the rear-view mirror and you start to think to yourself, how did I end up doing what I am doing now. Unless you went to MBA school, which I did not go to. I never had experience, aspiration to be CEO. But so what might be helpful is sort of taking it back to a point in time where it kind of all started, you know, I love Ted Baxter and a thirty thousand watt radio station in Waco Texas.

But I was at university studying accounting, and I thought accounting was what I wanted to do, what everybody was doing, and seemed to be a good road to not nowhere, but possibly get a CA or something like that. I grow up in an immigrant family; I was the first to graduate from high school, first to go to university. It was not exactly like there was a lot of parental advice about choosing careers and stuff like that, and I was faced with the first glaring reality in my life is that I’d been in fourth year turned down by every accounting firm in the country. I was fortunate that a gentleman from Pricewaterhouse took me for a drink and said to me, I’m going to do you a favour, and the accounting world a favour and tell you never to go into accounting. He said, because there is nothing about you that fit the accounting world. There is nothing about the accounting world that fit you.

In retrospect, it was very poetic what he was saying. I did not even know what the word fit meant at the time. I was thinking I needed a job sort of post that, everybody is getting job offers. I was lamenting my life in the public and someone said why don’t you think about Wood Gundy? And I was like, Wood Gundy, what is Wood Gundy? They said it’s an investment bank and like, I didn’t know what an investment bank was. This is late 70s, my family didn’t have stocks or bonds or anything like that. In fact, I thought Dominion Securities was like a Pinkerton company as opposed to D.S. which shows you how naive I was.

And so I turned out I had a bunch of people that I knew that had gone there. I kind of went there on a wing and a prayer started out in the retail sales training program. I quickly realized I don’t want to do that. I don’t want people screaming because their stocks gone up five or ten cents. And I sort of bounced my way into the money market and kind of bounced my way for the next I’d say probably ten to fifteen years, just kind of following. Someone would say, you want to do this? And I say, sure. Want to do this? And I said sure. And capital markets world changed dramatically in the eighties when Paul Volcker came in and that whole size of business went from being a sleepy. In fact, I started with Wood Gundy, we had one Reuters machine on the desk of the entire bond money market, fixed income and equity division. And it was turned off most of the time. So that was sort of the world that we kind of started in.

And as the capital market side grew, I took on more and more responsibilities. And, you know, having sort of grown up in the restaurant family business, I looked at most businesses like an entrepreneur and kept asking myself the question got to be a better way to do this or why don’t we do it this way regardless of what anybody else had done? And so I kind of follow that nose for I would say for most of my career until I had a sort of Joe Clark moment when everybody that was supposed to become president of Wood Gundy, were running businesses that lost tons and tons of money. And lo and behold, a little old immigrant boy, Jimmy Beqaj comes up the middle with a department that’s made two-hundred million dollars just at the time when they’re about to announce all the changes. And in those days, it wasn’t about politics, it was all about money.

Julian Klymochko: And you were running the bond desk, right?

Jim Beqaj: I was running the bond desk and they tapped me on the shoulder on my thirty seventh birthday, and CIBC had bought us, and said, we’d like you to be president and chief operating officer. And that was sort of the first real opportunity I had to take hold of a big organization. I had done it in smaller things and turned it around, started the mortgage backed securities market, started the securitization market but I never really had my hands on the wheel of a big ship to really turn around, do something different and that was the beginning. And I recognized that we were becoming less valuable to our clients and that we’re becoming less relevant. And after interviewing most of our clients globally, realized that we were one of the fortunate few that we had a client base but we didn’t have the products they were buying. Whereas most people were building products without clients in the United States. So I put forward the plan to build it globally.

And I went to New York. I had a million dollars to do it and hired over 400 people in 18 months and came back and tried to buy Lehman Brothers when it first got spun out by American Express and tried to buy some US banks as well. But you can imagine at the time all the Canadian banks looked the same. I remember two days before I got fired, I was on the board presentation and one of the board members said to me, you know, you realize that we do what you’re suggesting, we won’t look like any of the other Canadian banks. And so, you know, being the cheeky bugger that I was I kind of tap my nose the way your kids do, right? And I went, bing, bing, bing, bing, bing, exactly. And he turned to one of the other board members and said, I don’t think he understood the question. And the board members said to him, no he understood the question perfectly so I don’t think you understood the answer. And 48 hours later, I was fired and they said they couldn’t live up to my expectations or aspirations.

Michael Kesslering: Jim, can you go into what you mean about not looking like some of the other Canadian banks?

Jim Beqaj: My view was what RBC is today, is what I was building out in nineteen ninety two to ninety six. There was going to be one global Canadian banking capital markets and all the others had an even integrated dealer in the bank. They were well behind us. I mean we had an integrated trading room. We had taken out the minorities from all the dealers. We had made the decisions on who’s running the businesses. I was running the trading rooms. Richard Ben, the dealer people were running the place. So we had a global platform. We had a big U.S. office, big London Eurobond operation. We’ve been in Japan for forty years. We had an office in China. So everybody else was pretty well domestic. And so I saw it as an opportunity to really leverage that platform. And when I looked at our balance sheet as an organization.

I mean, we weren’t going to compete with Goldman, Merrill, you know, Credit Suisse or the big players. But in that group, between five and ten, we had more resources, we had better balance sheet, we had better funding, we had a better client base the only thing we’re missing was the people to build the products to do it. And so once I realized, you know, like in the United States, everybody CIBC lent to was below investment grade. Perfect candidates for your [Inaudible 8:36], perfect candidates for high yield.

Julian Klymochko: Right, that definitely make sense.

Jim Beqaj: So that’s what kind of drove it but I mean, you know, you do something that big and it puts a lot of stress on an organization. And I was naive. I was still in the, you know, if you’re doing the right things the right way. Right. People do stuff like that. Don’t worry about the politics it will all solve itself, right? Well it didn’t.

Julian Klymochko: So basically you had too much ambition for the board of directors.

Jim Beqaj: I had too much ambition for the bank, for the people in the bank, because the old guard was starting to get concerned. Holy shit, Jim is bringing all these people in and they’re not like from Western and Queens and Calgary Dinos and, you know, UBC and Waterloo. They’re from Stanford, Harvard, University in Madrid, you know, London School of Economics. And the whole fabric and complexion of the organization was changing. And most of these people weren’t going to make it.

Julian Klymochko: Right.

Jim Beqaj: They weren’t going to make it. After we hired all these people, we were launching credit derivatives in nineteen ninety six building a credit derivatives were. You know it’s like a similar Julian to what you’re trying to do, right?

Julian Klymochko: Right. Interesting. And so you go from basically a career, one of your many career highs becoming very young president of Wood Gundy, which is the modern day CIBC World Markets, one of Canada’s largest investment banks and a player on a global stage. With that in mind and then you go from that to getting fired, what would you consider your biggest failure in your career and what did you learn from it?

Jim Beqaj: So I think my biggest failure was not recognizing when I lost my air support, when not recognizing that the gap between me and the rest of the organization was too large and that the end doesn’t justify the means. Like, I thought that’s why I was there, right, to shake it up, to be different and everything else but the reality is, the higher you get up in an organization, actually the less leverage you actually have autonomous levers. And you have to work more collaboratively and recognize that you’re not working at the fastest pace, you’re working at the pace to get the most amount of people to provide support. Because if they don’t provide support, then they start to create background noise and it creates uncomfortable setting for the people in charge. And in particular case to CIBC as was obvious because they drove the ship right into the ground occurring again fourth act of the same movie. If the person at the top who’s Job wasn’t secure, you know, when ten guys are coming in and saying, you know, Jim’s got to go, Jim’s got to go. Jim is a problem. You’ve got to be some kind of superhuman person to go, no, you can have to go.

And so I think the most important thing I learned is unless you own it, unless you’re at the top you can be out ahead, which you got to be mindful and not getting too far out ahead, right? You got to stay within eyesight. You got to stay within comfort sight.

Julian Klymochko: Right. So you have to manage those politics in addition to pushing the business forward.

Jim Beqaj: It’s actually not politics Julian. I think that’s the wrong word. I think it’s recognizing the amount of stress that you’re putting those people under.

Julian Klymochko: Right.

Jim Beqaj: And providing them confidence and reassurance and time to catch up to where you are, right?

Julian Klymochko: That make sense.

Jim Beqaj: Because, you know, it is like Machiavellian, right? Don’t ever underestimate the, you know, the ingrained sort of benefits to people when you try to create change, right?

Julian Klymochko: Right.

Jim Beqaj: And I didn’t take the time to articulate why this was better for them, because in reality, for a long time, it wasn’t better.

Julian Klymochko: Right, that makes sense. And so you’ve gathered a ton of experience and wisdom over your four decade culture, especially with a lot of success early on. What is one piece of advice that you wish you had known back when you started your career? If you are giving this advice to your 25 year old self, what would you do then?

Jim Beqaj: I give it to all my kids. I give it all my coaching. If you don’t fit, there’s a reason you don’t. You need to get out and find the right fit. I think, you know, I write about this and I coach about this and I talk about this all the time. I think we are fundamentally raised the wrong way on this earth. I think we are raised to work on our weaknesses. I think we are raised to think that we have to change ourselves to fit into situations as opposed to only ourselves. Like my podcast called ‘Be You the World Will Adjust’. I think that’s really hard for people to do but if I look back to the people that I’ve admired over my career, the ones that had the guts to say, you know what, this is the right fit for me. I’m losing too much of myself to be here. There has to be a place where I fit better. That’s probably the single most important thing when I look back. And that’s probably the single most important thing that I coach people with. Is if you don’t fit, it’s not going to change because you can’t change yourself enough to fit.

Michael Kesslering:  So you mentioned some of your executive coaching. How did you decide that was the path that you wanted to start moving down?

Jim Beqaj: It’s what I’ve done all my life. In fact, I’m a behaviourist at heart which means that I believe that if you follow the right behaviour on a daily, weekly, monthly, quarterly, annually basis, I don’t know what the results will be, but they’ll be the right results. You might get those results in a random sort of order basis, but they’re not consistent. So after I got fired from the Bank of Montreal, I was waiting there expecting our six child. My fourth child had brain surgery and they disconnected the right hemisphere of his brain. I was unemployable.

Julian Klymochko: What do you mean by unemployable?

Jim Beqaj: I was unemployable. I’d been fired by two Canadian banks and nobody in Canada would hire me. I couldn’t get a job as a bond trader.

Jim Klymochko: And so you transitioned from CIBC to BMO

Jim Beqaj: Yeah, and I was like flying from an F-16 plane to a World War One biplane. Both of them sort of go up in the air, but they’re significantly different. And then ended up getting fired for the exact same reasons, kind of like guys who marry the same woman twice, got fired for the exact same reasons as I did BMO kind of can’t live up to expectations or aspirations. And I was like, well, I kind of told you that, but I realized that I did, but I didn’t really listen.

Julian Klymochko: So anyway, at BMO your role was vice chairman?

Jim Beqaj: Well, you know, that’s a classic because my role was vice chairman of Capital Markets. But then there was this long list of things that they said I was supposed to be doing, which was eventually to become president and do all kinds of different things. But it turned out those are just hocus pocus to get me in to run fixed income, which I’ve done for 15 years before. And I would have never taken the job if they’d actually told me what it was.

Julian Klymochko: Got it, not a true fit to you.

Jim Beqaj: Well, it wasn’t a true fit. It wasn’t a fit at all. And in fact, what I should’ve done is when the article came out, the newspaper saying that I was running a fixed income and no mention of all the other stuff, I should have walked upstairs and resigned immediately.

Julian Klymochko: Right.

Jim Beqaj: Twenty four hours after I arrived. But, you know, having been sort of cast aside after 19 years on CIBC I was pretty bruised up and looking for a platform for redemption. Right? And so anyway, so I’m out of work can’t get hired, actually I can get hired I’ve got a nice job offer from Bob Diamond at Barclays to come down and run their global DCM. But I determined because I have a blended family, kids from two of my marriages. I determined I was not going to be one of those dads’ lives in two cities and sees one set of kids all the time the other set of kid’s sort of once a month and for 10 days in the summer, I was going to raise a blended family. So I was unemployable. No one would hire me. I begged, I begged people for jobs.

I said, just give me a bar training job and let me train pay me hundred grand you know pay me a hundred and fifty grand coming from having made four and half, five million dollars and everybody just looked at me and said, no, no, no, no, no. So I had to figure out how I was going to pay for my family. And so one day I sat down on the edge of my dock at the cottage, which was up for sale and burning cash at a rapid rate. My son now hemiplegic is left side does not work because the brain surgery. We’ve got a brand new baby. And I said, I have to figure out what people should pay me for. What is it I can do to make the money? And so I asked myself the question, what were those best days you had? They were all centred around hiring people, they were centred around figure out why businesses don’t work and the third thing was I always kind of an knack for coaching and mentoring throughout my life, even growing up in the restaurant business. And I knew I didn’t want to be a head owner and I knew I didn’t want to be a consultant and couldn’t get enough money in being a life coach. What I really want to be is I want to be a trusted adviser and I want to utilize my 30 years at the time of experience and I wanted to be a trusted adviser. And I wanted to execute that trusting advice role in three capacities in either recruiting, in either consulting or either in coaching. But at the core, I wanted to be a trusted adviser. And so I hang out the shingle and it’s a different model no one else kind of had that model. There’s head-hunters as consultants. But my view was there’s lots of guys doing each of those things over on the left side of the page but there’s nobody with my background experience sort of pulling it all together into one. And so I hang up the shingle for a BEQAJ international. That was the beginning of it fifteen years ago.

Julian Klymochko: Interesting. And how was making that jump from being an executive at one of the largest companies in the country and making millions of dollars per year to transitioning to entrepreneurship where you’re a team of one and money is tight at first?

Jim Beqaj: Well, you know, it wasn’t easy. It would have been terrible, you know, I should sort of digress. During the years of ninety-six to when I got fired, then after BMO and then Jack didn’t get operated on until 2002, I was pretty well on a downward personal spiral. I was watching the people at CIBC make millions of dollars off what I had built and I was unemployable. And, you know, in my mind, I was probably on the way to being clinically depressed but as my doctor says to me, his definition of depression is, is if I gave you a million dollars, how would you feel? And I said I’d feel great. He said, you’re not depressed. You’re just miserable like the rest of us.

Julian Klymochko laughing

Jim Beqaj: I could barely get out of the house prior to Jack getting sick and I was in very, very bad state. And then when Jack got sick and recovered, it put everything in life in perspective. And I really didn’t have much choice, much time to think about things. I had to be on the phone every day I had to call, I had to chase every lead. I could turn down the businesses. That was a good business. And I had to educate people about this new role, like because, you know, lots of people go from financial services to head-hunting but that’s not what I was doing. So it took a long time. You know, I would say it five, six years before I was comfortable that I was earning a monthly, quarterly, annually amount of money. I had to sell some houses. We downsized four times. I had an ex-wife I was still paying for. I was paying for kids. It was tough, it was really tough, you know and meanwhile, you’re here watching these people like you’re watching these people at CIBC you know, literally raped the bank. Right?

Julian Klymochko: Right, right. So that must have been a tough transition and took many years to kind of get back on their feet. But now with your coaching practice, you’re coaching some of the largest companies in Canada, the CEOs, some very powerful businessmen and women. Where do you find your advice resonates the most for them? And what are some of the tactics that you use that enables your clients to achieve their full potential?

Jim Beqaj: You know, probably I use the same tactic I use it differently with different people, but at the core of my coaching practice is getting people to understand who they are, to understand what their strengths are and find ways to utilize, to unleash the power of their strengths. You know, they’ve probably spent a lifetime like everyone else. You know, in performance evaluation where they spend a nanosecond about the things that you’re good at. And then they spend forty five minutes telling you how you suck and all the other things. And getting people to understand it’s not about balance. You don’t have to be good at everything but the things you’re good at you got to really spend time on them, get them even better, you know? Julian you know this because you and I have had this conversation, right? About, you know, sort of when I’ve said to you one time, you know, like utilize me, right? I’m one of your advisers like I do recruiting for a living. You should get my opinion on people you’re going to hire and stuff like that and find your own way. You know, I think everybody thinks that they have to be able to do everything and it’s just a bad utilization of time. And I say to people, you know, you have so much capacity, you can use that capacity to enhance the things that you do well and do them even better and then jettison the other stuff. Half the time people say you know that is not possible but it is possible. It’s 100 percent possible. It’s just in your mind. But people are afraid to be themselves. And the reason they are is because they’re afraid that somebody’s going to say no. And my view, as I said to CEOs, I say to people, executive committee, or even say to kids, you know, coaching two kids this morning, I said to, you know, if you’re okay with no being an answer, you hold the power.

Julian Klymochko: Right. Yeah, that totally makes sense, but a lot easier said than done, so something that listeners need to keep in mind but it certainly does requires practice. Now, one thing that I wanted to touch on that you talked about earlier in this discussion that I think our listeners will find really intriguing is you mentioned trying to buy Lehman Brothers. Can you give some background on that and what happened there?

Jim Beqaj: Well. I hired about seventy five people out of Lehman Brothers. And in those days I mean, what made that whole thing work was, first of all, derivatives and high yield were in the tank in the early 90s. You guys, you’re probably too young to remember, but they were completely in the tank. And there was no garden leaves and there were no buy. Nobody had deferred compensation. So I literally had a briefcase with offering letters and I fly out to Calgary, I sit down with the two of you, say I’d like you to join us and we’d have breakfast or lunch and you’d say, okay, sure. Yeah. And I’d pull out a letter and I’d sign in Julian at the top and sign in the number. I said what you make last year? And he said a million dollars. I said I am going to paid one million one hundred fifty thousand. I’m going to pay you 15 percent premium for last year. And all I need is your W-2 to verify your income or your T4 and people would start on Monday. So, you know, the expediency of all this, the ability to grow something from nothing and immediately was phenomenal. And every Lehman person I hired was like spectacular. They just fit seamlessly with me and to most of the organization. And it was just awesome.

And so it was kind of like, you know, what’s the guy’s name? Victor Gaiam, you know, I love the company so much. You know, you love the Shaver’s so much I bought the company. You know? Nowadays it would be the hair club for Men, you know, I’m not just a customer I own the company type of thing. And I had that sort of moment of epiphany, you know, I’m at seventy five guys, we should buy this. And so they got spun out by American Express at the time public at a twenty one dollar book value, it was trading around fourteen and I hire J.P. Morgan, as my M&A advisors ran through the numbers, figured out how we can do it. We had a triple A balance sheet at the time. Could you imagine what CIBC would have been like if in 1995, 1996 had bought Lehman Brothers?

Julian Klymochko: History would have been rewritten.

Jim Beqaj: It would have been instead of CIBC, the bank that hits the rocks more than anybody else, it would have been, you know, we would have been way beyond what Royal Bank is doing.

Way beyond what Royal Bank is.

Julian Klymochko: It’s fascinating. It’s a great story. And one question before we wrap things up here is you’re out there in the public. I know you have a book, you’re coming out with a podcasts. Why don’t you talk about how some of our listeners can discover more about you?

Jim Beqaj: Well, podcasts coming out January. It is called ‘Be You the World Will Adjust’. I have two books. First one I wrote was ‘How to Hire the Perfect Employer’ and the second one more relevant, more recent is called ‘True Fit How to Find the Right Job by Being You’. And my website is www.beqajinternational.com and I’ll be launching a new website Jim Beqaj performance coaching in January alongside of the podcast. And lastly, I’m working on my third book. Hard to believe that I even wrote one book, but I’m working on my third book. And the third book is called, ‘Do You Know, The Good, The Bad and the Ugly about your Organization’. And it’s based upon my work with many organizations when I’m either doing recruiting or consulting, where I go into the depths of the organization. And I ask people what’s the good, the bad and the ugly about working here? And if we can remove one impediment from their lives to make them 50 percent more creative, what would it be? And the responses are absolutely mind-blowing. And it just reaffirms what I believe is that the truth of an organization is in the body of the people, not at the top.

Julian Klymochko: Interesting. That’s great to hear you’re always up to a ton of different things keeping super busy. So for listeners out there, check out some of Jim’s books. I’m a fan of definitely a True Fit. One of my favourites. Podcast coming out ‘Be You the World Will Adjust’,

And you’re obviously are available for coaching, executive recruitment opportunities as well.

Michael Kesslering: We can also provide some things in the show notes as well.

Julian Klymochko: For sure and that’s about it Jim. Thank you for coming on the podcast today and thank you for sharing all your wisdom, experience and stories.

Michael Kesserling: Thank you very much Jim.

Jim Beqaj: All right, guys. Thank you very much. And Julian, I’ll talk to you after as well.

Julian Klymochko: All right, thanks Jim. Have a good one.

Jim Beqaj: Thanks guys. Bye-bye.

Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.AccelerateShares.com . The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.