Sense of Urgency When all is Good

Welcome back everyone!  We hope each of you had the chance to unplug a little this summer from our usual frenetic daily pace at Jefferies.  We know the two of us did this and while it was a very productive summer, the stars aligned in a manner that allowed us to really enjoy our families and friends.  For that we are grateful.  To welcome everyone to September, we want to remind each of you of a very simple concept that will be the difference maker as we begin our final quarter of our 2018 fiscal year:  SENSE OF URGENCY.

Usually, this thought is reinforced when markets are in disarray, deals are impossible to consummate, clients and traders alike are losing money, liquidity is tight, balance sheets need to, but can’t shrink, and costs are no longer proportional to a reduced revenue opportunity.  None of these issues are prevalent today (don’t worry, there is 100% certainty they will all rear their ugly heads again).  So why are we raising SENSE OF URGENCY today when all appears relatively calm and normal?  The simple answer is that it is far easier to accomplish every one of our important objectives when things are peaceful, so this is the perfect time to focus our collective energy on what we need to accomplish to both maximize our current opportunity and put ourselves in the best position possible before the inevitable next downturn occurs.  It is said that a crisis is a terrible thing to waste because that is when you can quickly affect tremendous change.  It is equally terrible to be complacent in good times and we ask all of you as our partners to make sure not even one person at Jefferies gets lulled into a false sense of security.  Here is a partial list of things every one of us can do with an appropriate sense of urgency as we sprint to our collective finish line for 2018 and look forward to a long future building Jefferies together:

1. It’s the little things.  Return every single email and call real-time or as close to real-time as humanly possible.  You are either fully connected to your co-workers and clients or you are not.  It doesn’t matter if the person is senior to you or junior to you—good ideas don’t know the title of the person who thought them up.  Even when you find yourself not wanting to respond because it is too complicated or the answer that you need to give will not make the person happy, please pick up the phone immediately and just deal with it.  Situations rarely uncomplicate themselves and a quick “no” is always better than a slow “no.”  Get to the heart of the issue, discuss it if needed with everyone relevant, make the decision, communicate it, and move on to the next.
2. Markets don’t stay like this forever.  Our banking pipeline is as big as it has ever been, and that is a great thing.  That said, there is no limit to the amount of quality business we can transact at any point in time—at least we are sure we haven’t maxed out yet!  A big backlog doesn’t mean we can slow down our idea generation or presentations to clients.  We will never know how much we can actually accomplish unless we push ourselves into the highest gear possible.  This doesn’t mean we get sloppy, over commit, or ever let down our clients.  It just means that we now have an incredibly experienced team supporting every one of our most senior people and they are all ready for more responsibility and are eager to help carry the load.  Delegate, encourage, teach and stay connected.  We can all do twice the business we are currently doing by leveraging the resources that surround us.  Let’s please try.  By the way, pushing to transact now is great advice for our clients who have watched the markets perform extremely well and may themselves get lulled into a false sense of security.  We should encourage all of them to pursue their strategy with determination and urgency because valuations do drop, markets do shut down and operating cycles do change.
3. Focus on costs when it feels like you don’t need to.  It is so easy to take our collective eyes off the importance of watching every dollar when it feels like you can generate revenues by just trying.  Incremental costs stay with us, long after revenue opportunities slow down.  Owners watch costs in up markets as much as they do when times are tough.  This needs to be high on every one of our lists.  A dollar of revenue is generally one time.  A dollar of cost savings is annual.  Let’s all pay attention, generate ideas, push back aggressively on expense creep and protect our firm for the rainy days that are sure to come.
4. Protect our home now more than ever.  Today our balance sheet is clean, our illiquid assets are minimal, our liquidity is at or near record levels, our inventory is exactly where we want it, and our commitments are sized appropriately and diversified.  It is good times like these that we must have the urgent mentality of not getting sloppy, reaching for marginal revenues relative to risk, allowing style creep, or all the other hallmarks that follow a long period of healthy markets.  We must remember how quickly it can and will change.  We have all worked very hard to be incredibly well positioned for the next down cycle.  Let’s keep playing smart offense and doing quality business, but all eyes should be open and let’s have a strong sense of urgency in evaluating risk and overcommunicating all we see and do.
5. Make our clients money.  A rising tide does not always lift every boat and the rest of the year will be critical to most of our clients as they strive to outperform their benchmarks, which is always tough.  We have an enormous amount of resources throughout our organization and it is up to us to harness all of them and customize them to best suit each of our investing clients.  Best ideas, best execution and a driven sense of urgency and focus from us to them will be rewarded.  It always is.
6. Culture Urgency.  Zero arrogance.  Never resting on our accomplishments.  Fairness.  Saying thank you and sharing the glory with all of your internal partners responsible for each success.  This is the Jefferies way.  Aggressively recruiting the best and the brightest, while working together to retain, train and promote all who are with us are both important priorities that require a strong sense of urgency.  Working together to improve our diversity in every aspect is as important as generating revenue or cutting costs.  Actually, we take that back—it is more important because it will help us be the best firm possible, which in turn will make everything else we do better.

If you cannot tell, we are both extremely excited and happy to join each of you in our race to the end of 2018.   There is so much to do and we believe in our team and our firm.  Our clients believe in us.  Let’s get to work immediately with the right SENSE OF URGENCY.

Urgently and Enthusiastically,

Rich and Brian