Jeff Sprecher grew IntercontinentalExchange Inc. (ICE) by more than $700 million over the last five years. Yes, you read correctly — $700 million.
While it may surprise you, it doesn’t surprise him. When he founded the company in 2000, while there were many unknowns, the one thing for certain was that ICE would be a high-growth company.
By 2004, it hit $108 million, and last year, it became an $813 million company, operating regulated global futures exchanges and over-the-counter markets for agricultural, energy, equity index and currency contracts as well as credit derivatives. While it’s great that ICE has been so successful in such a short period of time, it’s not enough for Sprecher — or his shareholders.
“We have a luxury of being a growth company, and we have the luxury of having shareholders who have bought our stock because they want to own a growth company, so the expectation is that we are going to grow,” says the chairman and CEO.
With that kind of expectation, he does his best to get the right people in place to make that happen, handle conflict in a healthy way and then also take calculated risks to move ICE forward.
Get the right people
Sometimes you find the best people you need for growth in the oddest of places.
For example, when Sprecher was looking to hire a vice president of operations, he found his man at his condo.
Sprecher had noticed that the president of his condo association was a solid leader, that people listened to him and that he was a thoughtful person. So Sprecher hired him to fill the position, despite not having the technical experience. He has since taught him the skills needed to do the job.
“You can teach good people the discipline that’s required, but it’s very, very hard to teach people who have knowledge to have passion and to have good work habits,” Sprecher says.
Hiring for growth is tricky, but one attribute you want to look for is passion.
“Do people love what they do?” he says. “Do they work long hours because they enjoy it? Is their passion for work their passion for life? You often find people who their passion is something outside of the office, which is great, and that’s probably the case of most people, but when you come across somebody who, when you ask them about their hobbies and they tell you that they really enjoy their work or describe anecdotes where you can glean that, those are the things in people you tend to look for.”
Another thing Sprecher says to watch when hiring is your initial instincts when you meet potential candidates because he believes that first impressions really matter.
“Sometimes you override your first impressions, and normally when that happens, you’re wrong,” he says. “There is something that happens when two people meet in an interview that you’re gleaning these intangible perceptions. If you think about what it is you liked or disliked about a person, I tend to think those are the right attributes in hiring, and you should focus less on the specific line items in the resume.”
It’s also important that you hire the best person for a position, even if it’s not a popular decision. For example, when ICE bought the New York Board of Trade, the company was more than 100 years old, it had a very defined culture, and most of the managers were in their 50s and 60s. As part of the merger, the CEO was going to retire, so Sprecher had to replace him, and he did something radical — he replaced him with a 32-year-old, who wasn’t the most popular choice.
“We were very aware that we were putting a young person into a company that had an old history,” he says. “We wanted to infect the enthusiasm and business practices that he had as somebody who was younger.”
When you do get these great people, then it’s important to work with them to keep them in the organization. For example, Sprecher had one really passionate employee, but he also had a habit of excessively yelling, using foul language and being difficult to work with. While the inclination for most managers would be to fire the person, Sprecher saw something in him and decided instead to hire somebody with the skills to manage him specifically.
“Because that passion for the business that the employee had was so great, I figured it’d be easier to fix the bad behavior than it would be to hire someone with that kind of passion,” he says.
While it was a huge challenge for that person, he eventually succeeded, and today, that employee is one of ICE’s most valuable employees — all because Sprecher decided to invest in him instead of fire him.
He says, “I just think that in life, you can train people, educate people about the job, but it’s very hard to find people who are dedicated and loyal and go the extra mile.”
Create discussion forums
If you want to resolve conflict in your organization, it’s pretty simple — have a meeting.
While it may not sound like a novel concept, it’s one that Sprecher has sworn by since he started ICE. Growth results in changes, and change can breed conflict.
“Good companies recognize that there’s going to be conflict, but you recognize that it needs to get resolved,” he says.
To resolve conflict in his company, each week, Sprecher has a meeting with 25 people. Those 25 people are mostly employees with at least a vice president title, but not every single person with that title is invited to come. Instead, if there are multiple people within a division, Sprecher chooses the one who can best represent the whole group.
“The people that are invited to that meeting are people that we think touch a lot of other people, so we’re trying to find the neck of the funnel,” he says.
The meeting is very rarely canceled, and everybody has to go around and answer: What’s on your mind, and what are you working on that everybody should know?
“The rule that we have is that everyone in that meeting can comment on anybody else’s issue, even if you have no domain knowledge or no expertise,” Sprecher says. “Everything is fair game for everybody to comment on, and that’s the forum to make the comments, and it’s not behind someone’s back. If somebody has been particularly on your case on an issue, it’s fair game when their issues come up that you can get on their case.”
Being able to talk about the issues facing you and the issues you have with other people helps keep ICE open and moving forward.
“The only good way to do it is to talk everything out, even if it takes a lot of time,” he says. “You have to get to the end of that conflict so it doesn’t manifest itself in unhealthy ways.”
Sometimes you’ll find that you have two people who are particularly passionate about a topic, but they’re at different ends on the solution. In those kinds of cases, let them duke it out verbally.
“When you get into conflicts where it boils down to two people who have very strong views, you kind of have to let it play out,” he says. “Everyone else just has to kind of sit back and let those two debate the issue until they get every possible angle on the table, and then we all kind of know how to sit back and let that happen, and then we’ll jump in.”
While most meetings last about two to two and a half hours, when these kinds of debates ensue, it could be much longer.
“Sometimes you can’t resolve the issue, and you agree to table it, and it’s the first topic when you get back together again,” Sprecher says.
It’s important to let things play out, but if people get nasty toward each other or aren’t sticking to relevant information for the topic, then you need to call them out.
“You throw the bullshit flag,” he says. “You have to say, ‘Stop,’ and you challenge somebody that this has gone far enough, you’ve made your point.”
Take risks to grow
If you’re not sure whether to do something, ask yourself, ‘If you were to fail, would you be able to make your rent?’
While you’re likely beyond the days of renting, it’s the principle that matters. When Sprecher started the company, he was worried about the downsides if he failed like not making his rent and not finding another job. So he thought through those two issues.
“A lot of it is calculated risk, because you’ll never have perfect information,” Sprecher says.
So, if he couldn’t pay his rent because his company failed, could he borrow money from family? Also, how long would it take him to find another job, and did he have any friends who may be able to make a job connection for him?
“You go through all of that, which you tend to do when you’re laying in bed and trying to fall asleep and your heart is racing ... you get obsessed with these things, and you just work through them,” he says. “You either end up staying up all night because you terrify yourself or you fall asleep because you’ve finally concluded that, even in the worst case, you can live through that.”
The key is when you’re weighing these risks, assess how you would handle the downside in order to calculate the true risk involved.
“The calculation is very much a risk versus reward, and then also thinking about what is the downside if you fail,” he says. “If you spend a fair amount of time thinking about what happens if you fail and planning for that failure, it makes the ability to take the risk pretty easy.”
For example, in 2007, ICE decided it wanted to try to buy the well-established Chicago Board of Trade, which was already entering into a merger. Sprecher did his thinking and realized that even if the company failed in buying it, that it would still survive and probably even still do well, so he went for it — and failed.
“Even though we didn’t end up buying the company, we gained a lot of stature in our industry, and a lot of people started to pay a lot more attention to us, and our core business actually accelerated because we were on people’s radar,” Sprecher says. “We had a very good image coming out of that failure.”
If you do make a decision and fail, make sure that you recognize that it’s failing and change course.
“The trick is not to not take the risk,” he says. “The trick is to make sure you’re honest with yourself that if it’s not going right, you aren’t wedded to the initial position and that you modify your position. If you do that, you can allow the organization to take some risk, and you don’t have to obsess over the initial risk. You obsess over, do you have enough feedback that if you’re wrong, you can modify the behavior.”
The key is to not feel limited by your size, and if you can think about the big pictures and all of these positive and negative consequences whenever you’re making risk decisions, you’re going to eventually come out ahead.
“The idea of a small start-up taking over a big incumbent wasn’t out of our realm of thinking,” Sprecher says. “I don’t know how to say it other than part of the growth of the company has been that we’ve not shied away from taking calculated risks in order to grow.”
How to reach: IntercontinentalExchange Inc., (770) 857-4700 or www.theice.com