It was announced yesterday that John Hunkin was retiring from the CEO position at CIBC.
Many commentators made a point that his 6 years as CEO had been tough at best for CIBC and that his time at the helm was not the best for the bank. Maybe this will be the verdict of history. But I feel compelled to talk today of the brave and honourable man that I knew and worked with for many years and I hope to put his 36 years of service into the broader context.
My caution - I write this from memory of discussions with John and many others at CIBC that took place many years, sometimes decades ago. So please do not expect history or journalism - these are my memories of stories that may be myths. But the one thing I know is true - they represent the man I knew.
Many have criticized John time as CEO for being a risk taker. I find this ironic because that was why he was selected as CEO after a fierce competition 6 years ago. Then, CIBC's board chose novelty as they have today chosen security.
He is a risk taker. Why is novelty so important to him? I think that one of the reasons that John chose the new was he was an artist of the financial services industry. He knew the basics so well that he could play music when other men played only the notes.
How did this happen? My answer was that John was a CIBC brat. He learned all about CIBC and the industry as a child. His father was the head of personnel. That may not sound like much today but then! In them times, your career was run for you by personnel. You would get a letter from personnel telling you that you were moving to Moosejaw and you went home, told your wife and she said "Yes dear" packed and you moved. Under 25 and wanted to get married - you had to get permission. This was a different time. There was no computer system. The head of personnel had his little black book and thought about who was good and who was not all the time. What was going on at CIBC and all the banks was the dinner conversation at the Hunkin household and John absorbed all of this lore as a carpenter's son would joinery in the shop. By the time John left school, he "knew" what was going on and he knew what counted - people.
It seemed natural that John would join CIBC. You would have expected him to follow the well worn route to success but, from his first year, he struck out on the adventure route instead. The route to the top then was clear. The only bankers who counted were Corporate bankers. They had the big pens, the big relationships. Corporate banking was a club. So what did John do? He went into marketing! Today marketing is recognized as being central but then remember banks loved to say "No!". After a while, he was pressured to give up this foolishness. Did he go to Corporate Banking in Toronto? No he went over to London instead where the Euro Lending Market was just beginning. He was part of a small group of pioneers that started the Euro Market. John began a pattern of going to the new and mastering it.
His big break came later in Toronto. Don Fullerton, the heir apparent had been sidelined into "Planning". Top level politics at CIBC have been brutal for many decades. Determined to do something valuable, he picked John to develop a plan for CIBC in the US that would take CIBC from nowhere to becoming a legitimate player. This John did. The question was what to do with John's plan. John was very young and had had no wide operational experience. Don knew that John needed a good mentor and a senior partner who had the experience and perhaps the steady hand. He picked Al Flood and the two men set off for the adventure that made their reputation inside the bank.
This was the early 1980's. It is hard to recall how tough business conditions were at the time and for the first 2-3 years progress was not only slow but there were losses. It was all Don could do to shield Al and John from pressure at the board to back off. But then the results started to come in. Quickly CIBC's US operation became the shining light. The key - the people. John and Al had built a truly wonderful team of people that believed that they could take on the majors in key sectors. John learned that building the right team was the right move in any risky situation. His trust in people was his greatest strength and in the end maybe became his weakness.
By the way for a person who seeks the new, John is always low key. I never saw him throw his weight around and he listens very intently. He never blusters. His metaphor for choosing a person was whether he would have shared a foxhole with the person. John knew that there would be times when a person's courage and character would be tested and he looked for intelligence and heart. He despised corporate climbers. John attracts people to him though his own courage and his own character.
John and Al's success in the US was a turning point. Don became Chair and Al returned in triumph to Toronto to run the entire Corporate banking world. John was now the sole head of the wildly successful US operation. All John needed to do was to keep his nose clean and he would have a shot at the top job.
Don decided that CIBC was going to get into Investment Banking properly. 40 of us (This is when I enter the story) were grouped under Paul Cantor, who was a brilliant lawyer and thinker and we were told that we would to be the organizational equals of the mighty Corporate bank and the new Retail operation. Paul needed a known player to run the North American side. John gave up his relatively safe job in the US and came up to be the man with the hand on the tiller.
As I write this it seems an easy thing for him to have done. In the terms of the time John joined the leper colony. We were seen as being culturally dangerous, we lost money and for the mainstream we would likely as not all be fired soon. It was as if John left the British army in India and became a member of the Congress Party.
His job was not just to run the operations but we had also decided that we could not afford to buy an existing dealer either financially or culturally. An acquisition would have killed us - at the time, the mid 1980's the investment banking business was booming. So John once again began to assemble a team of rebels who would take on the establishment. For a few years all went well. It was a hard road but John was used to building a team. The everything changed overnight.
It was a fine day in October 1987. I had just left the UK after a hurricane and was visiting some research people in Greenwich. I was returning in a limo (those were the days!) to our office in New York when the driver told me to listen to the radio. The world seemed to be coming to an end. This was the crash. Everything changed. Now all the Canadian dealers were up for sale. There is a book to be written about this time but in the context of this short note, CIBC (read John) bought Wood Gundy (my old firm).
John now stepped up the level of risk that he had taken and left CIBC legally to take on the job of CEO of Wood Gundy.
John volunteered to leave the bank and to go into the lion's den of a gang who despised us and who were determined to find a way of getting revenge for having had to sell out to a bank. He took his devoted secretary Monica and me, his tail gunner into the pit. His job was to make the takeover work.
Lined up against him was the remainder of the old guard. On the sidelines were the old school bankers at CIBC who I think prayed for him to fail. Neither group wanted this to succeed. Why? Success would mean the end of the cosy club of investment banking of the time and would spell the death knell of corporate banking.
After a year, the situation became clear to John. The internal resistance at the top was such that it seemed inevitable that we would fail and that the cultural gap would crater the deal. He however had found allies among many of the younger people at Wood Gundy who saw that the Bank/dealer was the inevitable future and who wanted to play a role.
John went to the board and told it that he could not be certain of success but that if they backed him, he would bring success or go down with the ship. The old guard were swept away and the 'young turks' backed John and CIBC and came into power. This was a defining personal moment when the band of brothers took their careers and their reputations in their hands and made a stand. Many of these men and women became John's closest partners. John and they bet everything to make this move.
After the Wood Gundy deal settled, John and his team worked to build a global scale investment bank. and by the late 1990's had gone a long way to reaching this goal. I think that by this time, John had understood - and this is just my own feeling, that with good people, with time and perseverance, he could pull off things that seemed impossible. Even if he did not think this way, we all thought that of him.
So meanwhile, Don had left the bank after the Reichman melt down and Al had become chair. No one knew John as well as Al did and Al backed John solidly throughout his time as chair. Al's successor was to be chosen as a result of a horse race between John and the new world of investment banking and a fine man, Holger Kluge, who had built up the new engine of growth for the bank, the retail bank. As expected, the old power house, the Corporate Bank, had been swallowed up by the Investment bank.
CIBC is a cruel place when it comes to succession. I can only compare it to a medieval court. If there is a race , all those who belong to the losing side "die". If the prince inherits, the old kings men "die". We all know how the game is played but it is cruel all the same. When Al became Chair Paul Cantor and his men had to go - I was one of the last.
So in this context John and Holger find themselves waiting to find out who would become the successor to Al. John was chosen. Holger packed his desk and left that day. Within a year all his people had gone too and John's new men and women from Wood Gundy came into power. For the young turks the big bet they had placed had paid off - now they ran the bank that had bought them.
By this time I was long gone from CIBC and feel that I can no longer comment with any authority on what happened while John was CEO.
I did want to make the point though that while it may take time to assess John's role as CEO - his contribution to the bank has been enormous. He laid the groundwork for so much that is what CIBC is today. The bank's US organization, its role in investment banking and ironically its strength in retail.
John has never been afraid to go to the new and he has never taken himself too seriously. I see no sign of a paranoid holding onto power - there is a long history of this at CIBC. I also imagine that he and Susan will enjoy building a new life for themselves.
I wish them all the very best and hope that they will make much of their new life here in Atlantic Canada where they have a home.
