John Taft is contemplating how to make a difference in what he calls “the next chapter” of his life.
At 61, the chief executive of Royal Bank of Canada's U.S. Wealth Management division is retiring at the end of May. Anything from writing a third book to running for elected office is a possibility.
Given he's the great-grandson of President William Howard Taft, public service would seem a natural fit. But the New Haven, Conn., native and Yale University graduate says the divisive politics of today aren't for him, unless such a role were the best way to effect significant change.
Mr. Taft sought to make a difference within the financial services industry in 2011 when, as chairman of the Securities Industry and Financial Markets Association, he was vocal about pushing the Securities and Exchange Commission for a uniform fiduciary standard. The agency still is slowly moving toward such a step, while the Labor Department has already moved ahead with its own rule requiring best interest advice for retirement accounts.
Much has changed at RBC's Wealth Management-U.S., based in Minneapolis, since Mr. Taft took over in 2005, including dropping Dain Rauscher from the business name and adding banking products and services with RBC's purchase last year of City National Corp. Mr. Taft's focus has been to make sure RBC Wealth Management's 1,900 advisers feel like they are making a difference.
Liz Skinner: When was the first time you were in a leadership role?
John Taft: I was the captain of every soccer team I played on, and to this day I would say the mistakes I made and the lessons I learned there remain among the most important ones in my life. There's a syndrome called captain-itis, where first-time leaders can think they have to do it all. But nothing is further from the truth. Just because you are the captain of the team does not mean that your role on the field changes. You have to be more cognizant to worry less about yourself and more about others. That's not completely obvious to young men given that role, but it's also true of other leadership roles. It's a form of grandiosity that you can fall into and have to learn why that doesn't work out.
LS: Tell me about your management style and how it has evolved.
JT: Most managers who are young over-manage and micromanage, and second-guess others. I've been running businesses for 30 years, and over that period of time I've been doing more letting go, delegating, trusting people and at the same time, being clear about objectives. Knowing when to intervene and when to stay away is something that you learn on the job. There isn't a school that teaches you how to do that. I have become more hands off, and I focus on strategic direction. I focus on outcomes and objectives, and I let people working for me do their jobs.
(More: From the C Suite with Commonwealth's Joe Deitch: Recognition he didn't know enough helped him save the firm)
LS: Was there a time when you had to overcome adversity in life and work?
JT: Professionally I have had a handful of near-death experiences. I have done things and had things happen to me where I wasn't sure I would survive professionally. One was while I was running a small broker-dealer, Dougherty Financial Group, in 1998, and one of our business lines was small-cap stocks. There was something called the Asian Contagion that was hugely disruptive in the emerging market and small-cap stocks were hammered. The business I was running for my partners was in danger of failing. I had recommended that we invest in this business, it was my vision for what this could be, and I felt like I was letting my partners down. I can remember going out for a long walk, drafting my resignation letter, so stressed that I was just not functioning. For me it's like going down an elevator shaft until you hit the bottom. There, I thought, we are at net-capital violation, but I can solve this. I went and bought our inventory of trading securities out of the business personally, and that solved the capital problem and allowed us to operate until the market recovered. I ended up selling the securities back at cost, and it all worked out.
There have been half a dozen such moments, and they are characterized by a shiver going down the core of your body and thinking, 'Oh my god, this is really serious.'
LS: Your great-grandfather was the nation's 27th president. Did you ever have an interest in public service?
JT: I served as the aide to the mayor of St. Paul in the 1980s, and I am asked several times a week when I'm going to run for public office. Everyone who works with me assumes that's what I'm going to do next.
LS: Are they right?
JT: No they're not! I have many of the attributes of a political person, but for someone who cares about making a difference in the world, and I do, I don't think holding elective office is the best way to do that. What I've tried to do in my life so far is to be civically engaged as a private citizen and get involved in things that make a difference. I do it independently without the need to be beholden to anybody but my family. That's what I would like to continue to do.
On the other hand, if there were something that was so important to me that the only way I thought I could make a difference was to serve in elected office, then I would. Same-sex marriage would have been one of those issues, but we have taken care of that by a lot of people being civically engaged.
LS: Are there any candidates running for president you are standing behind?
JT: Yes, I'm proud to announce that I've supported [former Florida Gov. Jeb] Bush and [Ohio Gov. John] Kasich, which is another reason that running for office probably isn't really a smart idea for me right now. But those are my people. I'm a moderate Republican and I believe in people's right to live their own lives. We seem to be an endangered species right now.
(More: From the C Suite with Baird's CEO Paul Purcell: Incentivize people and give them space to run)
LS: Tell me about someone in your life who really influenced the person you are today.
JT: My [Yale University] soccer coach Hubert Vogelsinger. I wrote a
blog about him on LinkedIn, and it was one of my most popular, called “This Soccer Coach Taught Me to Never Settle for Economy Class — Always Aim for World Class.” I had my entire being focused on winning this guy's approval, and I did. They used to call me little Hubert because I did everything that he did. He was all about focus and I connected with that. Absolute focus is one of my attributes.
LS: Where do you fall short as a leader?
JT: I am more big-picture oriented than detail oriented, and when I've gotten in trouble it's because I haven't paid attention to the details and haven't had people paying attention to the details for me. The other thing with the Tafts is that intimacy isn't one of our innate skills. Showing empathy and investing more in people emotionally would be the second area where I fall short.
LS: What kind of culture have you tried to foster at RBC?
JT: A stewardship culture. That's very much reflected in the book I wrote [“Stewardship: Lessons Learned from the Lost Culture of Wall Street” (Wiley, 2012)], that we are here for a purpose. I believe everyone wants to know that what they do when they come to work for eight, 10, 12 hours a day is important and makes the world a better place. That's when you get the highest level of engagement, where you get the best outcomes for your clients and customers. So I have tried to create a culture that's all about what's right, and I call that a stewardship culture.
LS: What have you done at the firm to create a stewardship culture?
JT: During the financial crisis I wrote my book on stewardship, and I did it so that people could have a road map for what I cared about and what I was trying to accomplish. Championing the fiduciary standard for personalized investment advice is one of the things that I tried to do that's consistent with the stewardship culture. I've always believed in leading by example, and I've tried to set an example for what I think is important in our industry.
LS: What are you going to do after you give up the CEO reins at the end of next month?
JT: The best advice I've gotten is to not do anything too quickly, to not swing at the first pitch. So I'm going to take the summer off. Since I have announced my intention to leave RBC, I have had lots of incredibly stimulating conversations with people and have many ideas of what I can do next. But what I need to do is to get away and get perspective, and figure out what I want to do. I have one more chapter in my life. I want to make a difference; I want to have an impact. I need to figure out what I'm ready to fully commit to. I don't know right now.
LS: Do you think it will be business related or philanthropic?
JT: It could be any of the above. I encourage you to call me on Labor Day and ask me how the summer was, and I can tell you whether I've figured it all out.
