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MIT Leadership Center

Interview: Marsh Carter

Successful leaders know how to find common ground — and when to leave it behind. In his years in the banking industry and military service, NYSE chairman Marshall N. Carter has seen it all: mergers that never quite merge, consensus-seekers who fail to move ahead, leaders who neglect the basics. From dealing with the disgruntled minority to keeping your individualism intact, Carter provides tips on successful leadership.

Although “nothing about motivating and leading people has been truly new since the Roman legion,” Carter says, “These are techniques I’ve picked up from many places throughout my 44 years in the work force that work for me,” he says.

Simplicity rules
Sometimes, the most effective leadership techniques are the simplest. Carter recalls the city of Buenos Aires’ efforts to reinvent the image of an urban waste disposal system that was unpopular, an eyesore and smelly to boot. The city, with a population of 3 million, produces 4 to 5 thousand tons of waste daily. The city manager who was put in charge of the operation clad the garbage collectors in white uniforms, provided training in courtesy and steam-cleaned the filthy trucks. He even moved his office out to the dump. “These are simple, very effective leadership tactics,” Carter says, examples of basic, direct actions that are too often overlooked in an increasingly complex world.

Manage culture clash
When two organizations merge, don’t let one co-opt the other. Carter says his experience of weathering several mergers taught him “if the leader picks one of the two entities’ management styles or cultures over the other, you end up with winners and losers. Instead, take the strengths of each organization and create a new culture and a new direction.”

After the merger, an estimated 60 percent of the employees will be relatively indifferent, 20 percent will be strongly supportive and 20 percent will be strongly non-supportive. Focus on the positive and neutral majority rather than the negative 20 percent, Carter advises. “This is one case where the squeaky wheel shouldn’t get the grease,” he says. To get everyone on board, “score some early wins, even if this means changing priorities or timing. This makes change irresistible to those who resist change.”

Don’t pursue consensus over progress
Too many leaders who claim to be consensus builders strive too long for a consensus that may never be achieved. “The hard part is to know when to stop,” Carter says. “A good leader will entertain opposing views and alternative plans of action until the time that he or she has all the useful input they are going to get, and then it’s time to move forward.”

The ability to recognize that moment is not something you can learn in a classroom. “You can teach the importance of analysis of various courses of action, but recognizing the exact moment to take action — that’s really a judgment call based on a leader’s experience.”

Beware of “malicious obedience”
In organizations lacking an open, honest exchange of ideas, a phenomenon called malicious obedience can rear its ugly head. This occurs when people set their boss up to fail by doing exactly as he or she says even though they know in their hearts that their actions are incorrect or not optimal. “This happens in organizations where the boss doesn’t invite feedback or entertain any backtalk and there is no open communication,” Carter says. “As a leader of an organization, you have to be open to all alternatives until you’ve made your decision.”

Balance is key
Leaders must balance short-term and long-term management tasks, and weigh the overall goals of the organizational mission with responsibility to its followers and constituents. Balance in personal life is critical as well. “You can’t just go back and forth between work and family life — you also need a strong outside interest in which you can express your own personality,” he says. It might be running marathons or collecting stamps, but “everyone needs an outside interest that allows you to drop the pressures of work and reinforces your individuality.” For Carter, flying seaplanes along New England’s rocky coastline from Maine and Nantucket meets that role. He thrives on the challenge of landing in unpredictable wind and water, and piloting seaplanes fulfills his lifelong interest in aviation. In his personal and professional life, Carter follows his own advice to aspiring leaders: “Take the high risk, high reward route.”


A leader in the banking industry, a Marine Corps officer, and a decorated Vietnam veteran, Marshall N. Carter took over as chairman of the New York Stock Exchange (NYSE) in April 2005. Carter’s 25 years in banking include a nine-year stint as chairman and CEO of the State Street Bank and Trust Co. and 15 years with Chase Manhattan.

A veteran of mergers such as Chase Manhattan’s 1984 acquisition of Lincoln First Bank and a key player in State Street’s evolution into a global leader in the financial services industry, Carter has witnessed the challenges first-hand when a company grows more than six-fold under your watch.

As NYSE chairman, he is transforming the Exchange from a company with “85 percent market share in a product sold one way” to a company with an expanded product base and widened global reach. With characteristic understatement, he adds, “We are in a global industry.”

Marsh Carter, NYSE
Michael Kaiser, John F. Kennedy Center
James F. Parker, Southwest Airlines
David T. Morgenthaler, Morgenthaler Ventures
Anne Mulcahy, Xerox Corporation

Tim Brown, IDEO
John Browne, BP
Peter Diamandis, X Prize Foundation
Carly Fiorina, HP
Lawrence Fish, Citizens Financial Group
Michael Kaiser, John F. Kennedy Center
Henry Mintzberg, McGill University
Marilyn Carlson Nelson, Carlson Companies
Ricardo Semler, Semco S.A.
Dan Vasella, Novartis
Rick Wagoner, GM
Jack Welch, GE