Trust, innovation and building strong relationships – those are the keystones of success. That’s according to Philippe Chambadal of SmartStream, a company with a commitment to improving business performance for clients in the financial services industry. He tells us why embracing technology, encouraging a culture of creativity and staying healthy should be on every CEO’s mind.
Philippe Chambadal, chief executive officer of SmartStream, a global software and managed services provider, is a CEO on a mission to provide innovative technological solutions that help organisations improve the performance of their business.
You would expect CEOs to talk up their firm's products and services. However, there is no question that Chambadal passionately believes in the power of technology to provide his clients in the financial services industry with a competitive edge.
At the moment, Chambadal's focus is on SmartStream's range of productivity-improving, cost-reducing services. A capital market transaction - trading equity or debt instruments, such as stocks and bonds, for example - may seem simple to the parties either side of the trade. Yet, for the banks executing the trades, the transaction life cycle is extremely complex.
It involves a range of processes covering areas such as cash and liquidity management, post-trade processing, corporate actions - events such as dividends, coupon payments and stock splits - and transactions fees and invoices. Add regulatory compliance and high volumes to the mix, and it is easy to see how managing the transaction life cycle can become a costly headache.
It is a headache Chambadal is determined to ease.
"There are enormous inefficiencies in back-office processing in capital markets", he says. "By introducing our solutions, clients can eliminate a lot of manual processes. They can reduce data mismatches and trade breaks. We offer a support function that manages the entire transaction life cycle, from the time of trade to clearance settlement, plus everything in between, making sure everything flows smoothly."
It is, says Chambadal, a level of efficiency that can push the low straight-through processing rates of about 84% typically found in Wall Street firms to around 97%. That equates to millions of dollars of annual savings for a major bank.
Route to the top
Chambadal was appointed SmartStream's CEO in 2009, after leading the firm's acquisition from private equity firm TA Associates, on behalf of Dubai International Financial Centre Investments. It is the latest episode in a technology-related career journey that began nearly 30 years ago.
"I knew very early on, when I was a student, that I wanted to be in technology," he says. "I always found it fascinating, especially the rapid pace of change."
Starting at Reuters Paris in the late '80s, he headed to the US by way of a country manager role in Portugal. In New York, he set up a research and analysis division at Reuters-owned Instinet, an off exchange electronic trading platform, and also helped to found Reuters New Media in 1993.
"I had a new job every 18 months to two years," says Chambadal. "Being one of the youngest country managers at Reuters allowed me to see every aspect of the business, finance to news, the real-time aspect and the software. I was very lucky to get a view on all the functions within different parts of the business. It was a fantastic learning experience."
After Reuters, he was part of the team that acquired data warehousing firm Fame. Later, in 1998, he founded MetaMatrix, an enterprise information integration solutions vendor, and served as its CEO until its sale to Red Hat in 2005.
Along the way, Chambadal has learned a lot that has helped him in the CEO role. Take the importance of trust, and building connections and networks, for example.
"In any given market, there are a number of people that make a difference. It is the same with our clients. When you start gaining the trust of the decision-makers - the head of operations; of IT; of the trading desk - that follows you throughout your career.
"These people see you as somebody that will listen, that they can partner with, somebody who will see the trends and build new solutions to help them keep on top of changes - market or regulatory."
That trust is critical when it comes to solution implementation, believes Chambadal.
"My entire career, I have been pushing new ideas and new concepts," he says. "People who embrace new ideas, particularly in large firms, have to be mindful of the potential impact on their firm if those ideas don't work. It takes a certain level of trust and a certain kind of person to accept that change."
The need to build strong and effective relationships is also important inside the organisation. To be an effective CEO, it is essential to have a good team around you.
"When you have a lot of strong smart people, getting them to work together in a team that functions well is a complex task," says Chambadal. "The right chemistry between team members is essential. With 20 offices around the world, we have to work on it all the time. If you don't have an excellent team, you will fail."
So what are some other important components of the CEO role? Chambadal believes direction-setting is a crucial part.
"You set out the goals for the company. Define a plan of how to get there and, as part of that, make sure you have the right team in place to get there," he says. "If you haven't, then you find the best people out there to fulfil the mission."
Then there is innovation. A CEO's attitude to innovation can make or break a company, as it helps set the innovation culture within the firm.
"Innovation is critical. With the right idea, it is often winner takes all on Wall Street," he says.
It is something Chambadal experienced first hand with Reuters and the Instinet platform. With little competition, the company grew at a phenomenal rate for several years. It is an experience that has stayed with him.
Indeed, innovation is a theme that has flowed throughout his career - at Reuters, Fame, MetaMatrix and now SmartStream. Acutely aware of the competitive advantage that innovation can provide, Chambadal wants SmartStream to stay on the right side of the divide.
"We encourage that culture of innovation," he says. "I try to hire people who are smarter than me, who have better ideas, and who can multitask. The mavericks are always welcome in the company. In a lot of larger technology companies, you find that innovation is not rewarded, and management doesn't seem to encourage new ideas."
For Chambadal, leading a firm through a difficult economy means staying innovation savvy.
"A lot of software vendors have reduced R&D budgets in this tough environment," he says. "We kept R&D at a high level - 26% of revenues - and we've created a new solution every year since we acquired the company.
"The clients like it because it shows that we're a good partner. We listen to them, understand their problems, and create new services that they can leverage to improve their balance sheet, reduce their expenses and make sure they are compliant."
This approach has enabled SmartStream to prosper during the recent economic downturn. Being agile is essential, says Chambadal. It allows the company to offer solutions that meet the client's needs given their particular circumstances.
It is a question of finding the opportunities, listening to and understanding the clients' problems, and offering them a plan - whether it is a three, five or seven-year one.
"If they understand the plan, then we can reposition SmartStream to become part of the solution instead of an additional cost," he says. "We become a way to make the bank more efficient, which is exactly what it needs in a downturn."
It highlights another focus for Chambadal in his CEO role - constantly keeping in touch with the ecosystem that SmartStream is part of; with markets, clients, competitors and clients ready to move quickly when opportunities arise.
"You don't do innovation in an ivory tower," he says. "You go to the trade shows and talk to as many people as you can, at all levels, not just other CEOs.
"You need to talk to the practitioners, the people who write the code, the people who are really facing problems and understand the pain points. It is constant scanning of new ideas, new companies, you can't stop. If you stop, you have had it."
Mission in mind
The CEO role is demanding, mentally and physically, and requires considerable resilience to cope with the constant pressures. Much of Chambadal's time is spent travelling the world; he does a minimum of two to three red eyes a month, for example.
"If I didn't go to the gym three or four times a week, I don't think I'd be here. I couldn't function," he says. "I need to always show my best, be on top of my game, there's no downtime."
He is also very careful to filter information.
"As CEO, you're bombarded with information, so you try to distinguish between noise and useful information," he says. "I make sure that I know what's happening within the company, who is performing, and where we have issues.
"People can call me on my cellphone all the time. The earlier I know about a problem, for example, the better. The sooner I know, the sooner we get a team together, pool resources, and don't stop until the problem is fixed.
"I need that transparency, so that when I see a client I can say, hand on heart, we are going to deliver when we say we will."
Chambadal is proud of what SmartStream has achieved in the time he has been there.
"We bought a software company, and we are transforming it into a managed services company," he says. "The management services we have around back-office utilities, invoice management and reference data utilities are all doing well."
But, as Chambadal knows, no matter how well you are doing, there is no room for complacency.
"You shouldn't take anything for granted," he says. "You have to keep your feet on the ground, stay in touch with reality and always keep the mission in mind."