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 Innovation/Global Crisis Blog

What We All Can Learn from Howard W. Lutnick:

How to Endure (Catastrophe – 9/11) and Prevail

By Shlomo Maital

  Howard Lutnick, Cantor Fitzgerald

         On Sept. 8/2001, Howard Lutnick was literally on top of the world, as CEO of Cantor Fitzgerald, prince of Wall St., looking down at his rivals from his 105th floor office in the World Trade Center. 

        On Sept. 9, when American Airlines Flight 11 struck Tower One,  658 of his employees (including his younger brother Gary) perished, and Lutnick himself survived by a fluke (he was bringing his son Kyle to his first day of kindergarten).

        Here is how Lutnick endured and prevailed.  He cut off paychecks to the families of his employees on Sept. 13 – arousing huge bitterness.  His London office head Lee Amaitis reconfigured Cantor’s trading systems so that trades could be processed through the London office.  Lutnick moved to a windowless computer center in Rochelle Park, NJ, and shifted to eSpeed, electronic trading.  He came up with a plan to give the families of those company employees who perished 25 % of Cantor’s profits over the coming five years, and appointed his sister Edie Lutnick, a lawyer, to head the charity that ran this program.  Angry families said, “a quarter of nothing is nothing!”.   But soon they were silent, because the checks that went out were larger than the salaries employees had earned.  The bereaved families now say,  Lutnick did everything he promised.    Lutnick rebuilt Cantor, into two businesses – a stock and bond trading desk and an investment bank operation.  Today it thrives.  Before 9/11 Cantor employed 2,100 people worldwide. Today it employs 5,000!    Strangely, the bulging debt America created, that led to the 2007-9 crisis, actually greatly benefited Cantor Fitzgerald, which runs nearly half of all trades in US Treasury securities. 

   The source of Lutnick’s resilience is perhaps his own background.  He was orphaned as a teen, and worked his way up from the bottom at Cantor, in an industry where Ivy League and wealthy parents are a huge advantage.  He was greatly disliked, as a ruthless competitor.  He says he rebuilt Cantor mainly, even solely, to generate profits for the families of employees who died.  “The only way to take care of everybody,” he said, “was to have a company”.  He uses what he calls the ‘surfer’s theory’ – “you see a big wave, you keep surfing, going forward, you just don’t look back!”.

    I wonder how many of us could experience 9/11 as Howard Lutnick did, then rebound and rebuild.  The ability of the human spirit to bounce back from adversity and catastrophe is infinite – provided we believe in it, believe in ourselves, and work to serve others. 

Based on: The New York Times: Susanne Craig,  “The survivor who saw the future for Cantor Fitzgerald”, Sept. 3, 2011.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
September 2011