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Headline: Jack Stack - Member of the managing board, Ceska Sporitelna
Source: Euromoney
Date: March 2000
Author: Philip Eade
When at the beginning of February Erste Bank of Austria announced that it had bought Ceska Sporitelna, the second largest bank in the Czech Republic, how many would have predicted that it had up its sleeve one of the best known and most respected figures in American retail banking to run it? Erste's chosen man is Jack Stack, who has worked for Chemical and its successor banks for 23 years, during which time he played key roles in the mergers between Chemical and Manufacturers Hanover and later between Chemical and Chase. No-one can tell this engaging fellow that he doesn't know an awful lot about retail banking. "He's a great thinker and a change maker," says his former colleague Vincent Pelliteri, a senior vice-president at Chase Manhattan Bank. "He's clearly one of the people who have made a difference to the US banking system."
Born in 1946, the son of Irish immigrants, Stack grew up in the Bronx, New York. His father ran a bar, and Jack spent much of his youth serving drinks learning a thing or two about how small businesses run. After high school he went to Iona College, where he graduated magna cum laude in maths and economics, and then to Harvard for his MBA.
After college, his first ambition was to help improve government services for the City of New York. As an aide to mayor John Lindsay from 1970 to 1973 he worked on such diverse projects as the removal of garbage from lower-income neighbourhoods, the purchase and renovation of the Yankee Stadium and police reform.
By 1975, Stack was working in the New York City courts, but he found that most of his time was devoted to saving expenses and laying people off. Deciding to move to the private sector, he joined Chemical in 1977 as a controller. He moved into cash management and in 1980 was one of the two main implementers of the shared ATM scheme between Chemical and Chase (known as the New York Cash Exchange). He also developed the strategy for Pronto, Chemical's innovative home-banking scheme. In 1983 he took over as group manager of Chemical's BankLink, then the largest cash-management system in the world, travelling extensively to Europe, Japan and Australia, and trebling the division's profits within two years. In 1985 he moved onto credit card merchant services where, as he remembers, his job was to "fix it up and sell it".
By 1987, he was managing branches in and around New York City. The emphasis was on switching from a transaction orientation to a sales orientation. Following the Chemical/Manny Hanny merger in 1991, Stack was put in charge of all the branches and all of the call centres - and of "downsizing". Over four years, Stack oversaw a reduction of 500 branches to 320 branches, while attempting to keep the bank's most valuable customers. The staff head-count was reduced by 1,400, saving $180 million. Stack was credited with accomplishing all this while retaining the merged bank's customer-base. "We always made sure that if we closed a branch to merge it with one nearby, that branch was better. It had more ATMs and a combined personnel so people saw familiar faces." It was also important to him, he says, to make sure that the layoffs happened "in a fair and humane manner". But he also recognized that "you've also gotta remember the folks who are staying".
When the next merger came along, between Chemical and Chase, Stack says: "Basically I'd closed all the branches that I wanted to close - it wasn't my turn to do it again." Instead he was assigned to the direct financial services group, to build up the merged insurance, investment, and e-commerce side of things. The number using the bank for e-commerce rose from zero to 400,000 in two years.
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