The Power of Positive Destruction

Chapter 10 If You Don’t Make Mistakes, You’re Not Trying Hard Enough

Liquidnet was now in a unique position—and not an enviable one. We went from everything we touched turning to gold to everything we touched turning to lead. It was a somewhat gradual fall from grace. And it was both extremely painful and very instructive.

Of course, this change from hot to not initially had a lot to do with the weakened economy and the frozen markets. The crisis was a lot worse and lasted a lot longer than anyone expected—and it hurt us much more than we anticipated.

Our revenues declined from our peak in 2008 through the aftermath of the financial crisis, until 2012. We didn’t stand still in these years. We continued to invest in new opportunities like algorithmic trading and Asia-Pac. We worked on our systems and our processes; we continued to train our people. But nothing we tried worked. It was incredibly frustrating and demoralizing. As a result, the leadership lost confidence in its own ability to manage out of the crisis, and so did many of the people who worked for us. We had to acknowledge, just as we had previously with the board, that the people who had gotten us to this point were not the right people to lead us out of our problems.

We needed new talent with new skills. We hired people with more management experience who had run or operated larger companies than those of us in Liquidnet’s leadership. We needed people who could guide us through this turbulent period, people who ...