Anti-Hierarchy Information Flow

"We need your help. Please help us get a message out to every associate. It is essential that once again we stress that we welcome every suspicion or feeling that our co-workers might have about something they see or hear that is going on at Bear Stearns that might not measure up to our standards of honesty and integrity. This should be a H.M.A.* crisis-control yellow warning. We want people at Bear Stearns to cry wolf. If the doubt is justified, the reporter will be handsomely rewarded. If the suspicion proves unfounded, the person who brought it to our attention will be thanked for his or her vigilance and told to keep it up. Forget the chain of command! That is not the way Bear Stearns was built. If you think somebody is doing something off the wall or his/her decision-making stinks, go around the person,** and that includes me."

"1. He is a strong believer that people who talk too much seem to have bad luck. 2. People who do not return phone calls promptly do not seem to make the grade at a highly profitable firm. 3. People who object to end runs will never make it in football, or with successful investment banking firms. Certain groups do need to observe a “chain of command” atmosphere, but highly motivated, intelligent people do not need this handcuff. 4. A firm that has enthusiastic receptionists and telephone operators starts off with a tremendous advantage over the dummies of the world. Keep in mind that the first impression people receive from Bear Stearns is with those associates. 5. If a business person has to ask his accounting department if he is making a profit, he will not be in business very long."

"I can guarantee very little about the future, but there is one thing you can bet on. Your executive committee is going to spend a lot of the new year stressing fundamentals. I do not think our success has been due to luck (although all of us welcome and appreciate good luck). Football teams that are in great condition and can block and tackle, win. We are going to win because we constantly keep in mind certain axioms such as: 1). It is our job to inspire receptionists and secretaries to smile and sparkle when speaking to or seeing clients. The top people at Bear Stearns set an example by returning all calls promptly. 2). Avoid the herd mentality. 3). Control expenses—even more so in good times. 4). Every department should be staffed with the best and the brightest because I cannot tell you which area of our business will be “hot” six months from now. 5). Reduce expenses. 6). We are going to stick to the things we think we know something about. I am too old to start selling cars, costume jewelry or life insurance. 7). Conceit and complacency are dangerous, particularly in our line of work. If I ever feel that the people at Bear Stearns start thinking their body odor is perfume and I cannot convince them otherwise—I will sell my stock. 8). I like people who conduct their business “neat and clean.” If you do not understand that, call me. 9). Cut expenses. 10). We must always be on guard in dealing with new relationships, and our associates must always be aware that we are watching the shop and them at all times. The best protection against in-house fraud is for management to have a great rapport with associates big and small. They will see aberrational behavior in a co-worker four years before internal audit spots the deception."