“New First Data CEO Bisignano Known to Fix Things” – Ruchika Tulshyan, Staff Writer-Atlanta Business Chronicle.
First Data Corp. has been going through some turmoil. The privately held Sandy Springs, Ga.-based electronic payments went $185 million deeper into the red in 2012. The company has also had several changes at the top since private equity group KKR & Co. bought it for about $26.4 billion in 2007.
Its latest move was to poach JP Morgan Chase & Co.’s Frank Bisignano as its brand new CEO.
“Bisignano is known to fix things,” said Joel Koblentz, senior partner of executive search firm The Koblentz Group. “This will change the dynamics of the organization.”
In the last few months, his search firm has had “a lot” of inquiries from First Data employees looking to change jobs, he said. “This is usually an indication that there’s either a lack of comfort with the ownership or the future of the business.”
Private equity owners are known to make major changes to companies they buy, often at the expense of employee satisfaction.
“Private equity-owned boards have two interests: how much can they make and how fast can they make it,” Koblentz said. “KKR is stuck and can’t get out. They want results fast.”
Bisignano, for his part, has a track record for putting things right. Before JPMorgan (NYSE: JPM), he was at Citigroup Inc. (NYSE: C). One key role was overseeing operations after the Sept. 11, 2001 attacks. After joining the nation’s biggest bank in 2005, he became co-chief operating officer, overseeing the housing crisis, with the additional responsibility of serving as CEO of Mortgage Banking. While fighting cancer, he also handled major negotiations at JPMorgan’s London offices.
But according to Koblentz, Bisignano’s decision to leave JPMorgan is also telling about the way things are run at the bank. “He was looking for something to run and JPMorgan’s board reaffirmed Jamie Dimon as chairman and CEO so he was probably looking for a CEO opportunity too,” he said.
“He woud have gone through a strategic review of what First Data needs now. KKR would have a specific mandate of what are their expectations and he would be in charge of making sure that strategy aligns with operations,” Koblentz said. “He needs to pivot the company out of the ditch.”
Most industry analysts say it takes about 90 days to see how a new CEO will run a company. But “the best CEOs work in some sort of alchemy between making immediate changes and more changes over time,” he said. “Any change at the top reverberates through the entire organization.”
Koblentz also said he wouldn’t be surprised if “key lieutenants” from JPMorgan or other places Bisignano has worked at, move over to First Data. “He could likely bring over people he knows and trusts.”