Nasdaq CEO Adena Friedman on leadership and competing with NYSE

Adena Friedman doesn’t
want the constraining label of “female CEO” but also recognized
its power to influence women into leadership roles at her
company.
Hollis Johnson/Business
Insider

• Adena Friedman became CEO of Nasdaq
  last year, after two decades at the company.
• From the very start of her career, she learned how to
  make her voice heard, and then figured out how to mediate her
  power when she became a leader.
• She said that when competing with the New York Stock
  Exchange, particularly on cryptocurrency, it’s not important to
  be a “first mover.”
• She said approaching every day like it’s her first on
  the job is the key to avoiding complacency.

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Adena Friedman has the top job at Nasdaq, the world’s second
largest stock exchange. She joined the company in 1993 as an
intern, and she’s worked there for all but three years of her
professional career.

On an episode of Business Insider’s podcast “This
Is Success,” Friedman said she judges herself based on two
questions: “Well, have I achieved everything that I could have
achieved with the skills that I have? Have I brought my best self
to the job every single day and do I treat every day as day one?
Because that to me is the most important thing that I can do for
the success of the company.”

When Friedman became
the first female CEO of a global stock exchange, she got
tired of being asked about her gender in interviews. But then she
realized she could leverage it at Nasdaq by helping other women
make it into the C-suite. It’s how her mom inspired her in the
first place.

Listen to the full episode here: 

Subscribe to “This Is Success” on Apple Podcasts, Google Play, or
your favorite podcast app. Check out previous episodes with:

Transcript edited for clarity.

Adena Friedman: My mom really has been my hero
because she grew up in a world where being a stay-at-home mom was
very much the path of choice. And she was a stay-at-home mom, and
she was awesome at it. But when I was 9, she realized that she
really wanted to have a career of her own, and she had a real
desire to become a lawyer. Her dad was a lawyer, and I think she
really had great respect for what he did. And so she went back to
law school and then became an estates-and-trusts lawyer, and then
became the first woman partner in her firm. And just watching her
progress and really transform her own life into something that
was just so meaningful for her was really, really important for
me to see, and I think that’s why she became a hero.

Richard Feloni: Did that change your
relationship with her as well?

Friedman: She was amazing, because she still was
there to make dinner most nights — although my dad did start
making dinner a couple nights a week, which was really cool too.
He really changed some of his work habits so that he could be
around.

They were never kind of overbearing parents in any regard at all,
but it also forced me to be a little more independent as I got
older and became a teenager, which I think was actually good for
me. And so it changed the relationship just a little bit, but she
was always there when I needed her. Always.

Feloni: And your dad, he was CIO at T. Rowe
Price?

Friedman: That’s right.

Feloni: Did that influence you wanting to get
into finance?

Friedman: Yeah, yeah, I think so. My brother and
I are both in finance, and part of it was because he would bring
us to the office, and we did get to hang out there and get to see
what people did, and he made the work environment seem fun.
Actually, we had a ton of fun. And then people were really,
really nice about giving me things to do and making me feel
useful, and so I got to see what it was like to be part of that
environment. And they would teach us about investments; we would
talk about investments at home and just try to understand what it
all meant. And so—

Feloni: So you’d be a kid talking about finance
stuff?

Friedman: Well, I was very curious about what he
did, and so understanding how he looked at fundamentals, how he
would make investment decisions, what was important to him, why
was he going to China in the ’80s — he traveled all over the
world — so what was he learning? What was he trying to
understand? He would read every paper, so what was he trying to
get out of the papers? Those are the kinds of questions that I
would ask as I got older and had a better understanding of what
he did.

And I think that having that and understanding it, at least at a
surface level, made it so it wasn’t this big mystery. It was
something I could understand. And even though when I was growing
up I wanted to be an astronaut and I wanted to go into
international relations and other things, by the time I had
matured into saying, “Well, what is it that I really find
interesting?” finance really was at the top of my list.

Feloni: So you were considering going to DC,
right?

Friedman: Yeah. So I had grown up in Baltimore,
and DC was always the big city down the street and always to me
was the center of power, and you could feel it. You’d go there,
and you’d just feel these in the history of the country. You’d
feel the power structure that was there. And so I kind of really
thought that was where I wanted to go.

So I went onto the Hill, and I had a great experience working for
a congressman and then a senator, and it was great. But at the
end of the day I realized that I wanted to be in a place where I
could have more immediate impact, and so business was ultimately
the perfect choice.

Making her voice heard

Feloni: At
the commencement speech that you gave last year at your alma
mater, Vanderbilt’s business school, you told the story about how
when you were 28 you took on a project that basically changed how
you started your career. Could you explain what that was?

Friedman: When I was 28, I became in charge
of a product called the Mutual Fund Quotation Service. And it was
a really small, like, little mini-business within Nasdaq. It was
a small product that hadn’t really been revamped for a long time.
Since it was kind of a pretty standard service, it really hadn’t
been touched for probably 10 years or more by the time I took it,
and I had written a business plan about it a couple of years
earlier, saying, “Well these are the things we could do to
maximize the opportunity in the business.” And they said, “OK,
well, here you go.”

Friedman
at age 22, around the time she was at Vanderbilt’s business
school.

Adena
Friedman/LinkedIn

Feloni: Was this a project that was, like, more
senior leaders wouldn’t want to touch it? They’re like, oh, just
give it to you because you were younger?

Friedman: Yeah. I mean, it was very much kind of
an ancillary product. It wasn’t central to trading. And they kind
of said, “Well, she’s a young person — let’s try to see what she
can do with it,” essentially. And they did give me complete
autonomy to do with it what I could.

The most important thing was to find a technology team. And there
was a gentleman in the technology organization who I really came
to respect and admire, and he said, “If you give me enough time
and money, I can do anything for you.” And then once I kind of
proved myself that I wasn’t just this 28-year-old person who
didn’t know what she was doing, that I was actually someone who
could really help him get the resources he needed, we actually
formed a great partnership.

Feloni: What did you want the universal takeaway
to be from this story when you told it?

Friedman: Well, the first thing is: take those
opportunities when they’re given to you. Right? I was offered
this opportunity, and then—

Feloni: Even if it looks bad in the first place?

Friedman: Right. I mean, even though it’s, like,
this product that no one really thought much about, it was an
opportunity for me to have a lot more autonomy by taking
something that people didn’t care as much about it. It actually
makes it so you can have a lot more impact on it and you can have
a lot more autonomy.

The second thing is: find those people who are going to help you.
Don’t assume you’re going to do it yourself. You have to have
those people, those experts around you who are better at their
jobs than you are, to help you find success.

Feloni: There’s a
profile of you in Vanderbilt magazine, and they interviewed
some of your former classmates, and they basically described you
as kind of being very confident and intense without being
ruthless or aggressive. How do you see yourself?

Friedman: I thought that was actually
interesting, because I thought it was very … I was just
interested in reading what they had to say than anyone else.

I think that the one thing that I learned early in my time at
Vanderbilt was I always chose to be the editor of any group
project. So that was the one thing that they probably saw, which
was anytime I was in a group, I said, “I’ll be the editor,” which
means you actually ended up doing a lot of extra work — but you
want the product to be consistent. You want it to be consistently
written. You want it to have consistent ideas throughout. And so
there’s extra work, but honestly it gave me the ability to kind
of control the outcome a little bit better. And I think people,
luckily, would trust me that I was going to do a good job at it.
And so I think that probably manifested itself in me being
considered kind of driven.

Feloni: Could you explain this meeting tactic
that you have called, was it “lightbulb
versus mandate“?

Friedman: Yeah, and it was actually Brad our
CIO’s idea to bring that into the room, because the former style
within Nasdaq was very much a command-and-control style, which
meant that the leader, once they said something it happened,
right? And so it was before I became CEO, and I started realizing
that every time I said something, everything just happened, even
if it was just an idea, right?

So a lightbulb, it’s just running an idea on the table — let’s
debate it, discuss it, let’s get other opinions in the room.
Just, in a way, kind of think of me as a peer in the room, all
thinking together. But then in those times it becomes a mandate,
meaning, “OK, it’s decision time” — or there are certain things
where I just say, “Look, we have to do it this way,” then I say,
“This is a mandate.” And I use that pretty rarely. But it’s an
important moment when either we’ve all coalesced around a
decision and we made a mandate, or there are certain things that
I just feel like have to be done a certain way. But most of the
time you kind of bring these lightbulbs into the room and you
hopefully come to a better decision as a result.

Feloni: Do you think that that’s changed your
relationship with your employees?

Friedman: I do think that it makes it so it’s a
more open environment. So there’s a collaboration element to it,
and that’s the lightbulb phase, and then there’s the command
element to it, meaning, “OK, now it’s time to act. Let’s go the
road. Let’s make decisions based on facts, based on analysis.”
But once the decision is made, we all have to march down the road
the right way.

Feloni: So you went to an all-girls school until
college. How did that prepare you for the world that you’re in
now?

Friedman: Well, definitely an all-girls
environment for me — and it’s different for everyone — it
certainly gave me an enormous amount of confidence to stand up
for myself, to voice my opinion, to ask questions. I was named
the most inquisitive in my high school, which, I’m not so sure it
was actually a compliment, but it was something where I never
felt at all hesitant to ask questions in class. And then I got to
college, and I was always the first one to raise my hand or
whatever. I was always asking questions, and I realized that in
many cases I was actually the only girl in the class asking
questions.

And so I think it didn’t dawn on me how important that was until
I got to college and to a coed environment and I had that
confidence to be able to be a person in the room like everyone
else, to ask questions and answer questions. And I realized that
it gave me an enormous amount of confidence. I didn’t appreciate
the all-girls education until I left, and then I looked back and
said, “Wow, that really did shape me in a way that I’m really
proud of.”

Feloni: Even today you’re looking at its
influence?

Friedman: Yeah, I think so. Because it is a coed
world though, and I was very fortunate because I had an older
brother, and I think that helped also in terms of frankly
creating a little balance and allowing me to understand how to
interact in a coed world as well. But it is something for me,
personally, it made a difference.

Feloni: Yeah, it’s funny — I went to an all-boys
school, and it was just, like, incredibly competitive. And I
think that that’s probably carried over with me, yeah.

Friedman: Yeah. And my brother went to an
all-boys school, and it was incredibly competitive. I mean, the
girls’ school is pretty darn competitive too, but it still was
competitive in the sphere of, you know, you always were kind of
stacking yourself up against other girls, which I think is an
important part of it too.

I also really loved math and science — and the math in
particular, I really did love math — and I feel like that was
probably an area where I particularly excelled because that was
an all-girls atmosphere.

Becoming CEO

Feloni: When you became CEO of Nasdaq last year,
there were a lot of profiles that were focusing almost
exclusively on the fact that you were the first woman in charge
of a global stock exchange and one of the few female leaders on
Wall Street. Did that get annoying, seeing profiles seem to focus
almost entirely on that?

Friedman: I would have to say I wasn’t
surprised, because it is new. I also was very clear that I don’t
really want to be remembered as a woman CEO; I want to be
remembered as a great CEO, and I’m hoping that I’ll be able to
prove myself as someone who warrants that legacy. So it wasn’t
something that I tried to focus on, but it was kind of
inevitable.

I think also what I really underestimated was the impact it had
on some of the younger woman inside of Nasdaq and younger woman
in the industry. So when I go out and talk to people now, I have
younger women come up and tell me how important that was for them
to see that there’s a path all the way to the top. And I just
didn’t realize that was — I didn’t understand that going into the
role that that was going to be part of what this meant to the
community around me. And it makes me really proud, and also
humbled, frankly.

Feloni: So did those conversations kind of
change how you saw your role yourself?

Friedman: No, other than frankly it just puts a
little more pressure on myself to do really well.

Feloni: There have been some things that
you’ve embraced like the
Parity Pledge at Nasdaq — could you explain what that is?

Friedman: There was an organization called the
Parity Pledge, which is a nonprofit organization that looked at
the
Rooney Rule in football. But in this case, what they were
asking for is for companies to sign up and say, “I’m willing to
interview one female candidate for every role at the VP level or
above.” And frankly, believe it or not, that’s just not the
standard practice today. Recruiting firms that you work with
don’t always provide you those candidates, especially if you
don’t ask outright. And internally, you also realize that as you
go up the chain, you’re finding that it’s not as straightforward
as you’d think it would be.

So I asked our leadership team, I said, “Look, we’re not just
going to do this willy-nilly. Is everyone ready to commit to
this?” And they all said yes. And in fact we did have a
recruiting going on at that time, and we didn’t have any women
candidates. We added a woman, and we chose her because she
honestly was by far the best candidate.

So it does make you realize that if you force that into the
interviewing process, it allows you to open your mind, and it
allows you to open up to probably some really great candidates
that you didn’t realize.

Feloni: Do you think that the Parity Pledge is a
way to finally change the culture of Wall Street?

Friedman: You do want to make sure that you have
a diverse organization, because frankly I think there’s tons of
evidence out there that says that it will be ultimately a
better-performing organization. And if you recognize that up
front, then all you have to do is create those practices that
make it so that it perpetuates itself.

And so now we have some amazing women leaders — particularly in
our tech organization — that then open it up to other women
realizing this would be a good place to work, because they can
see women in leadership and these roles. And so it frankly has an
effect all the way down the organization.

Feloni: And in terms of taking the CEO role: So
you were a CFO, you were a COO — when you took the role of CEO,
how did that feel different? What was your first day like?

Friedman: Well, the first thing I would say is
Bob Greifeld, the former CEO, did a spectacular job of
transitioning the role. And I really would say it’s like a
textbook of how to do it well, because we were together for three
years as president and then COO, and we worked very closely
together to give me the autonomy that I needed to be successful
in my role but also prepare me for the next role. He also allowed
me to make some leadership changes in the organization in those
years so that by the time I became CEO I didn’t suddenly have to
make a lot of decisions at the leadership level — in fact, I had
a team.

Feloni: There was a transition phase?

Friedman: It was a very good transition phase.
So that first day was a big day, but it wasn’t a day where I
suddenly had to make a bunch of changes on Day One; I walked
right into the role.

The difference really is how you manage your time. There are just
so many pulls on your time when you become the CEO, because not
only do you have the businesses in your clients, which really is
where you focus when you’re the COO or president, but you have
the investors, and you have Washington or government
organizations, and other stakeholders, and then you have the
media — and you have just a lot of other constituents that you
have to start to manage, and so it means that you have to really
focus a lot on time management. So that’s probably the biggest
change of becoming CEO.

Feloni: 
I interviewed Bob a couple of years ago, and he was saying to
this note of transition that leaders at Nasdaq always
know what their succession plan is going to be. Is that still
a policy?

Friedman: Yeah. We do succession planning every
year, and that’s frankly a very important aspect of the board.

So we presented to the board every year, and we think a lot about
succession planning as part of the hiring decisions, as we think
about development plans, as we do development training for
people, and it’s very much part of the conversation. And it’s not
just a once-a-year exercise — I actually have those conversations
throughout the year with our key leaders. But they always are
thinking that way because they have to make sure that, you know,
this company is bigger than one person. So you have to make sure
that you’re always thinking about how do you create a sustainable
organization for yourself.

Feloni: Bob Greifeld, he was saying how
when he took Nasdaq it was kind of a mess at first, but then he
transformed it and kind of reinvented it as a tech company. Do
you have a mission yourself on some things you want to change or
take into a next step?

Friedman: He definitely came into the
organization at a critical juncture where it was kind of having
an identity crisis in terms of it being a very important equities
market in the United States but going through a lot of regulatory
change that it hadn’t been able to acclimate well to. He turned
it into a very functional and very successful equities market,
and then he was able to grow it to being multi-asset-class and
multinational, and then looking at technology as our core
differentiator and taking that and getting the market tech
business into a state where we really are a differentiated
supplier.

So he did a spectacular job. I think my job now is to take all
that strength — because he really handed over a company that is
in a very strong position — but find new ways to grow and expand
our business with technology being our core.

Competing with the New York Stock Exchange

Friedman with members of Verisign ring the opening bell
in January 2018.
Richard
Drew/AP

Feloni: A topic that’s always being talked about
in markets now is cryptocurrency and crypto exchanges with
Nasdaq. I mean, like, you’ve provided some technology to crypto
exchanges like Gemini, but you’ve still kind of hedged
involvement there. The New York Stock Exchange’s parent company
is building a crypto-trading platform — their parent company,
ICE, they’re working on a trading platform for bitcoin
specifically [this
was launched on Aug. 3]. And with that, is there any danger
that Nasdaq would fall behind on that?

Friedman: So we’ve made a conscious decision to
serve as a technology partner to the crypto markets that exist
today — to help new crypto markets form and evolve through our
technology, as well as to make it so that they really start to
focus on surveillance and monitoring their markets to make sure
that it’s a fair environment. So our technology, our
smart-surveillance technology, is being used by more than one
exchange, including Gemini. And our market technology, our
trading and clearing technologies, are being used by multiple
exchanges as well in the crypto space. And that’s been our first
effort, to make sure that we’re serving the market appropriately
with our technology.

The decision for Nasdaq to become a market itself, our view is
that being the first mover is not necessarily the role that we
want to play. So we’ve made a conscious decision not to be a
first mover in that market. We have been evaluating the potential
to launch a future, but we really want to make sure that if we do
it that it’s based on exchanges where the price formation of
those exchanges can be relied upon, and, therefore, they’re well
surveilled, and they’ve got reliable technology.

So those are some of the things that we’ve considered as we start
to consider whether or not to launch an index with the future.
The second is looking more holistically at becoming an exchange
itself. And I would say that the markets today are in a very
early stage. I think that it’s not a regulated environment. And
so today Nasdaq believes that we’re better served by being a
technology provider to the exchanges than by trying to launch one
ourselves.

Feloni: OK, yeah. So former New York Stock
Exchange President Tom Farley, who served from 2013 to this past
May,
he was recently saying that Nasdaq, which has built a
reputation as an exchange for tech companies — you have Apple,
Facebook, Google — he was arguing that, “Oh, Nasdaq, they’ve
outlived that. It’s not true anymore,” and it would drive him
crazy to hear that. How do you reply to him?

Friedman: Well, first of all, I actually agree
that we are a much more diversified market than just a technology
market. So I was actually pleased to see him say that we’re a
much more evolved market than tech. Last year, Pepsi switched
from the New York Stock Exchange to Nasdaq after 100 years of
listing on the New York Stock Exchange, and they did that because
we’re not just a technology exchange — we actually are an
exchange where innovators of all types come, and they want to be
a part of an ecosystem that supports that innovation and that
ability to continue to drive to the future. But our heritage in
tech is something that we will always be thrilled to have.

Feloni: On that note, he was saying that when he
was running the New York Stock Exchange, he saw its relationship
with Nasdaq like the Hatfields and McCoys, like there was like
some blood feud that he was cognizant of every day — he had
respect, but there was a bitter rivalry that he had to go out and
attack. How do you see it?

Friedman: I mean, certainly it’s a very
competitive situation, and every company has the option to choose
one exchange or another, and it is every week that we do compete
for every IPO. But we tend to really focus on all of the things
that we need to do to make it a great experience for our listed
companies, and at the end of the day, that’s what’s going to make
us win, not so much looking at the person next door.

Feloni: Yeah. So on a separate note — but kind
of related, in terms of competition — you’re a black belt in
taekwondo. How did you get into that?

Friedman: Well, I got into it because my kids
were into it, and then my husband started doing it, and I sat
there and I was watching the classes, thinking, “Why am I sitting
here watching? Why don’t I go do it too?” And so we all started
doing taekwondo.

I really like it because it teaches self-reliance. It’s not
looking at your neighbor and deciding whether you’re better than
them. It’s all about looking at yourself and being the best that
you can be. And to me, I just think those are life lessons that
I’m really happy that my kids have heard and gotten instilled in
them. But I would also argue that it’s very relevant in business
too.

Feloni: How?

Friedman: So you’re focusing on yourself and
being your best self, and usually that means you’re serving your
customer. And if you’re focusing on your mission, and you’re
dedicated to achieving that mission, and that mission is
client-oriented, then you will have success. And it doesn’t
really matter what those companies next to you are doing as long
as you know that you’ve got the right focus and the right
execution and the right relationships with your customers.

And I think that we are really evolving to this client-oriented
company that makes sure that we’re thinking about our clients’
needs today and over the next 10 years, like how are they going
to change? And if we can stay focused on that and not necessarily
get too wrapped up in the competitive landscape, I think we can
be our best self. And I think those are the types of lessons that
I have to say I have learned in taekwondo.

Feloni: So you’ve got a taekwondo mentality, not
“the Hatfields and McCoys.”

Friedman: I think that’s right. So I really like
that. It’s a black-belt mentality for sure.

Taking every day like it’s day one

Feloni: What would you say has been the biggest
challenge that you’ve overcome?

Friedman: I think that making sure that you
don’t hold yourself back.

So there was a moment, and it was really when the kids were
young, where there is an easier road to take than being a working
mother. However, I think that, frankly, at the end of the day,
I’m a better mother from the fact that I did work. My husband and
I, I should say together, were able to find the right balance. My
children have relationships with both of us that are deep and
important and definitely sustainable.

It was hard, and there were moments when I felt overwhelmed, but
there were two things that kept me going. One was my husband, who
was always encouraging me and saying, “Adena, if you don’t
continue to work, you’ll probably go do a whole bunch of
volunteer work, and you’ll be just as stressed out.” So this is
one of those things where I’m a driven person, so I’m going to be
driven either in my career or I’m going to be driven in other
ways. So kind of, “Keep going. You’re going to be great.”

The second was my mom, and she was very good in saying, “You
know, Adena, you are a driven person, and I can tell you that
from my own experience of going from being a stay-at-home mom to
being a working mom that, at the end of the day, you can do both,
and you can do it both successfully.”

And so both of those people were really, really important to me
in getting me through those really challenging years where you
could decide that it’s just too much. Beyond that, once I was
able to get through that and my husband and I found a great
balance together, it’s been a pretty smooth process from there.

Feloni: And how do you personally define
success?

Friedman: Well, I always look at home first,
right? So to me, having a family — a happy family, well-adjusted
kids, kids that are ready to face their own challenges in life
and that are ready for any next step that comes their way — to me
is the most important thing that any person can do.

Then I look at my profession, and I say, “Well, have I achieved
everything that I could have achieved with the skills that I
have? Have I brought my best self to the job every single day,
and do I treat every day as Day One?” Because that to me is the
most important thing that I can do for the success of the
company.

And so those are the things I ask myself frankly every day to
make sure that I’m bringing my best self to my role every day.

Feloni: Yeah. So it’s trying to imagine that
first day every day?

Friedman: It is, because I’ve always said that
complacency is the killer of every great company, and the only
way to overcome complacency is always to wake up every day
saying, “What am I going to do to further the success of this
company today?” Not next week or next month, but today. And if
everyone in the company wakes up every day and says, “What am I
going to do? What am I going to bring to the table that makes
this company even more successful today?” it makes it so that
you’ve got the company that is always looking for change, they’re
always listening to their customers, they’re always finding new
ways to do things, and they’re always innovating. And that is, at
the end of the day, what’s going to be successful. That’s what’s
going to drive Nasdaq’s success.

Feloni: What advice would you give to someone
who wants to have a career like yours?

Friedman: Well, the first thing is: take those
opportunities when they’re given to you, because oftentimes they
are offered up and it’s a matter of you realizing that even if it
feels overwhelming, as I just talked about a minute ago, you can
do it. And think about how to say yes as opposed to why say no.
So I think that if you say yes to your opportunities early on in
your career, and you think about also having some level of goals
as you go through your career — they can change, but at least
always looking forward and saying, “What would I want to do
next?” — that it really helps drive you, and it helps keep you
focused, but it also opens you up to opportunities that you may
not have realized were there.

Feloni: Awesome. Well, thank you so much, Adena.

Friedman: All right. Thank you very much.