- Title: Living Up to Your Reputation and Adding Value
- Written by: Oscar Tollast and Mirabelle Morah
- Description: Eugene Ludwig, founder and CEO of Promontory Financial Group shares insight on building his reputation and the importance of implementing financial advice
- This feature story was originally written for Salzburg Global Seminar
“You build up your reputation, whether it’s in the advisory space or another space by working hard, trying to know what you’re saying [and] adding value,” said Eugene “Gene” Ludwig, founder of Promontory Financial Group, sitting in Max Reinhardt’s former office at Schloss Leopoldskron.
Ludwig founded Promontory Financial Group in 2001, a global consulting firm which advises clients on a variety of financial services matters. Being reputed as a trusted advisor to many of the world’s leading financial companies, including serving as U.S. President Clinton administration’s point person on the successful policy response to the credit crunch of the early 1990s, Ludwig has grown to be highly knowledgeable in matters of finance.
Beginning his career as a banking lawyer doing transactional work, he later worked as a financial regulator starting in 1973. Building a reputation as a financial adviser is “a little like a trademark,” Ludwig said. According to him, many spend a lot of time looking for a symbol or a set of words that would make a brand or entity look good.
“That part of it really doesn’t matter very much,” Ludwig explained. “What matters is what people learn to expect from the symbol or the words, in terms of the value-added or not [added] to them. Good marks are ones that they like, and they believe add value, whether it’s a drink, a cosmetic [product] or a bank. So, marks are hard to build and easy to ruin. Your own business or your own persona is very much the same thing.”
In Ludwig’s case, building his reputation involved having empathy toward people “who have difficult circumstances, trying to figure out ways they can solve their problems in ethical and long term solutions.”
One of his core principles includes practicality. Growing up in a country town where his father was a doctor, planting tomatoes with his bare hands in the soil taught Ludwig “the importance of the application of theory to practice.”
Channeling the knowledge to the world of finance, when giving advice and ideas to entities, Ludwig noted the implementation of ideas is often “vastly more important than the idea itself.” Previously, he thought by giving large entities advice on their financial issues, they would go ahead and implement the ideas themselves and the problem would be solved.
“I realized after a time that the implementation of the advice was every bit as important as the advice itself and that regulators were uneven in their implementation skills,” Ludwig said. “So I’ve added to the group and indeed even worked with regulators to become more expert at implementing the advice they get.”
When a big diagnostic and advisory exercise reaches a conclusion, Ludwig often tells CEOs and boards what they’ve purchased from Promontory “has no value at all.” He said, “What I mean by that is that unless it’s implemented… they haven’t done very much.”
Ludwig was at Schloss Leopoldskron to co-chair the latest program of the Salzburg Global Finance Forum: Financial Services in the 2020s: Tectonic Shifts and New Landscapes. Among other topics, the response of the mid-noughties financial crisis and threat of another looming recession surfaced.
“Post the 2007 euphemistically called ‘great recession,’ regulators and governments did a lot of great things in a very difficult situation and reacted vastly better than we reacted after the 1929 stock market crash,” said Ludwig.
The profound effects of “both that crisis and the dramatic changes that are going on in our society” are driven at large by technology, indicated Ludwig. He recognized technology has brought about a rapid period of positive growth and change in the society, but these changes have also come with their own challenges, such as climate change and displaced populations. Nonetheless, Ludwig remained hopeful work at the Salzburg Global Finance Forum could help formulate new solutions.
“One of the things I think that is outstanding about the Salzburg Global [Finance] Forum [is] it gets together – at least in my experience in the last couple of days – people with different points of view, with certain amounts of expertise and global backgrounds. And those attributes taken together can, if organized correctly, add an uncommon amount of value to ultimately understanding a problem and then figuring out how to take action.”
The Salzburg Global Seminar program, Financial Services in the 2020s: Tectonic Shifts and New Landscapes, is part of the multi-year Salzburg Global Finance Forum. This year’s program is being held in partnership with JP Morgan Chase & Co.and Oliver Wyman. The sponsors are Cleary Gottlieb, Davis Polk & Wardwell LLP, Raiffeisen. The co-sponsors are Bearing Point, European Banking Federation, Dynex Capital Inc., and State Street.