How the power players do it - by Fortune senior editor at large Patricia Sellers

Mack and Morgan Stanley: The leader makes the difference

October 13, 2008: 1:18 PM ET

In my 24 years of writing for Fortune, I've focused on profile-writing, steadfast in my view that people, not systems, determine the fates of companies and economies around the globe. George Bush is proof positive (or negative, as the case may be) that the leader makes the difference. Now, as we watch Morgan Stanley (MS) get a lifeline from Mitsubishi UFJ Financial Group (MTU), which is buying a $9 billion stake, and the U.S. Treasury, which helped give the Japanese confidence to make the investment, I'm thinking a lot about the personality of Morgan Stanley's leader, John Mack.

Bear with me as I tout my own writing: The Fortune profile, "The Trials of John Mack", that I wrote in 2003 when he was running Credit Suisse Group's (CS) CSFB, presents as clear a view as any on how this relentless competitor thrives on pressure. I interviewed Treasury Secretary Hank Paulson, who was then competing against Mack as CEO of Goldman Sachs (GS), for that story. "At times when he ought to be down, he looks almost energized," Paulson said about Mack. One of Mack's closest pals, fabled Duke basketball coach Mike Krzyzewski, told me that when Mack seems exhausted, he tells his friend: "Are you an idiot? You're going to kill yourself." Typically, Mack shoots back: "I can see it getting better. I'm doing fine. How are you doing?"

I've kept in touch with Mack and written about him since 2003, through his ouster from CSFB (where he clashed with the board), through his wavering about returning to Morgan Stanley as CEO in 2005 (he'd left the firm in 2001 after 27 years, amidst disagreements with then-CEO Phil Purcell), through Morgan's recent role in the Fannie Mae (FNM) and Freddie Mac (FRE) bailouts, and lately during the market madness. Mack has proved his mettle. Last week, he promised Morgan Stanley employees that the firm would endure "the rumor-a-minute environment," as he calls it. With a little help from Paulson, Morgan and Mack are enduring. The stock is up 62%, to $16 a share, in midday trading. And, most critically, Morgan Stanley's recovery is helping the markets rebound.

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