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Episode 213: Exploring Change Management, Economics and Capitalism with Curt Bradbury

February 08, 2023  |  By Matt Waller

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This week on the podcast Matt sits down with Arkansas Business Hall of Fame Inductee Curt Bradbury, Chief Operating Officer of Stephens, Inc. Curt begins the episode by walking through the beginning of his career working with Jack Stephens and how he was given the opportunity to turn around a struggling bank at the age of 35. Based upon that experience, Curt highlights the importance of change management and he walks through how he was able to turn around a struggling Worthen Bank and lead it to to an acquisition and eventual merger into Bank of America. He then discusses the history of Stephens Inc., his background in economics and history and his views on the ethical underpinning of capitalism. 

Episode Transcript

Curt Bradbury  0:00  
What one does for a living is part of one's personal fulfillment. A very smart and successful businessman I knew from New Orleans once told me, you got to show up.

Matt Waller  0:14  
Excellence, professionalism, innovation and collegiality. These are the values the Sam M. Walton College of Business explores in education, business and the lives of people we meet every day. I'm Matt Waller, Dean of the Walton College and welcome to the be epic podcast. I have with me today. Curt Bradbury, Chief Operating Officer of Stephens Inc. He's also a director of Stephens Inc. Curt is an alum of the Walton College he got his undergraduate degree in finance here, and a master's in economics. But most importantly, and congratulations Curt, on being inducted into the Arkansas Business Hall of Fame. Curt will be at our event, our big annual event in Little Rock in February to be inducted into the Arkansas Business Hall of Fame, which is quite a remarkable group of people to join. We started this in 1999 and but people that are inducted into this include people like William Dillard, Jack Stephens, Sam Walton, Joe Ford, Don Tyson, JB Hunt, many, many amazing leaders. And of course, fairly recently, 2019, we had Warren Stephens inducted, and it just occurred to me, Curt, you may be this Stephens may have more people in the Arkansas Business Hall of Fame than any company because Jack Stephens Warren Stephens and now you?

Curt Bradbury  1:54  
Well, that's quite an honor for our firm. If that's, that's correct. And it is in any event, if

Matt Waller  2:01  
I think it is, I think that's right. And it is it's it's a great group, and congratulations on on that induction, and to your tremendous accomplishments in business.

Curt Bradbury  2:16  
Thank you, Matt. You've been you've been a supporter of mine for a long time now and I've been a supporter of yours.

Matt Waller  2:27  

Curt Bradbury  2:28  
Quite a while now. And it's been a pleasure to work with you and, and certainly I look forward to working through all the all the Arkansas Business Hall of Fame preparation with you.

Matt Waller  2:43  
Well, you know, Curt, you are a man who really notes and celebrates the accomplishments of mankind in business. Because it's a great way to advance society, business advances society, in so many ways. And I know in your career, one of the, you know, you've done a number of things that have really elevated your stature in business, but I'd love to hear, of course, I'm familiar with the Worthen story. We could talk about that. But you were a young man, when all of a sudden you were plopped in the middle of Worthen Bank and asked to lead it. Would you mind talking a little bit about that?

Curt Bradbury  3:33  
You know, the preface to all that really, is that that happened, all that happened when I've been with Stephens for 13 years, now, 50. And I had worked closely with Jack Stephens, who was ahead of his time on many, many issues with respect to investments particularly and he felt that there was a at that time there was a interstate banking prohibition. In other words, banks couldn't operate across state lines, and he felt like that would ultimately be repealed. And at that time, you know, let's say the early 70s, it was that was a heresy, almost to say that bank could operate across state lines. So he began taking 4.9% positions in a variety of regional banks throughout the south and southeast, basically. And people would ask him what his theory was about owning these banks. And he would say, well, you know, the McFadden Act, which restricted interstate banking would have to be repealed at some point. And I don't know what's going to happen, he would say, but at least when that happens, our friends will know each other meaning the CEOs of all these banks, and he thought that that would be a good thing. So he when I haf first started here, he needed somebody to help him monitor the financial data in those banks and their performance and colleagues in the corporate finance department, when I first came in thought that sounded a little, a little bit like grunt work. And so it felt to me the newest, the newest guy, and probably in 73, or 74. And so I began to work with Jack on his investments in all these banks. And you know, there was some really, there was some stars in that cadre of banks that we, that we had investments in he will call it a North Carolina National Bank now, Bank of America, and Hootie Johnson at Bankers Trust of South Carolina, several of the better performers in Texas, Union Planners in Memphis, great bankers running a lot of these banks. So actually, at a very young age, I got to know a lot of these bankers so and got to watch them operate and run their bank. So when Worthen had its problems, and Jack and and Stephens family owned 15% of it. And it was a passive investment. And when when it had trouble. He naturally in the family was naturally solicited to recapitalize it because of the financial strength and their prior interest in it. And basically, he said that he would, but part of the deal would be that I would go to Worthen as an officer, and that happened basically overnight. And I was I went home and told my wife, who knew nothing about what I was getting ready to do, you know, that I left Stephens and gone to Worthen. And so I think people were surprised about the choice. But but in fact, I had worked with Jack on on banks and banking for a long time, I knew how he felt about the management of the banks, I knew philosophies of his about, about the banking business. And so it was sort of a natural, a natural reaction for him to want me to be involved in the Worthen situation.

Matt Waller  7:45  
Turning around a bank like that, or any organization is very difficult. 

Curt Bradbury  7:52  
Yeah, it is. 

Matt Waller  7:54  
And how old were you at the time?

Curt Bradbury  7:57  
I was 35 the day I walked in there.

Matt Waller  8:02  
Yeah. So that's, that's a lot of responsibility for turn turnaround at the age of 35. How did you think about managing that turnaround, leading that turnaround?

Curt Bradbury  8:15  
Well, with all due respect to everybody involved on the other side, it was clear to me that the bank needed a fairly radical change in its culture and many banks at that time did, for example, the cost structure of the bank was way too high. And, and that, you know, that was more of a cultural thing than it was a failure of operations, it was just an attitude. And so one of the first things we began to do was cut costs. And, of course, we had the capital issues, from the huge and sort of precipitous loss of capital. And we had to start about raising capital to put the balance sheet back in shape and, and then we had to change the culture on lending. And so I think, to me, it was, and again, as I say, all due respect to the people were there at the time, I just came in with a different point of view. And so the, I think, the most difficult thing is to persist in that point of view, change is difficult, people, people resist change. When you know, big data side, they really know that they really shouldn't resist it and, and, but the change is difficult to manage. And, and so, you know, I was insisting on a change in the culture and it was a it, I must say, to do that it takes a good bit of stubbornness on on the change agents part. Because what happens is the resistance says, they basically takes the form of, well, you're wrong about this. And in my case, and you don't know anything about banking, and the, in the, the response to that is, well, I might be wrong. But we got to do this, and we're gonna do this and and my wife thinks that it required stubbornness that I was quite well suited to, to see all that through and and apply that. But I think it just you got to lay out, you got to understand there'll be resistance to change, except that you've got to lay out a plan, a change in culture, and then be stubborn about implementing it. And after a while, you get a few cultural successes under your belt, then people begin to believe and that's one of the things that happened at Worthen is we had a great 10 year run really after, after 85 when the problems started. But it required laying out a plan stubbornly implementing the plan. And convincing people that change was good.

Matt Waller  11:29  
Well, you and you were wildly successful in this change that you implemented, and the performance. Would you mind sharing a little bit about the results?

Curt Bradbury  11:44  
Well, we, you know, the there was tremendous losses, right at right at first, and we actually turned the losses around, in about it took about three or four years to turn the losses around into profits. And I, you know, I was not overly concerned about the fact that it was taking three or four years. I know, probably, there were others, and shareholders that were concerned about that. But we had, we had a good bit of credit losses to absorb. And it took the earnings of the cash flow of those three or four years, we're making money, but but then writing the loans off, and, and net income, then being zero, it took three or four years to absorb those losses through the earnings that we make. But the way I, as you know, I'm a capitalist and the way, the way I like to describe the success is the stock had been the worthless, it was a publicly traded stock on the old American Stock Exchange, the stock had been in the 30s and 20s and 30s for a while. And then when the problems happened, it went to four and there was a recapitalisation stock offering it around four. And so so that was in 85. So then in as we rebuilt, the earnings and, and the expanded, actually began to make acquisitions in the, in the bank, as we did that the stock went back up into the 20s. And then and then, when the banking industry was in a consolidation at the time, big banks were buying small banks, and we we were approached by several of those banks. And the one that actually won the, the flirting contest was Boatmen's Bank of St. Louis, St. Louis, and that trade happened at 30, 33 or 35 maybe. So it was from four to 35 when that trade happened, and then in two years time, the Nation's Bank, North Carolina National in the nation's bank, was it become Bank of America bought Boatmen's and then they paid 50 but in translating to owe more than stock they paid 55 for Boatmen so that stock had gone from 40 to 55. And then if you held your nation's bank Bank America stock it went, it doubled from 55 so basically it was a four to 100 sort of trip. If you held your your Bank of America stock through to the end.

Matt Waller  15:00  
What a what a journey. That is. Congratulations. That's amazing. Now, you've been Chief Operating Officer of Stephens since 1995, I believe. 

Curt Bradbury  15:12  
That's right. 

Matt Waller  15:14  
And that's a long time. 28 years to be running. Set. And of course, Stephens has changed so much over the years and grown so much. But, you know, and for those listening, I mean, I think we all know Stephens is involved in investment banking, and wealth management, there's so many things that Stephens does now research, sales and trading, public finance, insurance, private capital, family office services, and, and of course, it's a, it's a global company now. So you've seen a lot of change over the past 28 years, and in your position as Chief Operating Officer, I mean, it must just be a constant, constant battle to keep up with all of this growth and expansion.

Curt Bradbury  16:11  
Well, we have a great team. You know, the, there is a tremendous organization here that that manages all those different businesses. You mentioned at the outset, Jack and Warren. And what and Witt Stephens, who was Jack's brother said before, if I've been successful at all, it's because I've stood on the shoulders of those giants that created a hell of a base level company here. And of course, companies have transitions and they have growth. And there was a transition. When Jack Stevens joined Witt after he got out after Jack got out of the Naval Academy. There was a transition when Warren became CEO of the company in 1989. And, and Warren has built from 1989, to continue to build the base. Things were different for Jack, you know, Jack, at one approach was looking at things and the company was in an in a way in its infancy in and when Jack came in, and, and Jack expanded it from the bond business into a lot of other things. And Warren continued that expansion. And soon Warren's kids already work here. And that I see that as sort of another transition. But yeah, it's under Warren's leadership since 89. It's grown tremendously. It's it's diverse. It has a great reputation, in business everywhere, of competence and integrity. And so, and it has a great organization. And so we have great people working here. And it's a pleasure to work with them and give them a challenge. They accepted and accomplish it.

Matt Waller  18:29  
I remember, several years ago, I'd already met you, but it was the first time I'd heard you lecture. And so although for those listening, I mean, we all know you're a successful business person. But most listeners wouldn't know that you have a scholarly side to you, necessarily. And I know the first time we had I think it may have been it was the first time I saw you speak to our students. I think we had were in an auditorium that had about 300 students. And you were talking about economics and capitalism. But I remember the thing that struck me and I don't remember the particular authors you read, but I believe it was Hyack and John Locke and Basquiat and some others, and you you pulled out books, and you would read a quote from the book or maybe your notes. And again, this is going back several years. But you you you made a an argument, a lecture around capitalism and economics that I thought it was absolutely phenomenal. But most business people that I have met, even if they're familiar with economics wouldn't have it. experience reading some of these tremendous authors.

Curt Bradbury  20:04  
Well, of course, I started writing them. You mentioned I have a master's degree in economics from from University of Arkansas. I started reading those guys when I was there. That's one of my favorite courses and getting a master's degree of history was his history of economic thought, thought the old Professor Don Market, who's gone now, but

What a great name for economics

Interesting thing about Dr. Markets. Philosophy is he was a market oriented capitalist. And so, but any rate, I have thought, a lot. I have thought a lot over the years about the moral and ethical underpinning of capitalism, which I think exists in which I think is substantial. I actually worked out in my own mind and heart that that premise, over the years, and I'm obviously disturbed now to see capitalism, under fire for being a heartless system for being for being somehow now we've got over 50% of the students or young people in the country think it's a corrupt system or something like that. And the fact of the matter, I think is, is that it is the most moral and ethical system of economic organization that that exists. Because it's based on freedom, because it's based on personal freedom, and one of the myths about capitalism. And, you know, Matt, we've talked about this live, and I want to myths about capitalism, I feel is that the myth is that it's about money, and greed and wealth. And the fact is, it's not, that's not what it's about, it's about human achievement, it is a system that permits and encourages human achievement, with with more direct freedom to accomplish that than any other system that you can, that you can think of so, so when you think about the moral and ethical framework, then you have to say, which system provides the most autonomy for each individual, to affect his or her own creativity? And yes, to be rewarded for that, and, and, you know, to make money, and that all that all has a way of working out, in my opinion, than coercive systems as well, like socialism. There's much more coercion coercion involved, the state is the boss. And my, I'm just distraught really at how, what a great, tremendous misunderstanding there is, of the ethical underpinnings of capitalism as we discuss it today. And, and the myths that are promoted about it. In arguing for the, for the, for the opposite. But, you know, one of the things about capitalism that I think is it people miss too is there's a referendum vote that goes on every day, in in the world, in the in commerce. And that's the price system. So the price system is a referendum vote of everybody in the world making minut little decisions about what they want to do with their own the product of their own human achievement. And that referendum vote needs to be permitted. It doesn't need to you don't need to be coerced into what, how you vote with, with the fruits of your labor in a market system, the market needs to work. And so referendum votes are the very description of freedom. personal autonomy, which is maximized under a capitalistic free enterprise system, is the very essence of freedom. What could be more? What could be more important than personal autonomy? And so I just, you know, when I listen to on TV, and I hear arguments that that are thinly disguised, socialistic arguments, communistic arguments. It just is so disturbing to see that, you know, it's like, in my you know, and I know the other side feels the other way. And I got it. But but it's like, I think that this is the most moral and ethical system there is. And the other side thinks it's the most corrupt. And that's where we are today. But whatever the case, I tell my kids is for them to work out. At my age, and, but but it's, it's very disturbing, because I worked it out for myself in my own heart a long time ago.

Matt Waller  25:42  
Yeah, I think you're right. A lot of people don't think through these ideas carefully. And they kind of go along with what sounds or feels good.

Curt Bradbury  25:52  
Yeah, yeah. And it's always, you know, one of the things one of the things about what sounds or feels good is that, you know, I, my brother's keeper, do the other do I help the other? Well of course, of course, there's nothing in the capitalistic free enterprise system that says, you don't do that. I mean, Milton Friedman, you know, one of the godfathers of capitalism, free markets and whatnot, said, of course, there's there's there's charitable impulses in in people that seek to be to achieve and be rewarded for their achievements. Of course, there is and of course, there's room for a safety net. Of course there is, nobody says there isn't, even Friedman said that. So, I think that we, I don't know, I don't know how to have that debate in a more in a fairer framework than we're having it right now. Because I think both sides get distorted tremendously. By the way, one of the, one of the authors that you'll recall that I quoted in those lectures that I gave was Emerson, Roy Emerson. And, of course, he, he wrote extensively about self reliance titled A visit book of his essays. And I wish I wish it were required reading, I know, and it would suit me that if Karl Marx were required reading, you know, I think it should be but but Emerson wrote about self reliance. And, and it's one step, you know, he was in the mid 1800s. And, you know, you know, the, yes, people living and writing about capitalism, then but it's certainly much, much more developed economic system now, than was then. But he saw that what, what was necessary for growth, and for widespread prosperity for each person, to be self reliant, and to be autonomous unto themselves. And, and he's, he's he saw that and wrote about it early and it was as if he were writing about in writing about self reliance, he was writing about a free market economy.

Matt Waller  28:17  
On behalf of the Sam M. Walton College of Business, I want to thank everyone for spending time with us for another engaging conversation. You can subscribe by going to your favorite podcast service and searching. be epic. B E E P I  C.

Matt WallerMatthew A. Waller is the dean of the Sam M. Walton College of Business, Sam M. Walton Leadership Chair and professor of supply chain management. He is also the host for the Be EPIC Podcast for Walton College.


Walton College's EPIC values -- Excellence, Professionalism, Innovation and Collegiality -- are the heart of Dean Waller’s podcast. Since the beginning of the series, Waller has interviewed business professionals, industry experts, CEOs and Walton College students to bring listeners first-hand accounts directly from the entrepreneurial world.


Waller is an SEC Academic Leadership Fellow and coauthor of “The Definitive Guide to Inventory Management: Principles and Strategies for the Efficient Flow of Inventory across the Supply Chain,” published by Pearson Education. He is the former co-editor-in-chief of Journal of Business Logistics. His opinion pieces have appeared in Wall Street Journal Asia and Financial Times.


Waller received an M.S. and Ph.D. from Pennsylvania State University and a B.S.B.A., summa cum laude, from the University of Missouri.