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CME Group’s Duffy talks leadership in the exchange world

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Modern Money

CME Group Executive Chairman and President Terry Duffy

SmartBrief caught up with CME Group Executive Chairman and President Terry Duffy on the sidelines of the Milken Institute Global Conference. In Part 1 of this two-part interview, Duffy talks about leadership in the exchange industry. In tomorrow’s Part 2, Duffy shares his views on what Dodd-Frank got right, Libor reform and the role Twitter stands to play in the financial markets.

How has leadership in the exchange world evolved during your time in the industry?

We walk a very fine line. What we never want to do is disintermediate our futures commission merchants community. … When you are working with a big bank and you are working with their clients, you must work together. I think that is different today than it has ever been in the history of our business. An exchange used to be just four walls for gathering price. Now you have to go out and cultivate clients. We do that via partnerships with our FCMs and I think it is the most important thing we do.

CME Group has a presence in around 150 countries. How do you manage such a global business?

We all have operational risk. Most of it is in technology in today’s world. Obviously you aren’t sending people all over 150 countries. You are deploying your technology, building out telecommunications, making infrastructure investment and then cultivating clients in different parts of the world. You have to differentiate yourself. You have to have a world-class trading engine, a world-class clearinghouse and world-class risk management procedures and protocols.

Here at the Global Conference, we are surrounded by leaders from all walks of business. What is the best piece of leadership advice that you can offer?

The best advice I’ve got on leadership is something I’ve learned on my own, which is discipline. You need to have discipline in order to be successful. I truly live by this: If you don’t have an exit strategy before you enter into a trade, you will always fail. And I look at business the same way I look at trading. You must have an exit strategy before you deploy a strategy in your business. A lot of things don’t work and a lot of people don’t have the discipline to admit that they are wrong. That is the hardest thing for anybody to do. It’s hard for all of us. I am not afraid to do that and I think that is one of the things that has helped me throughout my career, whether it has been in trading or management.