Book Review: 'Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley'

Blue Blood & Mutiny: The Fight for the Soul of Morgan Stanley by Patricia Beard is one of the best pieces of business history I have read in the last two years. Combine this book with the tome that is House of Morgan and you will possess a pretty firm grasp of Morgan Stanley’s roots. The book was especially interesting to me because I have met many of the characters. This is a wonderful book filled with characters so interesting it is hard to believe this is nonfiction. After dispensing with some early firm history, the book follows the battle that a group of Advisory Directors of Morgan Stanley staged against Phil Purcell to save the culture at Morgan Stanley. It resulted in the triumphant return of John Mack to the cheers of the trading floor. These advisory directors allowed Mack to come back and help Morgan get its "swagger" back.

Blue Blood and Mutiny relates the turmoil occurring over the last decade or so at Morgan Stanley in vivid detail. It portrays former Morgan Stanley Chairman Dick Fisher in a particularly good light. In the book Dick represents Morgan Stanley’s established culture and soul. His death in some ways triggered the Group of Eight to start their revolt in an effort to right the ship and restore the ethical foundation of the firm. When Fisher died, not one member of the firm’s board of directors attended his memorial service. This single act of disrespect triggered a meeting of old line Morgan executives (advisory directors) to form the Group of Eight, a group which eventually displaced Purcell. Some regular employees at Morgan Stanley are also featured in the book. Vikram Pandit, Tarek Abdel-Meguid, John Havens, Joseph Perella, Zoe Cruz, Stephen Crawford, and Stephen Roach are all discussed at length. Their level of participation in the overthrow varies. Their work led to John Mack coming back in to right Morgan Stanley and return it to doing "first class business in a first class way". The book does look down on Fisher and Mack for originally engineering such a terrible merger of the “white shoe” Morgan with the “blue collar” Dean Witter.

The story that this book tells is high drama and it is very difficult to put down. This book is well written and engrossing. Patricia Beard is the niece of Anson Beard, one of the Group of Eight. She clearly had access to the machinations going on during the purge. She stresses in her book that the reason for the mutiny was to reclaim the “soul” of Morgan’s culture. To most skeptics on the street this seems outrageous, since the $330 million loss in the Group’s shareholder value must have been a factor. This book is truly an insider account and well worth reading. Ms. Beard’s book is full of meticulous, inside detail. It is required reading for anyone trying to get inside the head of John Mack and gain insight on how he is going to steer Morgan Stanley through the current turmoil.

I believe that John Mack is a true leader and will continue to lead Morgan Stanley into a league of its own, but the failed merger certainly gained him many critics. Inside the firm, however, there is near universal respect and admiration for Mack.

About the Author:

Patricia Beard is the author of After the Ball and hundreds of national magazine articles. She has been an editor at Elle, Town & Country, and Mirabella. Beard lives in upstate New York.

Comments

[turbo471]

I respectfully disagree with your rave review. As a former Managing Director of MS I thought that the book was as if had been written by the Group of Eight. I only made it through seventy pages.

[thkugrace]

But of course, any book about the culture at Morgan Stanley is going to be viewed as either bias on the side of John Mack or that of Phil Purcell. Having worked for both, I for one witnessed the utter lack of vision of Phil Purcell beyond his one brilliant move in convincing Morgan Stanley to merge. The best move Dean Witter could have done for itself, by far. Dean Witter certainly would have declined considerably over the years since the time of the merger due to their ill-fated, pursuit of soliciting sub-par financial products to an ever more knowledgeable investor class. I still can't understand how John Mack & company could have erred so egregiously