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March 1, 2003

Rebuilding Dreams

Terrorist attacks and the recession left thousands of businesses in dire straits, from modest mom-and-pops to prestigious financial services firms. Many Columbia MBAs felt called to help.


Rebuilding Lower Manhattan is a public undertaking.  The world has watched as the World Trade Center site was methodically cleared, new designs were debated, an architectural team was chosen and the first steps were taken toward redevelopment. Concurrently, another kind of rebuilding has been taking place — in conference rooms and offices, on city blocks and street corners. It is the regeneration of thousands of businesses suffering the combined effects of the terrorist attacks and the recession.

Six hundred firms were housed in the twin towers, and 14,000 small businesses, which employed 370,000 people, were situated in Lower Manhattan. The survival of these jobs and businesses is vital to the economic prosperity of New York City, and Columbia Business School alumni have been integrally involved in rebuilding efforts for every kind of firm, from mom-and-pops to multinationals. With their hard-earned skills and experience, they bring a profound desire to help, as well as a sense of vision that overcomes obstacles and enlarges our sense of what is possible.

From the Inside Out: Remaking an Investment Bank

A boutique securities firm renowned for its research and family-like culture, Keefe Bruyette & Woods Inc. was housed on the 88th and 89th floors of the World Trade Center. On September 11, the firm suffered losses that are nearly unfathomable: of 172 New York–based employees, 67 were killed, including the entire New York trading desk, most of the research department, half of the equity sales team and five of the firm's nine directors. The chairman and co-CEO died, along with the son of co-CEO John Duffy (who is now CEO), as well as the heads of research and fixed income. Those who perished brought in 40 percent of the firm's yearly revenues, and they made up much of the firm's intellectual capital.

Michael Corasaniti ’92, who then helped run the research boutique Graham Fisher Co., lost nearly everyone he knew at Keefe Bruyette, including his friend David Berry, director of research. He fully understood the crisis that the firm, which researches and trades and advises banks and financial services firms, now faced. Keefe Bruyette had to hire new employees and rebuild operations companywide, but the research department, which had lost 16 of 21 analysts, was a special case.

“The research department is the backbone of what this firm is,” Corasaniti explains. “It was vital. I knew they were in big trouble.” That realization, Corasaniti remembers, “was like getting a phone call from God. The first thing I said to my wife was, ‘You know, I'm not a fireman, I'm not a policeman, I'm not a soldier. But I'm an investment professional, and this is one thing I can do.’”

Not long after Corasaniti — who had limited management experience and was only in his mid-30s — called the firm to offer help, he was asked to head the research department. It was not a position he had sought; careerwise, he had finally slowed down. After several rigorous years as a portfolio manager for Neuberger Berman LLC, where he oversaw $3 billion in assets, he was now working 36-hour weeks, teaching security analysis at Columbia Business School and enjoying time with his wife and young son.

But Corasaniti now joined a team driven to rebuild an investment bank with a staff of traumatized survivors, during the worst bear market in memory. “There was no mulling,” he says. “It was like five-dimensional speed chess.”

Competitor firms included Keefe Bruyette in equity offerings to help bring in revenue. Also helpful was the tight job market, which sent plenty of resumes to Corasaniti's desk.  He conducted more than 750 interviews, emphasizing to candidates that the firm called for an enhanced emotional commitment. “You’re coming here out of an act of patriotism, of compassion,” he told them.

The firm had set up a makeshift office in a room set aside by BNP Paribas, but even as more space became available, Corasaniti kept new employees and survivors together in chaotic, cramped quarters. “They had four trading desks for us, and I left all the analysts in the trading room upstairs so that they would integrate and get to know everyone — all the survivors — and deal with the emotional issues. They’d be at a little tiny desk — the phones didn't work, the computers didn't work; it was a very stressful environment — and they just got sucked right into the culture.”

The experience was akin to hazing (Corasaniti jokes that his previous management experience was running his fraternity at Tulane), and it worked. “Sometime in July or August [2002],” he recalls, “I realized that the firm was integrated and communicating at a level that was unlike any place I have ever worked.”

A searing moment came later when, to comply with new securities regulations, the firm constructed a glass wall in the new offices to divide the trading and research departments — “basically, between the survivors and the new people.” In a place where a sense of togetherness made survival possible, physically separating people from one another was a painful experience.

Because of the firm's emotional climate, many management issues typical in turnaround situations never arose. “I didn't have to get buy-in from all the survivors,” Corasaniti explains. “There was no [need for] convincing.”

Along with rebuilding the firm's culture, however, the greatest challenge was dealing with the sheer amount of what had to be done. Rebuilding operations was hugely demanding, Corasaniti says. “Every situation was a queuing problem. You've got all these multivariate issues going on — how do you figure out which thing to do first?”

Corasaniti and his colleagues have seen to it that Keefe Bruyette not only survived but also regained its place in the investing community. David Berry, Corasaniti's predecessor, had set a goal of 10 percent growth for 2002, and Corasaniti met that goal against all odds. The firm has hired 101 people and raised a record amount of capital for companies in 2002. The research department now covers 220 stocks (versus 270 on September 10), and commissions equal those of before 9/11. Keefe Bruyette was rated the best investment boutique in four categories by Institutional Investor in 2002, and it ranked among the leaders in two additional categories.

For Corasaniti, the greatest satisfaction has come from having helped foster the recovery of the survivors. “The reason I came was so that people here could get their lives back together, or some semblance of it, and they have: they come to work every day, they're having babies, their lives are carrying on. The emotional pain never really goes away, but you wouldn't know who is a survivor and who isn't.”

Corasaniti is now focusing on a new objective: “The first phase was make sure the firm is going to survive. The  second phase was make sure it returns to its greatness. The  last phase is let's prove that Wall Street can operate  with integrity and still make money. Let's really drive it home.”

Corasaniti also continues to teach security  analysis at the School.

A framed painting of an American flag in the firm's new offices in midtown Manhattan bears red and white stripes composed of the names of the lost employees. The uneven length of the stripes gives a sense of being torn, but the overall impression is one of strength and pride and of being whole. Corasaniti insists that his success was a shared endeavor that will inevitably remain bittersweet. “If I could've really done it the way I wanted to do it,” he says, “I would just bring everybody back.”

No Job Too Small: Targeted Help for Those Hardest Hit

When Joshua Goldberg ’97 met with the proprietors of a downtown boxing gym in danger of closing its doors, the welcome he received was friendly but cautious. “They said, ‘We’re glad to see you, but no one has ever followed through with us,’” he recalls. As director of business services for ReSTART Central, a nonprofit organization that aids New York City small businesses, Goldberg sympathized with such skepticism. The proprietors had contacted other aid organizations, but no substantial help had ever materialized.

ReSTART Central has followed through on helping more than 1,300 small businesses below 14th Street. With a full-time staff of six and more than 50 volunteers since August 2002, ReSTART is part of CUNY’s Economic Development Corporation (which is led by Carolyn Everett ’95, executive director) and receives funding from the Ernst & Young Foundation, the September 11th Fund and the Empire State Development Corporation, among others. Goldberg, who was hired full-time in August 2002, joined ReSTART in October 2001 as a volunteer researcher, assembling a report on the damage caused by the terrorist attacks. He was also a business advocate, assisting firms with whatever critical needs they faced, from getting loans and grants to tracking down needed photocopiers, computers and office furniture.

Thousands of microbusinesses — the tiny retailers and manufacturers that make New York such a dynamic and diverse city, including flower shops, bodegas, newsstands and pizza parlors — were devastated by September 11. Although many are run by astute proprietors, the scale and scope of the problems are overwhelming: structural and physical damage from the collapse of the twin towers or from having been used for triage and other emergency services; revenue loss for a two-month period during which the “frozen zone” was closed down; inventory loss from looting; and a steep drop in foot traffic and customer base.

“Many of the business owners just don’t have the resources” says Goldberg. “Large, established firms have strategic planning groups. They have groups doing marketing and business development. These small proprietors don’t have a task force that can help them with the rebuilding efforts, because they have to run the store.”

Rebuilding efforts are crucial for New York City, says Donna Childs ’01, president and CEO of Childs Capital, LLC, an economic development firm. “With small businesses employing more workers in the U.S. than the Fortune 500 and contributing more than half of U.S. GNP, we all have a stake in the health and vitality of the small-business sector,” says Childs, whose book Contingency Planning and Disaster Recovery: A Small Business Guide was published in 2002.

Besides bringing new crises, disasters expose and amplify already existing weaknesses. “September 11 was like the tide pulling out, and all the big, ugly rocks were there,” says John Bader ’94, a business development consultant. “People were routinely saying, ‘I'm down 60 percent, 70 percent.’ These were people whose livelihoods were in danger — and not just their livelihoods but also their dreams.”

Bader was living in London in the fall  of 2001, consulting on the launch of a U.K.  joint venture for a New York high-tech firm.  As for so many New Yorkers, September 11  was a day that changed everything; within a month,  he returned to his hometown to help.

“I knew I could help these businesses, because I could look at the situations and help diagnose where they needed help,” Bader explains. Goldberg concurs: “The Columbia experience gave me all the tools to understand how businesses operate and how to solve problems, and the experience of working really hard—that to do good work requires effort. And that there's no substitute for experience and doing.”

Bader began as a volunteer but was soon hired by the city's Economic Development Corporation. He first located business owners displaced by the attacks — “everything from the people who had the jewelry carts on the concourse to the big firms” — so that grants and other aid could be offered to them.

Bader then helped launch Adopt-a-Company, a program that allowed large “sponsor” firms to assist small proprietors in need of everything from clientele to computers. The sole stipulation was that assistance be provided free of charge. “In business school terms,” says Bader, “we were creating a market for services.”

“What struck me,” he says, “was the sheer array of businesses. From Vine restaurant to a husband-and-wife  team who designed Tibetan rugs.” An anonymous donor provided 40 small businesses with new printers. Law firms  offered pro bono services. A bookstore in the Midwest helped a bookstore downtown. A law practice asked all attorneys to buy Administrative  Professionals Day flowers from a needy florist.

Similarly, says Goldberg, “I work with a boxing gym, pizza  parlors, jewelers. I work with an artist who specializes in environmentally sustainable projects. Another ReSTART Central business advocate  is reconstructing the financials for a tailor, because all his files were destroyed.”

ReSTART still welcomes volunteers, and several other alumni are involved. Volunteer Valisha Graves '94 says, “To advise small businesses and help them through the rebuilding process is a very rewarding experience, and it feels good to be able to help in some way.”

Bader arranged for Columbia MBA students to work as volunteers for Adopt-a-Company last summer, whether for several hours a week or as full-time summer interns. “This was direct assistance to where the firms needed it,” he explains. “It was the next best thing to getting money — this was somebody who could get on the phones and find new clients, finish the business plan, help them think in new ways or get them set up with an electronic accounting system.”

The Adopt-a-Company initiative was phased out as the need for emergency assistance began to subside and small businesses turned to organizations that could offer longer-term services. For Bader, who has now returned to his business development consulting practice full-time, the most rewarding aspect of the work was fulfilling so many needs, including his own desire to respond to the attacks.

“The city is already coming back. It's inspiring,” he says. “The chief thing I got out of it was seeing how resilient people are. Because there's thinking it's true, and then there's actually seeing it.”

In retrospect, Bader and Goldberg both have found through their direct work with Lower Manhattan small businesses — and through helping others provide that assistance — that the recompense is the profound but simple satisfaction of applying one's expertise and helping others. “The intrinsic nature of the work is important to me,” says Goldberg. “There's personal satisfaction in building relationships and doing good work.”

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