We’d rather go deeper into the subject than look for opportunities: RK Rangan

What is the extent of services delivered by Nomura?
We represent the footprint of our investment bank or our global markets firm. Starting from investment banking, we have a team of analyst and associates who work with global bankers on market comparisons, supporting deal preparations and working on pitches.

The second aspect, again very frontline, is the global markets platform that we have starting, from trade ideas to risk management to quantitative analytics, it is all done here. Again we represent or support the entire firm, it’s not about focus on Europe or US or Tokyo. So we do work for the entire firm globally. The other large divisions represented are all facts of risk management, credit market, quantitative, then corporate big functions such as technology is huge.

We represent all capabilities in technology trading functionalities to corporate technology to running backroom and other things. Again finance is a big function; starting from financial control, making the regulatory, closing the books and reporting financial numbers. Then there is operations starting from booking the trade to reconciling, talking to the counter parties. So, in short, it represents the entire footprint starting from frontline functions to strategic to reporting and quantitative functions.

Any new services in the pipeline?
The industry is quite complex and the complexities get more challenging when markets are not doing so well. Globally, with the occurrence of the recent issues, you have to find innovative ways of being more efficient in processing the trade and managing the risk. For us the real focus is how quickly you could become an expert so that you can deepen the extent of work. Its not about starting a new service, but about how to penetrate in the service to doing end-to-end and doing more value-added analysis and reporting.

On a top line basis I think we do represent all the services, but our continued focus is to strengthen our domain, go deeper into the subject versus looking for opportunities.

The global capability centre was earlier a part of Lehman Brothers and now a part of Nomura, what kind of changes did you undergo?
To begin with the colour of the logo has changed, Lehman used to be green and Nomura is red. As you know the primary objective of Nomura to acquire the Lehman assets in Asia and Europe was to make it a Tier 1 global investment bank.

Nomura is a Japanese company. Its the most dominant brand in Japan and the Lehman assets have been acquired to build businesses internationally which is in US, Europe. So the organisations that have come together are very balanced. You will observe several business leaders in international businesses are ex-Lehman people, so they are driving the businesses.

I would say that the integration has been extremely smooth and its obvious when you bring two organisational cultures together, some amount of tweaking is expected, but by and large it has exceeded everyone’s expectations.

Also the world economy is coming out of recession and there is a huge focus within Nomura to be a dominant player, everyone is focused on getting clients, building businesses, enhancing the top line, to be efficient in whatever they do, so when everyone is focussed on ambition that builds a culture. If we were in a stable situation, there may have been political or emotional outbursts when the two organizations came together, but since everyone was focused on the ambition to build this, we didn’t see any clash. Now we call it the new Nomura, not ex-Lehman or heritage Nomura, we all work for new Nomura.

There was a complete culture shift due to this acquisition. How have the HR policies reflected there?
A lot of the Lehman policies were adapted as they were global in nature. Nomura is very dominant and successful in Japan and they were relatively small in the other regions. I would say we have taken the best of both company policies, to suit a global organisation so that no region sees a shift in compensation philosophy or the way you are recognised or the way you are titled or the way you can be mobile within the company.

How did you go about training people? Could you also tell us the kind of investments you had made to retrain people?
This was definitely a challenge. We had a new set of technology, as something came from Lehman and something from Nomura and we had to build the two technologies. The fundamentals of
today’s business is technology in securities business so we had to bring the best of the worlds and right processes around it and retrain people so it was a huge investment to retrain.

When we were integrating we had 500 employees globally even training the frontline people and building technologies so that helped us more to gain knowledge and importantly build relationships because we had more Nomura people whom we didn’t know earlier.

The acquisition took place in October two years ago, the real business started sometime in January, so those four months were spent in intense training. We would have spent six months of training and investment for the entire organisation, so it was a huge investment for 3000 people to go through six months of training.

What were the advantages and disadvantages of the acquisition from Lehman?
There were more advantages. I would say it has been a blessing in disguise, we didn’t do anything special to bring these two organisations together. This company got an opportunity to contribute in the build-up stage, by virtue of that there is a stronger and credible dependency of this entity of the global units. And the most significant which makes us more sustainable than before is the quality of the work.

Clearly in terms of disadvantage, we started off with a disadvantage, but two years later people know Nomura. We are not an FMCG for a household to know, so we started off with that big advantage
because Lehman was big. That was one anxiety as to how do we retain people. But all the other factors sort of overtook the rest and today its a very well know brand and I am sure you can indulge that.