Leading From The C-Suite: David Hait of OptionMetrics On Five Things You Need To Be A Highly Effective C-Suite Executive

An Interview With Doug Noll

Sense of humor — Sometimes things just don’t go perfectly according to plan, and it’s helpful once in a while to be able to shrug and laugh it off (but not too often!) The job becomes a lot easier when you can do it with a good attitude and a light heart. And every company has its craziness!

As part of our series called “Five Things You Need To Be A Highly Effective C-Suite Executive,” we had the pleasure of interviewing David Hait, Ph.D., CEO of OptionMetrics.

While options today are used by sophisticated investors and savvy advisors alike to assess and trade volatility, and gamma-sensitive strategies and terms like “volatility” and “VIX” are now common — it was a leap of faith 25 years ago for David Hait, Ph.D., a former VP of the Fixed Income Research Group, Paine Webber, and instructor on derivatives at J.P. Morgan, to start OptionMetrics, an options data and analytics company, when options were viewed by many with skepticism or considered a “niche” investment. David is an engineer and financial economist with 25+ years of experience in applied quantitative derivative research and technology.

Today, OptionMetrics is a leading provider of options, equities, ETFs, and futures data and analytics, supplying options data for U.S., Europe, Asia, Canada, and global indices, used by hundreds of institutions, including more than half of the top 50 business schools in the world, and by thousands of professionals to monitor risk exposure. Leading portfolio managers, equity options traders, and quantitative researchers rely on OptionMetrics for extensive, high-quality data to construct and test investment strategies, perform empirical research, and accurately assess risk.

Thank you so much for joining us in this interview series. Before we dive into our discussion, our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?

In 1992, while consulting on derivatives for J.P. Morgan and going to grad school at NYU, after working full-time at Paine Webber as a VP in the Fixed Income Research Group, I came to the realization that while theoretical research and new mathematical models were emerging, there was little empirical research on which to base them; while there was a lot of historical data available on stock prices, there was very little or none available on option prices. That fact hindered not just me, but anyone who wanted to research these markets and see how they operate. I had been spending endless hours scrubbing, preparing, and organizing options data, and as a result, I kept thinking how useful it would be to have a readily accessible source of organized, clean, and easy-to-use options data for financial research. In 1999, I founded OptionMetrics to provide accurate, research-grade options data and analytics tools to allow investors and researchers to more efficiently analyze markets and determine risk.

The thing that we brought to the game was the accuracy and completeness of the data. A lot of the other data providers who had this data didn’t really focus or concentrate on that. We, instead, took the view that the data was intended for research, and having done research in the financial markets myself, I knew what researchers and investors were looking for.

Can you share the most interesting story that happened to you since you started your career?

Truthfully, I am fascinated that my company has gone from one person to 65 employees, and from no revenue when we started, to many millions of dollars in revenue annually. When I started OptionMetrics, options were viewed by many financial players as a more specialized investment instrument. Since then, interest has broadened significantly. Although I anticipated interest was growing, I didn’t realize it would grow as fast as it has over 25 years, and I am gratified to have played no small part in growing it on the academic, institutional, and retail sides.

Volatility measurement via the VIX index from the CBOE (per Investopedia: VIX is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index) had only recently come out and people were starting to talk about it. The VIX soon became viewed as a “fear gauge” showing how optimistic or pessimistic traders are feeling. I used to say that our goal would be to someday see volatility measures become so important that they would be shown running across CNBC in crawls at the bottom of the screen along with the stock price changes. And now, here we are, with the VIX quoted by the press regularly. With our products making options data and volatility measures more accessible, people were able to understand more about the options markets, and once analysts and academics got our data, they were able to better study the dynamics of these markets. So, we helped to make options and volatility investments more mainstream.

Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?

Have a good time, all the time — just kidding! Seriously, I would say, don’t discount the value of good luck — and when it comes your way, make sure to recognize it and take advantage of it. I’ve been very lucky with OptionMetrics, and I’ve always tried not to squander that good fortune. I would advise young would-be entrepreneurs that if you have an idea that you believe in, or if you see an opportunity as it comes up, don’t be afraid to investigate it and pursue it, and do the best you can. You may discover that luck will find you as well — by sending you the right customers and the right staff. Even something as small as making the time to meet someone you can learn something from, or building and retaining a good network of contacts, just might be important down the road. For example, I knew people who were engineers back when I was in working in engineering, and later found out that they also had gotten into finance. They became renewed contacts for me and for OptionMetrics.

Is there a particular book that made a significant impact on your leadership style? Can you share a story or an example of that?

Well, I really liked many of the ideas in “Atlas Shrugged” by Ayn Rand — particularly the idea that the “doers” and the “creators” in society are to be respected and valued over “talkers” and the “followers.” I tend to be a radical free marketeer — I think we need to respect the people who are the driving forces in the economy and to allow them to profit from the services they provide to society. In the words of her character, John Galt, “Get the hell out of my way!”

Look at Elon Musk, for example. Whatever you think of his personal style, SpaceX is an enterprise that can land a rocket on a moving platform in the middle of a turbulent ocean! That’s an incredible achievement, and it was accomplished by hiring skilled people and allowing them to take risk.

I was raised in a time where the prevailing belief was that you were supposed to find a good, stable company and stay with them for your whole career. Becoming “The Organization Man” was the American dream; it was certainly what my father had believed in and what I was taught. When I was 25 years old, I was an engineer at AT&T and I figured that this would be my career for the foreseeable future. At that time, AT&T was building high-speed computer modems, and I was assigned to work specifically on the receiver section. I remember thinking that if I stayed with the company, I could maybe become the world’s expert on the receiver section of high-speed analog modems. And suddenly, that future seemed very limiting and not really what I wanted to aspire to. I could see that Wall Street was starting to get more into newer technologies, bringing in UNIX workstations and looking for engineers who could work on this. And an opportunity presented itself for me to join a group of independent consultants on Wall Street. My knowledge of UNIX would have allowed me to double my annual income, but as a consultant, there was risk involved, because neither the work nor the pay was guaranteed. I remember that being a major turning point in my life, when I said to myself, “What’s the worst that could happen? If it doesn’t work out, I could go back to being an engineer.” I took the offer, and that was what really changed the way I looked at my career.

What do you think makes your company stand out? Can you share a story?

OptionMetrics’ high-quality data is clean, easy to use, and accessible. During grad school, I did academic research on the markets, and like, for example, biology and chemistry research, there are some rigid requirements on the quality of the data. As a doctoral student, I was trained to be careful in empirical work to eliminate any potential sources of error. At NYU, like at most graduate schools, quite a bit of data preparation work is done by graduate students (for free!) before the analysis and testing of theories can begin.

I knew Wall Street was becoming interested in new types of research — with larger firms becoming much more quantitative, forming sophisticated research groups to do what we called “rocket science” research in derivatives. I realized that they needed to do it right and have the right kind of data to test their ideas. So, this set the path for me to deliver quality research data and analytics. In some sense, OptionMetrics would act as the “graduate assistants,” sophisticated enough to give them the numbers that they needed in a form they needed, so they could do instructive and productive research. We are basically taking on the task of doing the prep work that needs to be done to make the options data useful.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

1. Patience — This is not necessarily your typical entrepreneur’s trait. For some people this can be viewed as a detriment, but I would rather take the time to do things right. Being patient allows me to foster long relationships; having the long view means you’re thinking beyond just what is needed right now. I was a bootstrapper and initially funded this company with a few outside angels and my own money, and this allowed me to proceed at my own pace until I was able to grow it to where I wanted to go.
2. Thoroughness — I like to understand all aspects of the business — in the beginning I was programmer, coder, quant, server tech, finance guy. These days, I don’t want to interfere with the work of my employees, but I still want to know what’s going on and what they are doing and learning — mostly because of my intellectual curiosity and my desire to improve the business. I am always looking at new technologies and new financial models, constantly reading and understanding how to make operations better. I still geek out a lot on tech despite my finance doctorate — I’m still an engineer at heart, I guess.
3. Pursuit of quality — I felt early on that it would be our quality that would distinguish my firm and our products. The data needed to be cleaned and organized, and correctly calculated analytics provided with the data, in order for it to be useful, and we needed to do it right. This continues to drive me to find the most comprehensive and high-quality sources of data that we can to build our products around, and to incorporate extensive QA into our data processing and our models. As a result, we have become a trusted name in both the academic community and within the financial institutions, often being referred to as “the gold standard” in options data.

Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader?

The hardest thing about running a company might be knowing when to let someone go. Sometimes the goals of the company may have changed or the person may have changed, or for whatever reason their skills no longer fit the needs of the business. But many of my employees and former employees have, over time, become like family, making it hard to make the decision to say that it’s time to part. But a good manager and a good leader must be able to face this. It’s a very personal thing to have to tell someone their services are no longer required or useful, very hard to do. I have had to learn to be able to view each role and people’s strengths objectively. You cannot just be a passive leader — and getting to this point is a key evolutionary step in every small company.

Ok, thank you for that. Let’s now jump to the primary focus of our interview. Most of our readers — in fact, most people — think they have a pretty good idea of what a C-Suite executive does. But in just a few words can you explain what a C-Level executive does that is different from the responsibilities of other leaders?

Each C-Level executive has specialized over-arching responsibilities. For example, the CFO is responsible for all the overall financial health, including being sort of the “hall monitor” of the annual budget. A company is ultimately a financial enterprise and the CFO’s full attention and interest must be in capital funding, cost management, and other financial aspects of the firm, being very focused on the money side of the business.

The COO is responsible for day-to-day operations. Our COO also serves as chief of staff and keeps the CEO from having to deal with the little stuff (which is often not so little)! The COO handles the crises in the working environment, ranging from implementing and maintaining our strategy, to overseeing the internal HR and support teams, all the way down to employee morale — including choosing the snacks in the breakroom.

The CEO is responsible for the overall company vision and direction, and needs to be multi-faceted, sort of a spiritual leader who makes sure that everyone else understands what we are doing as a company and what they should be doing as part of that. I sometimes need to arbitrate disagreements on actions that need to be taken or need to make decisions by using both my heart and my brain to advise my people on the best way to operate. I also represent the company to the investors. CEOs must be higher level strategists — and decide what sorts of customers have priority, what initiatives to pursue or prioritize, the best ways to allocate the budget based on options given by the CFO. CEOs need to keep an eye on the markets and the customers.

At OptionMetrics, I also drive the technology decisions and investigate new speculative technology, sometimes throwing new ideas or products over to my technical staff for review. Now that we are part of Leeds Equity Partners, I sometimes participate in summits and discussions with the other CEOs in the Leeds portfolio. I also assess our corporate strategy to deal with changes in the working environment, and investigate potential acquisitions, new business areas, or new partners. And of course, I’m always mindful of the fact that the CEO is often the first to be fired if things go wrong or the company is acquired!

It has been three years now that we have been part of Leeds. As investors, they have been extremely supportive and helpful, and their interests in growing the firm are perfectly aligned with mine and those of my employees.

What are the “myths” that you would like to dispel about being a C-Suite executive? Can you explain what you mean?

Some people think CEOs are very out of touch with the detailed levels of the company and its employees. This certainly depends on the size of the company — large public companies have different actions for CEOs than smaller companies, where the CEO must be very hands-on. In smaller, but big enough, companies, there are great people who can promise and deliver in their own areas of expertise, but the CEO still needs to have an overview. On the other hand, once a company gets a bit larger, the CEO can no longer just do everything by themselves. They need to trust their people to do their own jobs well, and that allows the CEO to focus on long-term strategy.

What are the most common leadership mistakes you have seen C-Suite leaders make when they start leading a new team? What can be done to avoid those errors?

I’ve seen some leaders who often micromanage, and are too hands-on, and their people resent it. You’ve got to give people direction and let them do their jobs, even if it means letting them fail every now and then, so that they know you trust them.

In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?

People often underestimate the time it takes to do all the little stuff. It is often easier to visualize things than to implement them. For example, I can envision an addition to the website and communicate to the team the main idea in my head: like, here’s what I want, and then I describe it. I always think we can crank it out pretty quickly — but it’s rarely as easy as I think it will be. Or the responsible person doesn’t fully understand the point I’m trying to make. Or other stuff takes a higher priority because of business or customers’ needs, and so the less important stuff has to wait. Most things are not quite as easy as we think they will be or take as little time as we think or wish.

Ok super. Here is the main question of our interview. What are your “Five Things You Need To Be A Highly Effective C-Suite Executive”? If you can, please share a story or an example for each.

1. Patience — Sometimes it is best to wait to get things done right and to look more long term than short term. Occasionally, when we introduce customers to our data, they might not sign up right away. We foster a long relationship and months later, or even longer, they’ll come back and say, you know what, we’re ready to sign.

2. Focus — We founded OptionMetrics with one mission in mind that remains the same today: to provide accurate, research-grade options data and analytics tools, to allow investors and researchers to more efficiently analyze markets and determine risk. Ensuring the highest quality of the data is a philosophy that has remained paramount over the past two decades.

3. Empathy — For one of my first summer jobs, I was working for an engineering company as an intern. Every now and then, the head of the department would have a closed-door meeting in his office and everyone outside of the office could hear the manager screaming and yelling at the people in his office. I remember thinking that was not what I ever wanted to be like.

4. Confidence — Ultimately, if you are going to be responsible for leading a company, you need to be confident in yourself and your views, and be prepared to defend them — not just to your people and your investors, but also the little critical voices in your head!

5. Sense of humor — Sometimes things just don’t go perfectly according to plan, and it’s helpful once in a while to be able to shrug and laugh it off (but not too often!) The job becomes a lot easier when you can do it with a good attitude and a light heart. And every company has its craziness!

In your opinion, what are a few ways that executives can help to create a fantastic work culture? Can you share a story or an example?

Building on the story of the manager at my first summer job above, I think it works best to make an office an environment where everyone is gaining enjoyment from something they are doing there, rather than one where people feel intimidated. Hire good people who like what they are doing and give them challenges that are interesting, rather than boring drudge work. Generationally, people may be different from each other and may enjoy different things than what my generation would have enjoyed — so you have to keep up and ask them what they like about what they are doing. Play to their strengths.

Have some fun in the office too, and don’t forget to schedule time to enable the staff to bond and maybe talk through their differences of opinion challenges. For example, we have done karaoke nights as company get-togethers, and it’s always a lot of fun — of course, we don’t force anyone to participate if all they want to do is listen. You need to accept that at the end of the day, some people just want to go home, so try make the office fun and a pleasant place to be while present working. And have a budget for snacks and food — it’s more important than you think, even if it’s a small budget. You’d be surprised at how much people appreciate the chocolate, coffee, and Pop-Tarts® that are always in supply.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Well, not really start, but encourage: capitalism! I believe firmly in capitalism and it is the political and economic philosophy I support, with just one caveat: make sure that everyone can get the education they need and the opportunity to use their ideas to create jobs, products, services, and grow intellectually. This is the best way to ensure that our society will continue to thrive. I am a strong believer in the power of free markets and feel that it is as important a human right as free speech.

How can our readers further follow you online?

Our website is www.optionmetrics.com and we can also be found on social media:

• LinkedIn: www.linkedin.com/company/optionmetrics
• Facebook: www.facebook.com/optionmetrics
• X/Twitter: @OptionMetrics

Thank you for the time you spent sharing these fantastic insights. We wish you only continued success in your great work!

About the Interviewer: Douglas E. Noll, JD, MA was born nearly blind, crippled with club feet, partially deaf, and left-handed. He overcame all of these obstacles to become a successful civil trial lawyer. In 2000, he abandoned his law practice to become a peacemaker. His calling is to serve humanity, and he executes his calling at many levels. He is an award-winning author, teacher, and trainer. He is a highly experienced mediator. Doug’s work carries him from international work to helping people resolve deep interpersonal and ideological conflicts. Doug teaches his innovative de-escalation skill that calms any angry person in 90 seconds or less. With Laurel Kaufer, Doug founded Prison of Peace in 2009. The Prison of Peace project trains life and long terms incarcerated people to be powerful peacemakers and mediators. He has been deeply moved by inmates who have learned and applied deep, empathic listening skills, leadership skills, and problem-solving skills to reduce violence in their prison communities. Their dedication to learning, improving, and serving their communities motivates him to expand the principles of Prison of Peace so that every human wanting to learn the skills of peace may do so. Doug’s awards include California Lawyer Magazine Lawyer of the Year, Best Lawyers in America Lawyer of the Year, Purpose Prize Fellow, International Academy of Mediators Syd Leezak Award of Excellence, National Academy of Distinguished Neutrals Neutral of the Year. His four books have won a number of awards and commendations. Doug’s podcast, Listen With Leaders, is now accepting guests. Click on this link to learn more and apply.