Changing the corporate culture is one thing that every company knows is next to impossible. It's one of the major reasons that mergers and acquisitions often fail and why many firms cannot move beyond the past and into the future.

That's why what impressed me most during our meeting with Ray Tierney, Morgan Stanley Investment Management's (MSIM) global head of equity trading, and his team was Tierney's ability to change the firm's culture (see this month's cover story, "A Revolutionary Renovation"). Tierney joined the firm in fall 2006 and has infused energy and a new sense of ownership into the buy-side shop, which was rolling along doing things the way it had always done them, and getting by just fine. But Tierney didn't want to get by just fine -- he wanted to be on the cutting edge of the current convergence of buy- and sell-side trading. He wanted to leverage the knowledge he had from 25 years on the sell side to revolutionize buy-side trading.

What he didn't do was storm into his new office and start pounding his fists and saying this is how things are going to be done around here or else. Nor did he come in and fire staff to make sweeping changes. Instead, he took the time to get to know the employees and the way things worked. He came up with a comprehensive plan for change, and hired key people to help him execute and manage that plan. He spent the time to communicate the plan and its benefits to the entire firm -- from the top, down. He spent time with the traders and technology executives, proselytizing the plan's benefits.

Change didn't happen overnight, but Tierney was patient. It wasn't until about a year after he joined the firm that he dismissed staff that weren't on board with the new mission, and he made those changes only when he was sure that they were necessary to push the Trading Renovation project forward. It took at least 50 presentations to get buy-in for the Trading Renovation initiative, admits Tierney. But once his people bought in to the idea, the wheels were set in motion and things began to happen. Soon he wasn't the only one doing the proselytizing.

The traders who understood the change occurring in industry also understood that Tierney's changes would be the best thing for their careers. They didn't want to just be order takers anymore -- they wanted to use the new tools available on the desk to help preserve alpha.

First and foremost, they believed in the passion and work ethic of their leader, Ray Tierney, who admits that he has worked harder since he joined MSIM than at any other time in his career. And Tierney leads his team by example. In our meeting with him and his team, it was clear that they love what they do and that they have a deep respect for the man leading the charge. And that's how you change culture.