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Turning an Association into a Business

Over two decades, Adena Friedman helped lead transformation at NASDAQ

Adena Friedman
CEO, NASDAQ
CEO, NASDAQ

Vanderbilt MBA 1993

In 2015, Forbes listed Adena Friedman among the 40 most powerful women in the world (one spot behind Nancy Pelosi). At NASDAQ, she’s President of Global Capital Access, Technology & Insights. She’s also served as CFO and managing director of the Carlyle Group.

But she still remembers an episode from early in her career, at a 1995 conference sponsored by Owen’s Financial Markets Research Center. Just two years removed from graduation, she was back on campus watching Bill Christie, a favorite professor of hers, endure a searing critique from his former mentor Merton Miller, a Nobel laureate in economics. And as if that weren’t awkward enough, Friedman was actually rooting against Christie.

In 1995 Adena was still a relatively new employee at NASDAQ, the nation’s largest electronic stock market. Meanwhile Miller had been hired as a consultant by NASDAQ to refute Christie’s theories about collusion among market makers at the company. While Friedman felt for her former professor, she quietly hoped that Miller—and NASDAQ—would prevail.

“I was rooting for the other guy,” she says, laughing. “But in the end Bill Christie was proven to be right. He literally fell across something important, and what he found ended up creating lasting change.”

While the history of the Owen School and the history of NASDAQ are forever linked because of Christie’s findings and the regulatory changes that followed, they’re also intertwined because of Adena. Over the years she has taken the lead on a myriad of initiatives, including acquisitions and mergers that have positioned the company to compete in a changing global economy.

Adena started her NASDAQ career as a business analyst immediately after receiving her MBA from Vanderbilt. “I graduated saying I wanted to be a product manager, but not with commercial products. I wanted to manage complex products. I was lucky because that’s exactly what NASDAQ offered me,” she says.  

“When I came to NASDAQ, they didn’t understand that they had products,” she says. “I came in on the ground level, building business plans for trading products. We had launched the initiative for PORTAL (which facilitates the quoting and trading of restricted securities eligible to be bought and sold by qualified buyers and sellers) three years before but hadn’t succeeded in generating any revenue. We had to ask ourselves how to turn it around and make money off of it.” Adena’s product plan, which involved instituting a fee, is still in place today.

Managing and marketing complex products for NASDAQ perfectly melded the academic interests Friedman honed at Owen. “What I do falls under the marketing discipline. But what it really is, is being your own CEO of a product,” she says.

After the successful relaunch of PORTAL in the mid-’90s, Adena became involved in several dot-com initiatives for NASDAQ as well as sophisticated technological advances and acquisitions to handle the growing number of trades.

“By the time I got there, we were a very, very active market,” she says. “I remember we were building Workstation 2 and marketing that. We were trading around 100 million shares a day. We built the new workstation to handle 300 million trades, and within three days of the launch we were trading at that level. We just kept surpassing all expectations throughout the ’90s.”

The retooling that followed revelations of collusion among market makers in the early ’90s better positioned the company to thrive in a global economy, Adena says. The company further reorganized in 2000, creating new business units and becoming a shareholder-owned, for-profit company. As NASDAQ became more global, Adena was primarily responsible for leading all mergers and acquisitions.

In 2007 NASDAQ agreed to buy OMX, a Nordic and Baltic financial services company, which operated the Copenhagen, Stockholm and Helsinki stock exchanges, among others. The complicated transaction also involved the Borse Dubai, a stock exchange in the United Arab Emirates. The resulting merger, named NASDAQ OMX Group, is the world’s largest exchange company.

Since the merger NASDAQ OMX Group has acquired both the Philadelphia and Boston stock exchanges. Its growing global presence is astounding considering its humble origins.

“NASDAQ began as nothing more than a bulletin board on the computer for posting dealer quotes,” says Hans Stoll, Director of Owen’s Financial Markets Research Center and Anne Marie and Thomas B. Walker Professor of Finance. “Adena was very much involved in transforming a trade association into a business organization. Not only did she survive those changes, she was very much a part of them and she thrived.”

“I graduated saying I wanted to be a product manager, but not with commercial products. I wanted to manage complex products. I was lucky because that’s exactly what NASDAQ offered me.”