For the past seven years, Jack Stack has been a familiar face in the business and social scene of the Czech Republic. Aside from turning Česká spořitelna in to a profitable and well managed bank – with more than 5 million accounts – Jack has been a champion of the talents and potential of Czech business people. Always open and good natured, Jack’s message is one of sincere optimism and belief in the country, as well as human nature. Today, Jack and his wife Patty have returned to their beloved New York, where Jack is contemplating the next chapter in an exceptional career.

Why don’t you begin by explaing what brought you to the Czech Republic?

Basically it was two reasons. One, I spent 22 years at Chemical Bank and then Chase Manhattan Bank and I had a high position but I wasn’t going to be a CEO, so I had this opportunity to become a CEO of a bank, even though it was not a good bank. And then I think the second reason was the sense that I had all this experience and I could really help this bank with, I could apply 23 years of banking and take this bank that was underperforming in a dramatic way and help them to improve, help the people to improve.

And I really thought, in 1999, this bank has been in existence since 1825… it’s in hard times now, but you know there’s something going on here in Central Europe. It’s going to grow and I really thought the EU would help Central Europe put a market economy in place. I said this is a great opportunity, a chance to be CEO and a great opportunity to apply my skills.

Did you have any apprehensions about coming into Central Europe? How did your preconceptions of what the Czech Republic was like compare with what was actually here when you arrived?

You know, you have this picture in America of heavy set women with drab clothes, and then you arrive and see these models walking the streets everyday. It was a surprise, from the point of view of the ability of the people to welcome you… so we never felt unwelcome, but there was this huge period of adjustment, of things that you miss. Where’s the dry cleaner? How do I get my shoes repaired? There’s not a guy on the corner… and certain foods that you really didn’t like or didn’t have a craving for. You come here and then you crave this stuff, like English muffins. When you were living outside the Czech Republic you didn’t think it was a big deal, it wasn’t as if you ate it every day, now you say, Oh my god, I gotta have English muffins.

So on the one hand there were certain things you missed, but on the other hand, the access to culture was phenomenal. You go to the Rudolfinum, Obecní dům, the National Theatre, and it’s not a big deal. It doesn’t cost you enormous amounts of money and you don’t have to plan three months in advance to get a ticket. That was also a surprise. So there were surprises from the point of view of what you couldn’t get and surprises from the point of view of what you could – like the Karlovy Vary Film Festival or the President of the Republic not being surrounded by 200 security guards. It’s so human, so much like what America used to be. And no negative comment about America, but it’s changed so dramatically. And the citiy, Prague in particular, works. I mean, despite the traffic, the metro system works, it’s manageable. New York with 8 million people at times seems totally unmanageable.

What do you see as some of the biggest changes that have taken place since you’ve been here?

I’m a big fan of the EU, despite everybody’s complaints about the EU constitution. I think without the EU, this country wouldn’t have had a market economy, we wouldn’t have had Audi and Volkswagen coming into Škoda, we wouldn’t have Toyota in Kolín… and I think the EU put in place a market economy that has permitted economic growth and that economic growth has lead to the emergence of a middle class that now has mortgages, now has credit cards, now has savings, now has asset management… and I really think that you’re seeing much more of a rapid convergence to EU and North American standards from an economic development point of view. And that is something that’s going to continue. I really believe that the Czech Republic and the Visegrad group will be an engine of growth for Europe. Instead of talking about the Celtic tiger, we’ll be talking about the Slavic lion. I’m trying to get the Slavic lion to be adopted because I really think it’s going to be a big deal.

Have you noticed much of a change in mindset over the years with regard to the people that you’ve dealt with here?

I think when I came in 2000, people were very averse to risk at the bank, they didn’t want to make any loans. Banks are supposed to make loans… you know, we take deposits and make loans. But 45% were non-performing loans; for every 100 crowns we loaned we didn’t get back 45. That’s bad. I think what’s happened since then, there’s starting to develop a greater confidence about the future. People are starting to take mortgages… our mortgages are growing to represent 50% of the bank. And Czechs are more confident about their ability to succeed and about the ability of the Czech Republic to compete, not only in Central Europe but throughout the European Union.

And there’s an emergence of an entrepreneurial class, which is really, really exciting. I think the folks who have suffered the most are people around 45 and above. They were born under Communism and many haven’t been able to adjust. I’m always the oldest person in the room at the bank. There’s a lost generation of managers in the Czech Republic that I feel so sorry for, because when you look at the generational shift, the 45 and below, they’re going to be gangbusters when they fully come on the scene.

When you look back on the Czech Republic and your time here, what do you think is going to be your most memorable experience, what’s going to stand out the most?

I think two things will stand out. One, I was here nine months in 2000. I was taking the metro home, we lived in Prague 6 and I was really depressed, it was a Friday afternoon and I had a bad week at work, and I got on the train and switched at Museum to go to Dejvická, this young lady came up to me and said, Mr. Stack? And I said yes, and she said I work for the bank. I work for your branch in Jungmanova, and she went on about all the things going on there, that she was making more money, that she liked the bonus system because it rewarded her for her work and in the past she was never rewarded for her work, and that finally the ATMs are working because they never worked… and that moment gave me a sense that we could make this work. It really hit home, that when I was in my deepest depression of it possibly not working, she’s the one that gave me heart. And, she’s still with the bank, thank God, she’s a branch manger and doing very well.

And I also think that 10 years from now we’re going to look at the Czech Republic and it’s going to be part of this New Europe, that its gonna “wow” the rest of Europe. I’ll remember 2000 when we’d just come out of the recession, when unemployment was over 10% – in Ostrava it was over 20% – and I’ll say, Boy the world has changed. It works, this whole sense of economic development in the EU. So those two things will really stick out in my mind.

What do you consider the biggest differences between Western Europe, the US and Central Europe in terms of mentalities and attitudes?

Well, we’re a Czech bank and we were initally 52% owned by an Austrian Bank and now 98% by an Austrian bank. I don’t see any differences between the Austrians and the Czechs. This is all part of the old Austro-Hungarian Empire. I guess it depends on how you define the West. To highlight, let’s take America and the Czech Republic. Americans are overly optimistic, and like to be very strategic; the Czechs in my mind are overly pessimistic and are very good at execution. Once you’ve got a plan, they go forward with the execution. So I was never afraid at the bank, once we had a plan, whether it would get done. If you needed to change after the first eight steps it would not change, it would get done as initially planned. I think that an American point of view is strategic and willing to take on a lot of risk, while Czechs are more execution orientated and really afraid of risk… I think part of that goes back to the totalitarian regime, you made a mistake back then and you were in deep trouble. But that’s changing and that’s good. One of the things we try to do at the bank is not kill people for mistakes. I mean, you make a mistake, you make a mistake – don’t do it twice, but okay, lets move on. That’s something that we’re trying to inculcate.

Then we can get into little things, like the fact that Americans never start meetings on time, while with Czechs, it’s like it’s religious. It’s unbelievable to me. And clearly I think Czechs and Austrians are much more formal; formal in their dress, in their greetings, in their titles. I had to get used to it, the first time I went to the Rudolphinum for a concert I wore sport jacket, open neck shirt and a pair of slacks and I thought I was fine, I walk in and the only people dressed worse than I was were the American tourists, who were coming in jeans. I could never do that again, whenever I’m invited any place in the Czech Republic, whatever my natural instinct to dress, I just move it up one level. I know I better do that… but there’s a warmth here. This is a very cultured country, much more cultured than in America. There’s a long tradition of music and theatre and writing here… and you just have to respect that, that’s the difference.

What do you see as some of the key challenges facing Czech society in the coming years?

One of the things that the Czech Republic still needs to address is making sure that actions are transparent and in the best interests of society. Society as a whole needs to address ethical standards about what is acceptable and what is not acceptable. I do believe that. The Police department in New York city was highly corrupt in the 1960s and ‘70s… in the ‘80s, they were paid a lot more in compensation, they were given retirement benefits after 20 years at half pay, so the balance between taking a bribe versus losing your pension became much more in favor of never lose your pension. I believe that recognition needs to come about in the Czech Republic. Gross proposals about increasing salaries and the compensation of the police I think are important and need to be addressed. We cannot have a society where people are not paid an adequate compensation, which makes bribe taking very attractive.

There needs to be consequences that don’t seem to be in place right now. The fact that journalists brought such injustices to the public eye, that this starts to happen, speaks well of the Czech Republic. That wouldn’t have happened ten years ago, but it did happen in 2003 and 2004 and I think it’s great, really great. It’s shock therapy for the older generation.

And what’s next for you?

There’s a magnet drawing me back to New York, it’s home. My parents emigrated from Ireland in the 1920s to New York, they met and married in New York, and they were – we would call them today economic emigrants – they did it because they were poor. But they were always drawn back to Ireland. They never moved back but they always visited there. I’m consistently fascinated by folks in the Czech Republic who went to the US or Canada and they’d been there 20-25 years, and then they come back. You can’t get it out of your blood… it’s extraordinary, the pull. The country is very special, sometimes I don’t think Czechs appreciate their country enough, how cultured it is. When you go to the theatre or a concert, you have the grandparents and the parents and even the grandchildren and it’s… it’s phenomenal.

We’ve been here seven years, it’s the adventure of our lives, but we’ll go back to New York, our “home town”. I’ll learn to waltz better and loose weight over the summer. And we’ll have the wedding and then I’ll decide… it could be teaching, it could be government, but not consulting, I wouldn’t be a good consultant. Then, I’m just not sure. I’ll be 61 in August and I need one more chapter for sure, and I don’t know what the next chapter is.