Edward C. Johnson III
Former Chairman and CEO of Fidelity Investments
Ned Johnson is a native Bostonian, a man who has propelled the business started by his father into an investment company known worldwide for its long-term performance.
Perhaps he is not the first person one would expect to find promoting the Japanese concept of kaizen. But kaizen, or “making small improvements in all areas of the company over an extended period of time” in the words of Johnson, is an accurate description of the impact this business leader has had on Fidelity Investments.
Ned Johnson stays out of the public eye, preferring to spend quiet time with his wife and three children, collect art and antiques, and play tennis. Despite a low profile, he has earned the respect of his community, his business peers, and Fidelity employees, who look forward to Johnson’s visits to their department floor. Often, he offers work process suggestions and new ideas. His involvement in so many different aspects of Fidelity’s business is testimony to the leadership of this influential entrepreneur.
Early in life, Johnson demonstrated an interest in machines. He enjoyed taking them apart and examining them to understand how they functioned. Eventually, what most intrigued him was the power of computers, and he learned as much as he could about them. Today, it is clear that the application of information technology, spearheaded by Johnson himself, provides a strong competitive advantage to his successful company.
Johnson joined Fidelity, the family business, as a stock analyst in 1957 immediately after receiving his bachelor’s degree from Harvard. Said his college roommate, “He wasn’t a scholar, but he was reading a Wall Street Journal before I even knew what it was.” So eager was he to be judged on his own merit, Johnson referred to his father as “Mr. Johnson” while at the office. From 1961 to 1965, Ned ran Fidelity’s Trend Fund, which ranked No.1 among growth funds throughout the period. In 1972, he was named president of the company.
Ned Johnson is credited with bringing about profound change, not only to this private investment company, but also to the industry at large. His innovations include the introduction of check writing on Money Market funds as well as identifying and entering the enormous market for supplying discount brokerage services to banks, insurance companies, and consumers. Johnson’s vision and risk taking have moved the company forward for more than 35 years and he has always had an eye toward the long-term success of the business. Under his leadership, Fidelity invested in new computers and telephone systems, even in 1974, a year when assets dropped by one-third. These investments positioned Fidelity to better serve its customers in the bull market of the 1980’s, using innovations such as toll-free investor services and walk-in investor centers across the United States.
Ned Johnson became chairman and chief executive of Fidelity in 1977, and today holds the positions of CEO, chairman of the board, and director, FMR Corp. Even so, he is a frequent visitor to the computer room for updates on new technology, and follows stocks and funds from his desktop. In the Boston offices, he has been known to join the legion of telephone representatives so that he can learn from the customers, who are the best source for Fidelity’s ongoing innovations.