The most important thing to understand about John Cleghorn is that he is still, at heart, the centre of his college football team.

Centres aren't glamorous. They don't score the fancy touchdowns or throw the game-winning long bombs. Nobody remembers their name. They line up over the ball, patiently await the signal, and then at the quarterback's command snap the ball back and lunge head-first into the competition, in unison with their linemates.

John Cleghorn, BCom'62, was part of the fabled 1960 McGill team that won the national championship under star quarterback Tom Skypeck, DDS'63. The team was runner-up the next year. The fiercely competitive Cleghorn doesn't intend to finish second again. As chairman of McGill's recent fundraising campaign, he raised the most ever for a Canadian university, $205 million--some $5 million over the goal‹one many thought was unattainable given a recession and referendum. And since Cleghorn took the helm of the Royal Bank just over than two years ago, he has led the bank to profits of $1.43 billion--the highest ever recorded by a Canadian company.

Weekends are for physical work Top: John Cleghorn relaxing with his dogs in Quebec

His style remains the same as in his college days: low-key, disciplined, and rooted in team. But one major aspect has changed from those quiet days on the gridiron in the past--and indeed, from the equivalently quiet banking days in the past. The competition isn't carefully scheduled and demarcated. It doesn't line up genteelly, waiting for a supervised, rule-ridden skirmish to begin. It swoops in from unexpected directions, hitting from all sides. Indeed, even the terrain is shifting: the bank branch that has traditionally been central to operations is now only one of many fields of simultaneous combat, as new players and new ways of banking shake up the financial services marketplace. The idea of "bankers' hours" has been solidly redefined. Canadians now bank by phone, through computer lines, standing in the street at bank machines, and in their own homes. Doctors don't make house calls any more; bankers do.

Heretical talk

Cleghorn may head Canada's largest bank but he knows better than anybody how fragile that position is. Global competition means it will be difficult to defend the championship in coming seasons. When Cleghorn joined The Royal Bank of Canada in 1974, it was the second largest bank in North America and the 12th largest in the world. Today, it's the sixth largest in North America and 65th in the world. Still, the newly-named "Royal Bank" makes 30 percent of its profits outside of Canada. Cleghorn believes the key to success is innovation, both in Canada and abroad.

Royal Bank's 55-year-old Chairman and CEO is a measured thinker who repeatedly laces his talk with references to Joseph Schumpeter, an economist know for his theory of creative destruction. Schumpeter believed that innovation and invention was key to an upswing in the business cycle, but it also meant destruction for others who couldn't adapt. The Austrian economist was also president of the Biedermann Bank, which went bankrupt in 1926. From this lesson of history, Cleghorn knows that large companies can go belly-up in surprisingly short order if they fail to address new forms of competition. The Royal Bank cycle of creative destruction means bank branches will be fewer, bank tellers will be fewer, but marketing, sales and technology people will be more in demand. Cleghorn believes his bank, in particular, has had a tendency to be a slave to tradition. "Our toughest competitor is complacency. You have to constantly move against it," he says.

That's unusual, if not heretical, talk at the Royal which has been Canada's largest bank for 70 years. Through that period, this Canadian landmark has often seemed as inpenetrable as its marble temples erected in early days. As one of Canada's six chartered banks, the Royal Bank has enjoyed special protection under Canadian law, a monopoly which gave Canadians stable banks and protection of deposits up to $60,000.

But in the late eighties, the four pillars of the financial world--banks, trust companies, insurance firms and brokerage houses ‹ began to merge. The Royal and other banks responded to deregulation with record profits‹textbook corporate success which created resentment on the part of many Canadians. For his part, Cleghorn argues that the banks are good employers, and that Canadians with mutual funds and pension funds invested in banks reap the profits.

Banks give out millions in charitable donations. Cleghorn also believes banks pay more than their fair share of taxes. Because of public acrimony, banks and the financial services industry is the highest taxed sector of the Canadian economy. The Royal Bank paid $1.34 billion in taxes last year, leaving $1.43 billion in (after tax) profit. At a Canadian Club speech in Montreal, Cleghorn also defended service charges. "Seniors and youth don't pay fees, and some 40 percent of our customers don't pay fees for basic services. And Canadian service charges are 50 percent less than in the United States."

Creative destruction, steadily

Since taking the helm of the bank, after serving impatiently for eight years as heir apparent, Cleghorn has been shaking up the bank in his quiet, disciplined and determined way. He doesn't draw the headlines of a Matthew Barrett, the flashy quarterback of the Bank of Montreal. But Cleghorn's fans say that he doesn't take a back seat to Barrett or other bank CEOs in activism or intellect, even if in the salary race he does, oddly ranking fifth, his $2.57 million compensation last year falling $1.3 million behind Barrett's. The official explanation is that salaries are set by tenure; Cleghorn is the most recent of the bank chairmen so his salary is lower. The CEO's salary is set by the bank's board. "He's not as greedy," avows one of his Royal colleagues.

Pattie and John enjoy their garden in the Eastern Townships

He is careful to avoid that impression. John Cleghorn's first step was to hack away at the imperial veneer and heighten cost-consciousness in the bank. He started in his own office, making it more modest. He also shut down the executive dining room, ended the practice of having an in-house barber, sold off the corporate Challenger jet and eliminated executive limousines, including his own. He travels to work by subway, cab, or his own car (a Chrysler in Toronto, an Explorer in Montreal: modest by bank CEO standards), and flies economy class, insisting it is an excellent way to meet the bank's customers.

In some ways, those efforts simply reflect the man. But the economy drive also has a compelling business reason. The Royal has always been a high-cost operator and in an era when expenses threaten to escalate even higher--to fund technology and a more skilled, better paid work force--Cleghorn was determined to strike early and point out that nothing was sacred. He managed to hold expenses stable his first year in office, although last year they rose to accommodate the blizzard of new electronic delivery channels the bank is rushing on stream and the high commissions during a spectacular year at its investment dealer, RBC Dominion Securities Inc. Donna Toth, the director of financial services and equity research for Scotia Capital Markets, notes that although Cleghorn hasn't improved the efficiency ratio (the ratio of expenses to profits), he has taken the lead amongst bankers and has spread the message effectively. "If you talk to a branch manager, he will know the chairman flies economy. It's not so much the money saved as the message sent to the troops," she says.

One of Cleghorn's toughest challenges has been integrating the new, more risk-taking culture from the investment enterprises with the more clubby bankers who earn fixed salaries not commissions. This is particularly critical as new branches are being opened with people from the bank, brokerage and corporate investment areas working side-by-side, bringing together different work styles and, more importantly, reward structures. "It has been very difficult to reward stars in a unique way in the bank because of the egalitarian spirit," says Jim Walz, senior vice-president of strategic development, noting that traditionally everyone at a certain level in the bank has been paid the same. "In the investment banking community, stars are rewarded very well and if you're an average performer you're gone." Employees are now rewarded for referring work to other parts of the bank, something not traditionally recognized.

Although Cleghorn oversees the new star system, he shuns personal publicity, feeling it detracts from the teamwork necessary for competitive success -- teamwork that was exemplified on the Molson Stadium playing field.

The early years

Cleghorn's mother, Hazel Dunham, was a well-known dietitian at the Montreal General Hospital and acted in local plays. His father, Ned, whose work alternated between accounting and art until he combined both as associate director of the Montreal Museum of Fine Arts, prepared the sets for those plays. As a result, Cleghorn is a lover and patron of the arts, though most people are more aware of his football prowess.

"He had a great temperament," recalls his former coach, Bruce Coulter. "He was even-tempered but intense." After the season ended, Cleghorn met his wife, Pattie Hart, DipEd'62, during a Christmas ski break in the Laurentians. "She was on one end of the table, I was on the other, and some people said, 'Hey, why don't you two sit together?'" They have been married for 34 years.

After his McGill football career, the 220-pound, 6-foot-2 Cleghorn was drafted by the Toronto Argonauts but wisely knew how to play to his strengths. The Argos regular centre was All Canadian and Cleghorn figured he would provide bench strength. Instead, he articled at Clarkson Gordon and became a chartered accountant. He studied for the CA exams at a Quebec monastery with classmate, Richard Pound, BCom'62, BCL'67, the Olympic swimmer who went on to become vice-president of the International Olympic Committee and is now chairman of McGill's Board of Governors. Pound recalls one of Cleghorn's formidable strengths, which showed itself early: "You learn with your ears open and your mouth shut. John always listened." After working briefly as a sugar futures trader with St. Lawrence Sugar, Cleghorn joined the Mercantile Bank, which Citibank had just purchased from Dutch interests and which he thought might be an avenue to international work. The interest stemmed in part from a friendship with an Argentinian classmate, Guillermo (Bill) Murchison, BCom'63. The two had shared a cottage when their children were young and had been married on the same day on separate continents. ("I never wanted to work for a bank, but I did want to work at something international," says Cleghorn, the man who granted loans to his children for university and required repayment with interest.) The Mercantile didn't have a ponderous training program like Canadian banks, so Cleghorn rose faster in the organization than he might have with a native bank, becoming Winnipeg branch manager at age 28 and then being appointed Western regional vice-president in his early thirties. American banks were also more marketing-oriented and that too rubbed off on the new initiate. In 1974, however, he changed directions. International work beckoned, but working for the American-owned bank in the west, visiting historic sites with his young family, had ironically turned him into a deep nationalist and he wanted to remain in Canada. "I wanted my Shangri-la, if I did well, to be Montreal, Toronto, or Vancouver, not necessarily New York," he says.

A chance encounter with a friend from the Royal led to a job, although it meant a 10 percent pay cut and, as he puts it, donning monk's clothing for two years as the bank carefully groomed him in its practices. It was the first of several periods of impatience that friends recount, notably the eight years spent as president of the bank. "I have always been impatient," he admits. "I'm competitive. I thought there were things we could do better and I could help."

Robert Winsor, BEng'62, a friend since Redmen days, persuaded Cleghorn to hang in at the bank a decade ago, when he was worried he wouldn't make it to the top. To Winsor, president of IEC-Holden Inc., Cleghorn showed himself early. "He was always the leader," Winsor recalls. But the skill Winsor felt was most remarkable -- and told his buddy would land him the top job -- was the ability to focus on people he meets, induce them to open up, and a year later to remember the details of the conversation. "You're born with that skill," Winsor says. "He never trained himself. It's natural. I remember telling him it transcends math, financial and other skills."

Montréal, ma ville

Cleghorn is fiercely loyal to his roots. Montreal, his birthplace, remains an anchor in his life and the various boards he serves on all trace back in one way or another to his youth.

With most of the bank's executive functions in Toronto, Cleghorn owns a home in the Rosedale area but also retains a 50-acre country place in Quebec's Eastern Townships, where the couple can be found many weekends with their two golden retrievers. Two of the three Cleghorn children went to Bishop's University in Lennoxville, Quebec, and their father was chairman of its $10 million campaign. He is now Chancellor of Sir Wilfrid Laurier University in Waterloo, Ontario, where his father worked in the forties.

But it is McGill which has made the greatest call on his time. In 1991, Cleghorn was recruited as chairman of the McGill Twenty-First Century Fund campaign. From the outset many, including Montreal lawyer Alex Paterson, BCL'56, LLD'94, then McGill's board chair, privately considered the goal unattainable. There was, after all, the slumping Montreal economy, and the serious threat of the breakup of the country culminating in a razor-thin vote against separation in the 1995 referendum.

How could McGill succeed with an ill-timed fundraising campaign, an endeavour normally fuelled by optimism and stability. The answer, in large part, was due to Cleghorn. He remained cool and committed despite the serious illness of his wife, Pattie, who developed diabetes at the same time, underwent surgery and had a lung removed. And when the campaign stalled $30 million short of its goal with six months to go, Cleghorn persuaded Principal Bernard Shapiro to extend the contracts of campaign staff, then cleared his schedule to visit various foundations and donors himself. Even in-your-face insults didn't stop him. When Cleghorn flew to New York to meet a graduate tycoon about a donation to McGill, he was stood up. But many others opened their doors.

On the May 1, 1996, deadline, Cleghorn announced the campaign was over goal. Meanwhile, the Royal Bank prospered, and Pattie recovered. During this time, John and Pattie Cleghorn established the Pattie Cleghorn Fund in Diabetes Research at the Polypeptide Hormone Laboratory at McGill. The laboratory, led by Dr. Barry Posner, is working to develop a form of insulin that can be taken orally, instead of by injection.

Cleghorn says his wife's illness was a sobering reminder of life's fragility and he jealously guards their health and time together. He doesn't plan to retire in the CEO job but to move on before he's stale. And then? "Time," he says wistfully. "Time to read history. More time for the family. Maybe something in the community or helping companies." Part way through his tenure, John Cleghorn is the archetypal football centre whose steady, determined hand is guided by the lessons of history, of crushing defeats and great triumphs.

In gratitude for his dedication, McGill created a $1.5 million John Cleghorn Chair in Management Studies, currently held by Henry Mintzberg.