Competition is fierce. Structural changes in the marketplace are disrupting a business model that has been profitable for years. Key players are slow to embrace change and therefore risk falling behind the competitive curve. Pundits scoff and speculate that current players in the industry will not survive the intense dynamic new era.

No, I’m not speaking of the current credit crisis; this is a description of the exchange trading industry just a few short years ago. Those who have recently been following stocks such as NYSE Euronext (NYX), CME Group (CME), Intercontinental Exchange Inc (ICE), and Nasdaq Stock Market Inc. (NDAQ) may be incredulous as the sector has outperformed so many other areas of interest the last two years. How could such a bull run come out of a depressed and hampered business state.

The answer is the ability to embrace change and turn challenges into opportunities. And the way to invoke such abilities is through solid management and disciplined planning and execution.

John Thain was one of the main characters in the mid-decade resurgence of exchange trading. His leadership over the New York Stock Exchange during a time of crisis enabled a stodgy traditional Wall Street icon to adapt to a new tech-infused efficient way of doing business. The most amazing piece of the puzzle is that Mr. Thain was able to keep the culture and integrity of the age-old firm largely intact while still benefiting from the new business climate. John Thain is responsible for bringing NYSE public, expanding its reach overseas, and recapturing an eroding competitive edge during what would have otherwise been considered a time of stress and hardship.

Now we find ourselves in 2007 with stress and hardship in a separate but vaguely familiar industry. The sub-prime mortgage crisis coupled with a sudden lack of available credit has many participants in fear and many editorials predicting outright carnage for the active participants. Whether a glutton for punishment, or a leader in need of a challenge; John Thain has stepped up to the plate in another crisis in order to take the helm at Merrill Lynch (MER) and guide them through the murky waters. There is never any assurance that a new manager will have the ability to turn a hurting company around – especially in such a challenging environment, but I would not bet against this man’s insight and ability to use hardship as a building block for success.

While not lauded for his interpersonal skills, Thain has developed the ability to reach out to personalities in the trenches in order to win loyal support. His strengths center around his abilities to grasp specifics quickly and find creative solutions to problems. He is a hands-on manager whose attention to detail leaves little to chance. It can be assumed that within weeks of taking his position at MER, he will be completely up to speed on the intricate details of the company’s challenges and will likely employ solutions that have not been suggested by anyone else yet.

A proven leader and man of integrity is a rarity and MER is very fortunate to have been able to secure such an individual. Does this mean MER is a screaming buy at this point? I am not sure that I would be anxious to jump into the stock yet. But one thing is for sure – the name will stay on my radar as long as Thain is at the helm.

FD: Author does not have any positions in stocks mentioned