Can anyone run Citigroup? - Apr. 21, 2008
This review of Citigroup was in Fortune's 500 issue. "We know this banking giant is too big to fail. But is it also too big to manage?" The history of the last 10 years certainly seems to suggest that.
Some thoughts on staying great
I am sure that the merger fitted some strategic criteria deemed priorities for the two businesses. But I am not sure this type of story is usually an issue of strategy. I don't really feel that strategy is difficult intellectually (Porter has three, Welch believes you cannot be everything to everyone – strategy is resource allocation). This is partly because it is a rational exercise that can be taught, and has been taught very aggressively through many business schools and management training programs.
More important is the aim of strategy. To build or sustain competitive advantage. Now sustaining competitive advantage is uncommon, and requires ever vigilance to sustain it. In the same issue Jim Collins writes about why many companies can survive, based on individuals taking responsibility and accountability.
Good to Great talked about
- confronting brutal facts
- right people
- absolute clarity as to what that strategy is
- executing like hell
…and I think being able to adapt to new changes through a strong culture's adaptiveness (strength is pervasiveness not type)
It seems to be that many leaders end up not really understanding the business they run. Perhaps that was the case at Citigroup. Perhaps it is the reality of many evolving industries and a world of volatility and job-hopping executives. In reading Good to Great, Jack Welch, Mintzberg, the commonality is that effective strategists are not those who distance themselves from the detail of the business “…but quite the opposite; they are the ones who immerse themselves in it, while being able to abstract the strategic messages from it”
Humility in the leader is not about the level of ego per se. It's really about how you understand the big picture and the role you play. It is about understanding the importance of ensuring the basics of information flow are there to ensure integrity (integration of functions and organization). You cannot understand everything that the business does, but you can know that your teams are working together and in the same direction. This is no easy task in large and/or rapidly changing environments.
I guess that is also where the glue of culture comes in. But how easy it is to write about culture, and yet how hard in practice. A good sign to watch is for mavericks who keep a strong culture evolving, or leave a weak culture. Also you need Symbolic Managers – those whose everyday actions reflect the culture. Leadership must set the example, but there must be a balance of listening and leading to allow the space for bottom up.
I think on the foundations of leaders and culture, you can drive to making decisions in the right way. Any group we are involved in lives or dies by its decisions. The toughest situations are about confronting the brutal facts with the confidence that your ship can hold together. This comes back for the need for the right information foundation.
- right metrics (financial and non-financial, less against plan more against actual)
- right ownership (I see an important Finance role here)
We must be able to 'Reperceive' – remove denial, accept brutal facts, and think outside the preconceived memory of the future. We must encourage and manage the tension between functions working together in the company (the bears v the bulls; the marketing sales projections v financial probability)
He who predicts the future lies even if he tells the truth. But coherence in multiple and cumulative decisions and their execution within the group can make the difference.
This review of Citigroup was in Fortune's 500 issue. "We know this banking giant is too big to fail. But is it also too big to manage?" The history of the last 10 years certainly seems to suggest that.
Some thoughts on staying great
I am sure that the merger fitted some strategic criteria deemed priorities for the two businesses. But I am not sure this type of story is usually an issue of strategy. I don't really feel that strategy is difficult intellectually (Porter has three, Welch believes you cannot be everything to everyone – strategy is resource allocation). This is partly because it is a rational exercise that can be taught, and has been taught very aggressively through many business schools and management training programs.
More important is the aim of strategy. To build or sustain competitive advantage. Now sustaining competitive advantage is uncommon, and requires ever vigilance to sustain it. In the same issue Jim Collins writes about why many companies can survive, based on individuals taking responsibility and accountability.
Good to Great talked about
- confronting brutal facts
- right people
- absolute clarity as to what that strategy is
- executing like hell
…and I think being able to adapt to new changes through a strong culture's adaptiveness (strength is pervasiveness not type)
It seems to be that many leaders end up not really understanding the business they run. Perhaps that was the case at Citigroup. Perhaps it is the reality of many evolving industries and a world of volatility and job-hopping executives. In reading Good to Great, Jack Welch, Mintzberg, the commonality is that effective strategists are not those who distance themselves from the detail of the business “…but quite the opposite; they are the ones who immerse themselves in it, while being able to abstract the strategic messages from it”
Humility in the leader is not about the level of ego per se. It's really about how you understand the big picture and the role you play. It is about understanding the importance of ensuring the basics of information flow are there to ensure integrity (integration of functions and organization). You cannot understand everything that the business does, but you can know that your teams are working together and in the same direction. This is no easy task in large and/or rapidly changing environments.
I guess that is also where the glue of culture comes in. But how easy it is to write about culture, and yet how hard in practice. A good sign to watch is for mavericks who keep a strong culture evolving, or leave a weak culture. Also you need Symbolic Managers – those whose everyday actions reflect the culture. Leadership must set the example, but there must be a balance of listening and leading to allow the space for bottom up.
I think on the foundations of leaders and culture, you can drive to making decisions in the right way. Any group we are involved in lives or dies by its decisions. The toughest situations are about confronting the brutal facts with the confidence that your ship can hold together. This comes back for the need for the right information foundation.
- right metrics (financial and non-financial, less against plan more against actual)
- right ownership (I see an important Finance role here)
We must be able to 'Reperceive' – remove denial, accept brutal facts, and think outside the preconceived memory of the future. We must encourage and manage the tension between functions working together in the company (the bears v the bulls; the marketing sales projections v financial probability)
He who predicts the future lies even if he tells the truth. But coherence in multiple and cumulative decisions and their execution within the group can make the difference.
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