While many executive teams work hard to build teamwork, the excellent article about Citigroup in the New York Times over the weekend shows that getting along isn’t always such a great idea. The piece demonstrates the need to foster disagreement, even when that disagreement is painful and may cut into short-term results (and bonuses).
The piece says that the person who was in charge of evaluating the risks being assumed by two major parts of Citigroup was good friends with the two executives who ran those groups, to the point that he’d often wait outside the office for 45 minutes so they could drive home together. Not surprisingly, the risk executive seldom said no to his friends, who proceeded to put Citigroup into such a precarious position that this grand institution is having to plead for government help to avoid disappearing.
Though much has yet to unfold, the editors at the Harvard Business Review asked us to relate our work to the current mess. The result is a blog entry entitled “Six Lessons We Should Have Learned Already,” posted on HBR’s Conversation Starter blog. Follow the link to read it there.
“History repeats itself. But so soon? Imagine: The subprime mortgage disaster might have been averted, or at least lessened, had bankers done some homework.”
Matthew also has a slide show that captures our failure patterns.
Here’s an interview in which Paul discusses the current market crisis and how companies can learn from past mistakes with ABC News Money Matter’s Daljit Dhaliwal:
As regulators, investors, and managers grapple with the deepening economic crisis, the question being asked by everyone is “Who’s next?” Who will join Bear Sterns, Lehman, Merrill Lynch, Fannie Mae, Freddie Mac and AIG on the failure list? We think that’s the wrong question. The strategies that doomed these companies were unleashed years ago, and whether or not others will be destroyed by the rising floodwaters will mostly depend on factors outside of their control. That’s not to say that managers at Washington Mutual and others rumored to be at risk should not bail water as hard as possible. The more important question, however, for those who through good management (or good fortune) managed to stay healthy is what they do now.