Citigroup Manager vs. Milgram Experiment

I read the recent post by “Still in Ofallon” and I have to admit I felt saddened. I do not agree with everything that the commentator wrote but I was struck by the lack of morale and the lack of respect for Sr. Managers. I am not saying this is not merited but when the commentator said “Now these people are nothing more than puppets. Rather than think for themselves, they now express, enthusiastically, the beliefs that are given to them from above...The culture of our managers has changed to one of fear, lying, and cutthroat tactic.” Managers should enthusiastically support the strategy of a company but when is enough, enough? How many of these managers recently said “I do not agree with what I am doing but I am following orders”? This was the main defense argument during the Nuremberg trials [and the focus of the famous Milgram Experiment.

The point I am trying to make here, is the answer to the question: can we still make such a defense argument? And should this question be limited to just geopolitical conflicts and not the sterile corporate world? Jack Welch is quoted as saying “I have always been a huge proponent of candor. In fact, I talked it up to GE audiences for more than twenty years. But since retiring from GE, I have come to realize that I underestimated its rarity. In fact, I would call lack of candor the biggest dirty little secret in business. What a huge problem it is. Lack of candor basically blocks smart ideas, fast action, and good people contributing all the stuff they've got. It's a killer.”

Lack of candor and abstaining from responsibility go hand-in-hand and is pandemic in corporations/organizations throughout the world.]

Before I go any further let’s get some stuff out of the way:

1) Yes Citigroup needs to cut lots of the fat. It is long overdue. When you have 60+ (whatever the #) of IT sites around the US, it does not take a Harvard PhD to figure out what to do there. And that is just one example.

2) These people who are losing their jobs to outsourcing should ask themselves what they would do if they were the CEO and had to produce better numbers. Face it. Outsourcing is here to stay. The same people who are complaining about it are buying Chinese made shirts at Walmart. But...

3) Quality is quality is quality. It does not matter where you manufacture something. What matters is the quality. So if what “Sleepless Still in Ofalon” said was true about the poor quality coming from the offshore work, then it is just a ticking bomb. Customers will start leaving soon no matter how much you pay for marketing. Case in point...

I just had drinks with 3 South African Bank Executives from their Nation’s largest bank. They arrived recently from a long stint in Budapest Hungry before heading back home. When the time came to pay for the drinks this evening, Craig pulls out his Citibank Hungry card. When I acted surprised, he at first proudly proclaimed that he was a Citigold customer but quickly lost his enthusiasm. When I prodded him, he explained that being a Citigold customer in Hungry meant that you “got nice sweets when you visited the branch”, but whenever he called his Citigold Hungarian rep to get balances, he was told to “use the automated telephone banking system”. When Craig kindly asked again for the information, the Citigold rep insisted that he use telephone banking.

Now Craig is not a light weight. He just purchased a big brand new house and a S-class mercedes for his wife...cash. If I was the CEO, and I knew one of my employees handled one of our valued customers this way, I would not just fire the employee but make a public example of him/her. This poor quality is not just limited to Hungry for I have experienced it myself in many places here in the U.S.

Now back to the morale issue...

I agree with “Still in Ofalon” that “Managers who still have the respect of their employees should be brought up to fill that void”. The key here is the word “Respect”. It does not necessarily mean being popular. Sometimes you can receive lots of respect but not be popular. What is important is that you are a leader of integrity, you stand up for who you are and you deliver results. It is the only way to win respect anywhere. Also, being such a leader is the only way to generate “sustainable results” for the business. What do I mean by that? Sure you can be a Mr. Burns (from the Simpsons) and generate lots of profit by squeezing the peons but what happens after a while? The morale goes down, productivity goes down, profits go down. Sound familiar?

Citigroup has the right vision but does it have the right leader[ship]? Personally I like Chuck Prince but the results speak for themselves. Chuck, like many CEOs, who are too disconnected from the “ground floor” lose touch with what is happening. The voice of the employee is a nice idea but not enough. The only 2 things that can save Citi are either:

1) A radical cultural transformation [to one of responsible candor] or

2) A merger with a leading bank (like Wellsfargo) that can break the negative cultural stigmas and managerial and operational redundancies.

# 2 is not simple but easy

# 1 is simple but hard

So a word to the “Cutthroat managers”...

I know you have to sustain your income for your family’s sake but can you sustain a look in the mirror?

Find your True North and go in that direction.

Friday, April 13, 2007