Paying the price of failure

While I feel sorry for Charles Prince, from a business perspective I’m not too sorry to see him leave Citigroup. This may sound harsh; after all I’ve never met him and by all accounts he is very personable and articulate. Nevertheless, his hangdog demeanor since taking charge of the banking giant has done little to inspire the confidence of shareholders (of which I am one) or of the Wall Street analysts. Prince had the air of a French aristocrat waiting nervously for the guillotine with the click-clack of Madame DeFarge’s knitting needles ringing in his ears: a victim of circumstances largely beyond his control, for sure, but a dead man walking nonetheless.

Is it wrong to judge someone on such an arbitrary measure as their bearing? Perhaps. This summer’s sub-prime mortgage crisis was enough to plunge anyone with even a passing interest in the financial markets into despondency, and the subsequent credit crunch has left many besides Prince scratching their heads and asking: where next? However, the former Citi chief’s furrowed brow and hunched shoulders betrayed a lack of confidence in his own ability to turn things around and showed him for what he was: an able executive with a good deal of valuable behind-the-scenes expertise, but who was ultimately found wanting in the toughest job of all.

Could anyone have saved Citi from its current predicament? It’s possible that another, more charismatic chief executive could have stopped the rot sooner and inspired his troops to bigger and better performances, but we’ll never know for sure. Why? Because in a world where compliance and corporate governance are now at the top of the executive agenda, so-called celebrity CEOs – those men and women who light up the markets through the sheer force of their personalities – are in relatively short supply.

In the wake of the Enron and Worldcom scandals, companies shied away from executive flamboyance. The new corporate Puritanism required its leaders to be ethically and financially immaculate in order to survive life under a magnifying glass, and in the age of compliance many companies felt that having big, brash personalities at the helm was more of a liability than an asset.

I can see where they were coming from. After all, a charismatic leader’s not much good to you if he’s serving 25 years in jail for corporate misconduct. And let me make one thing absolutely clear: I’m not advocating a return to the days of the bullying behavior and egotistical excess that characterized the worst of the celebrity CEO offenders; celebrity, by its very nature, suggests a self-centric approach that is ill-suited to running a large corporation, where the needs of the individual come second to the health of the business.

But tough times call for strong leaders, and whilst we’re not quite at a point of economic meltdown, we are entering a potentially tricky period. Business leaders will need to display bravery, confidence and vision – as well as a steady hand on the tiller – if they are to see us through. It’s not so much about being a celebrity as it is about being celebrated: having the respect of your peers and the ability to imbue followers (staff or otherwise) with a sense that you are in control. It was Prince’s failure to exhibit this essential trait of a top-level CEO that led to his departure.