BLOG VIEW: You don't need to be an ichthyologist to know that a fish rots from the head down. And the distinctive piscine aroma that permeates too many troubled companies can be traced to the offices of the executive leadership, commonly known as the ‘C-suite.’
The sourest aspect of the C-suite occupants is their inability to recognize that their poor judgment can lead a company off the rails. This happened on a grand scale in the run-up to the 2008 economic crash, which was fueled in large part by the ineptitude of many of the financial services industry's prominent executives.
Unfortunately, the lessons of 2008 were not absorbed by many of today's C-suite occupants. Here's an industry case study of one C-suite character – we'll call him the ‘chief bumbling officer’ – whose reign of error is having a deleterious effect on his corporation.
Problem No. 1 – A Separate Clock. In our scenario, the chief bumbling officer's staff is expected to be at the office before the dawn's early light and is often found past sunset. The chief bumbling officer, however, seems to be oblivious to the corporate clock: he ambles in around 10:30 a.m., departs for his lunch hour at noon – his idea of an hour is 75 to 90 minutes – and he's out the door before 5:00 p.m. Needless to say, you have a better chance of finding Amelia Earhart than pinning down the chief bumbling officer in his office.
The result of this problem, of course, is grumbling among corporate staff about unfairness – especially for those who have to labor into the night and, sometimes, on weekends without receiving paid overtime. Rather than set an example of hard work, the chief bumbling officer gives the impression that life in the C-suite is a lazy man's paradise.
Problem No. 2 – Antiquated Automation. In regard to the company's technology set-up, it appears that the chief bumbling officer has received his IT advice from the flamboyant rocker Prince: the office is wired like it's 1999. And while no one is arguing that companies need to acquire every new tool, software or gadget that rolls out of Silicon Valley by way of China's factories/gulags, having a company that has a stodgy and outdated high-tech set-up creates problems rather than solutions.
Not surprisingly, everyone in the chief bumbling officer's company knows that the automation is outdated – and they grimly wrestle with the inadequacy of their system on a daily basis. But the few brave souls who try to explain this to the chief bumbling officer are met with a curt response of ‘It works fine.’ Thus, other companies in the space enjoy cutting edge technology while the chief bumbling officer's staff gets cut down by their competition.
Problem No. 3 – An Unwillingness To Go Further. The current regulatory burden does not encourage lenders to be daringly experimental in their product offerings, but that doesn't mean plain vanilla is the only flavor to serve. A number of other products – mostly of a niche nature, admittedly – are available to be offered, and the correct launch and marketing of these products could create a new revenue stream.
But trying telling that to the chief bumbling officer. Whether he's too comfortable within his tried-and-true zone or whether he is displeased that junior staff members are coming up with bold ideas, the chief bumbling officer is not interested in even considering the possibility of introducing something different. And when the brave junior staff members try to explain the possibilities of these new products, the chief bumbling officer usually half-listens and avoids making eye contact by looking beyond the presentation, as if he is scanning the distance for the arrival of an overdue bus.
Problem No. 4 – Olfactory Malfunction. Whether it is a sense of genuine obliviousness or deliberate stubbornness, the chief bumbling officer will not acknowledge that his company is in peril. Even if the warning signs are too obvious – a high turnover of employees, shrinking market share, diminishing revenue, the inability of the company's new business representatives to get their telephone calls returned – the aforementioned smell of rotting fish is not detected in the chief bumbling officer's nostrils.
In the course of my career, I've worked at companies that went out of business because they were managed by people that displayed many of the characteristics of the chief bumbling officer that I described. If you recognize anyone in your C-suite that resembles the character that I created here, you need to ask yourself: can my company survive for the long haul with such a person at the helm?
For the financial services industry, having this type of person in an executive position is a disaster just waiting to happen. If anything, the most important lesson of the past few years is having competent leadership in the C-suite. After all, if the C-suite denizens of the major financial institutions were able to do their jobs correctly prior to 2008, Richard Cordray would be found today chasing ambulances in Ohio.
– Phil Hall, editor, MortgageOrb
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