That Bad Leader Still Got Paid $46M a Year
I don't pretend to know the first thing about investment banking other than it's a lucrative career. I might get accused of kicking a guy while he's down, but “retiring” investment CEO's get such a golden parachute ($161 Million in pension and stock), Stan O'Neal is hardly “down.”
I wonder if the articles about his leadership used to be glowing, when he was a successful CEO. Now that the firm has suffered a huge loss and O'Neal has been forced out, he's now being painted as a bad leader.
Mr. O'Neal's talent and steely drive came with a tragic flaw: He didn't much engage in debate, kept his own counsel and had little use for the kind of strong-willed subordinates who might have helped him steer clear of the subprime troubles that brought him down. In the early years of his tenure, which began in 2002, Mr. O'Neal purged the firm of many of its longtime senior employees and later fired some of those considered his allies.
“He was uncomfortable around independent people [with] views which might be different than his, and whose loyalty was to the firm rather than to him personally,” said Barry Friedberg, Merrill's longtime head of investment banking in the 1980s and 1990s. Mr. Friedberg retired in 2003, after he tried unsuccessfully to offer Mr. O'Neal advice. (WSJ)
It's a shame, considering that O'Neal is a real American rags-to-riches success story, who started his career at General Motors, of all places.
“During his days in the auto business, an auto assembly-line foreman pointed out Mr. O'Neal's strong Southern drawl. Mr. O'Neal took speech lessons that gave him perfect diction, an associate recalls.” (WSJ)
It's just a shame, though, when you see a leader who isn't strong enough to stomach or stand up to those who disagree with him (or her).
There were signs that he was purging those who weren't allied with him, but the company looked the other way because the results were strong. In the Lean mindset (I guess there is a tie in here), we're not only focused on results, we're also focused on the process and the philosophy for how we get those results. It's safe to assume that the Merrill board consisted of typical management-by-objective types, who only cared about the results. Once the results turned dramatically bad… suddenly O'Neal was a bad leader. Same guy, different results, different judgment from the MBO crowd.
“Mr. O'Neal's aloof management style was on display at the firm's quarterly operations-committee meetings in the boardroom on the 33rd floor of Merrill's lower Manhattan headquarters. Instead of fostering freewheeling interchanges, the meetings were often staged and choreographed, with formal presentations to which Mr. O'Neal would ask questions but rarely entertain discussion, a former executive says.” (WSJ)
I guess the lesson is that we can aspire to be better leaders, through Lean or not. But, is it financially rewarding to be a good (or great) leader?