A Bullying Boss Leads to Financial Meltdown?


Michael Lewis on A.I.G. | vanityfair.com

I've been a big fan of Michael Lewis and his writing since reading “Moneyball: The Art of Winning an Unfair Game” years ago. Great book and my first introduction to the Red Sox's great Kevin Youkilis.

I'm not normally a Vanity Fair reader, but I stumbled across this issue in print and was engrossed by the story of why A.I.G. collapsed.

Could it really all come down to one “leader” being a bully and, as Bob Sutton would say (in an academic sense) an asshole?

It seems that there was a fateful change of leadership (and leadership style) at AIG:

At the end of 2001 its second C.E.O., Tom Savage, retired, and his former deputy, Joe Cassano, was elevated. Savage is a trained mathematician who understood the models used by A.I.G. traders to price the risk they were running—and thus ensure that they were fairly paid for it. He enjoyed debates about both the models and the merits of A.I.G. F.P.'s various trades. Cassano knew a lot less math and had much less interest in debate.

So he wasn't a great financial mind, but Cassano especially seemed like a bad leader:

…a guy with a crude feel for financial risk but a real talent for bullying people who doubted him. “A.I.G. F.P. became a dictatorship,” says one London trader. “Joe would bully people around. He'd humiliate them and then try to make it up to them by giving them huge amounts of money.”

A lot of us (myself included) who worked for a bully who acted this way to some extent. Not the type of environment where quality work can take place, eh?

Another former employee piled on:

“The culture changed,” says a third. “The fear level was so high that when we had these morning meetings you presented what you did not to upset him. And if you were critical of the organization, all hell would break loose.”

There are more examples in the story, many of which include language I'm not going to reprint here.

So with an environment like that, you wonder why people might take risks and do questionable things in the name of keeping the boss happy?

Hit the number, no matter what. Don't question the boss.

It's a recipe for financial meltdown, apparently.

Will we ever learn? Dr. Deming said the first job was to eliminate fear. Wall Street didn't listen.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

  1. Mark Welch says

    Glad to see you posting on this topic, Mark (office bullying). I'm sure most all of us have encountered this behavior and the dysfunction it leads to at one level or another where we've worked. What I've often wondered is where is the leadership from the Boards or HR Depts. to deal with it? Do they not even have a finger to the pulse of the organization, or worse yet, know about and give it tacit approval?

    The wreckage goes far beyond what it does to the organization. This behavior takes a toll on personal health in the form of stress and extends to the family lives of the employees when that stress expresses itself at home. As a former HR person myself, I think there should be zero tolerance for bullying in the workplace.

  2. Mark Graban says

    The issue of bullying is talked about more publicly in the UK, as I've heard when I've worked there. It's not that I'm a bully, trust me!! (You know this, Mark. W.)

    But it's in the media, it's on signs at the hospitals, that they should have zero tolerance for bullying.

    There's a whole "Workplace Bullying Institute" if you can believe it:


  3. CHris says

    Definitely poor leadership, but also poor succession planning. This is an area where Toyota also does well, it seems (so far).

  4. Bob Emiliani says

    Mark – Many thanks for posting this. For years I have been using articles like this in my graduate Lean leadership course to teach the difference between Lean behaviors and "behavioral waste," and the consequences of these "fat" behaviors on the 5 key stakeholers. In the past I have used Al Dunlap and Linda Wachner as cases becasue there has been such a wonderful, extensive published record on their bad behaviors.

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