Just how has referring to competitors as enemies whose “throats” must be “ripped out,” telling employees to act as though they are “at war,” and, on at least one occasion, making a visit to the trading floor to put his second-best earner’s tie through a shredder, in front of everyone, to make the point that “second best isn’t good enough” helped Dick Fuld to avoid the gigantic writedowns that have plagued Merrill, Citigroup and UBS, the hedge fund failures that have made a joke of Bear Stearns, and the accounting scandal that was Goldman third quarter earnings? How about because all of that is enough to scare the shit out of anyone, especially the people within arm’s length of the guy, into not fucking things up? Nobody wants to be the guy to tell “Gorilla” that things didn’t go so well this quarter, and while everyone else was having a pissing contest to see who could do the worst, Lehman’s minions were being intimidated into not having as horrible a Q3 as their “enemies,” if not necessarily an amazing one (earnings fell 3 percent, to $887 million, and there was a $700 million write-off). Even Mike Mayo, who’s intimidated by no one, gave the credit to Fuld, saying that the outcome was “helped by having one of the most consistent cultures on the Street—one C.E.O. for over a decade, a one-firm mentality and comprehensive risk management,” probably out of fear. Former colleague Stephen Schwarzman, who seems like the kind of guy who would be too petty to give someone else credit for anything, went out of his comfort zone to call Fuld “a survivor” and opine that “he’s got a sixth sense of when things are turning on you,” though, admittedly, Schwarzman’s praise-inducing intimidation could stem more from the height differential than anything else.
But a New York Times profile suggests that Fuld is losing his taste for human flesh, which could mean disaster for LEH. Examine the facts:
- When asked how he felt about “the war comment” from last year, Fuld shifted in his chair and said, “I don’t like the war comment…‘war’ connotes that we are trying to kill our enemies. That’s not the view that I want them to have.”
- After feigning offense at the accusation that he’s “mellowed,” Fuld “paused to collect his thoughts.”
- Then he said: “I think I have many of the same reactions; I just handle them differently…I’VE LEARNED, IN ALL FAIRNESS THERE IS ANOTHER VIEW.”
And the most egregious ?
- Lehman’s president, Joseph M. Gregory, says that Fuld “has improved” his attitude and “made it more comfortable for people to speak.”
This is a phenomenon the must be cut off at the knees (which the old Fuld would’ve already done, without compunction). It’s only a hop, skip and a jump from people not soiling themselves in your presence to Merrill Lynch.
The Survivor [NYT]
Posted by Random Banker, Oct 29, 2007 5:13PM
Heh? Is this good or bad. I'm pretty sure everyone was fucking afraid of Stan. He'd fire you just for looking at him funny and purge your whole group if they protested.
Being brutally violent toward your underlings only leads to fear and mistrust. Stan got the benefit of the doubt (from me) because people had out the long knives for him from day one, so he had to rule with an iron hand. But long term these dysfunctional cultures contain to seeds of their own destruction.