A few posts ago I commented on how bankruptcy seems to be a new form of business strategy (see The Best Defense is a Good Offense). To me it’s just another case of poor leadership trying to ditch their accountability.
Well, there is another growing trend which defies the “logic of leadership accountability” and it seems to be rampant among large banks in particular. It’s the trend of appointing Co-Heads to run functions or lines of business. Let me translate. It simply means that instead of one person being the Head of Capital Markets or Head of EMEA, there are two leaders. They are called Co-Heads, as in both are leaders of the same business. And it’s quite popular, especially when there is a merger or integration and there are two very qualified leaders for one position. It has recently happened in spades now that there is a new CEO at Deutsche Bank who had made multiple Co-Head appointments. The Co-Head phenomenon is also rampant in another broken financial institution, Citibank.
“Did you hear about the engineer who named his two sons Ed? Why? Because two ‘eds’ are better than one.”
Now having two highly qualified people overseeing and running a large function or department seems like a good idea. Two points of view to help find the best solution; two sets of experiences to make certain nothing is overlooked; two leaders to travel the globe meeting with customers and rallying employees around a common message.
Maybe this is the motivation for the popularity of Co-Heads, but I honestly doubt it. Mainly because the overwhelming evidence is that Co-Heads don’t work! Ask any bank employee and especially the executives who report to Co-Heads and you will hear the same thing (maybe not in the same words):
“It’s a joke! They don’t work together at all nor do they strive for a common view. One is there to make the other look bad so he (she) can get the top job for themselves. And they constantly bad-mouth each other to anyone who will listen.”
So if it has been proven time and again not to work, why continue appointing Co-Heads? There is a simple reason: the CEO is unwilling to make that hard decision!
They are abdicating their leadership responsibility to choose the best team, align them around a common direction and set of values, and go forth to serve the needs of the customer. Instead, they take the easy route, appoint two people and let them slug it out. Survival of the fittest (or the most devious) is alive and well inside of big banks. Great for the CEO who can abdicate his responsibility of leadership so easily, but not so great for employee morale and team alignment. Employees wind up not respecting the two combatants and definitely not respecting cowardly leadership at the top. Another reason why morale and productivity is so poor in our “too-big-to-fail” institutions.
Leadership is about making the difficult decisions that are in the best interests of the organisation for which they have been appointed to lead. Leadership is an obligation, not a position!
The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy. ~Martin Luther King, Jr.
Tight Lines . . .
(for more on the situation of banking today, see The Origins of the Banking Crisis by Demetrie Comnas)