I have just finished reading an article in the New York Times outlining the recent goings on at AIG in the USA. This has led to the dismissal and resignation of Maurice Greenberg as both CEO & Chairman of the company. In reading the story I have been left wondering how someone who was one of the leading strategist and strategic thinkers of his day could be so short sighted. The bottom line in the Greenberg saga is that he didn’t adjust his way of working when the post-Enron world around him required it. His ego was such that he….
thought that the changes in the world applied to others, but not to him.
Fundamentally though Greenberg’s downfall was related to the fact that his leadership style was antiquated and ‘dinosaur-ish’. He treated everyone around him with disdain and disrespect. Even his two sons who were brought into AIG to be his successors eventually left and joined competitors because of the manner in which he treated them.
In the Sarbannes-Oxley world nobody can flout the rules and get away with it anymore. With New York attorney general Elliot Spitzer targetting celebrity CEO’s one of the things that someone in Greenberg’s position could least afford to do was alienate the team around him, because he would ultimately need their support under fire. But, Greenberg treated them like dirt and now he is reaping the consequences. As he faces charges and indictments on fraud and governance issues, the one thing he can expect is that nobody will rally around him to support him…..he has burned those bridges.
Why do I call Greenberg and those like him dinosaurs? Because they are living and acting as if they are still the dominant species on a planet that is terrified of them. In the industrial world of executive chairman who were ‘gods’ that Greenberg grew up in, it was possible to bully your way from $14Million profit in the 60’s to $11Billion profit last year. Not only was it possible but in that world you were canonised as a celebrity and hundreds of other managers strived to be like you. THE WORLD HAS CHANGED- THERE IS A NEW DOMINANT SPECIES!!!! As the Greenbergs of the world are removed from the corporate landscape by the scandals they create for themselves expect the best leaders of the new species to be largely invisible. The best leaders will be those you don’t see, because when you look for them they will be hidden behind the team that he / she has built around themselves. And expect this team to sacrifice themselves for their leader – not because they are told to or made scapegoats, but because they want to.
