Advice for Vikram Pandit, the New CEO of Citigroup
Note: This was written by Dan Ciampa and Michael Watkins. Dan is a leading advisor to CEOs and the author of Taking Advice: How Leaders Get Good Counsel and Use it Wisely.
Dear Mr. Pandit,
The decisions you will make during your first few months on the job will have a decisive impact on whether you ultimately succeed or fail. Your transition period is a time of opportunity, but also great vulnerability, in part because you are expected to change Citigroup in fundamental ways. Based on our research and experience working with CEOs in transition, we have developed the following set of guidelines for that will help you to create momentum during your transition.
Identify the critical alliances.
To transform their organizations, new CEOs must gain the support of powerful internal and external constituencies. Influential players must perceive it to be in their interest to help realize your goals. You must therefore begin to identify them and at least begin to gain their support during the transition. Doing so lays the groundwork for building coalitions to drive key initiatives. It also will enable you to decide not only whom you can count on, but also who you need to invest in winning over -- and who you need to confront. Typically, a relatively small percentage of managers will be either very supportive or very opposed at the outset. Most will lie between these extremes. Neither dedicated supporters nor implacable opponents, they will be undecided and, hence, persuadable.
Get the right top team in place -- fast.
Like most new CEOs, you will inherit a group of senior executives. Some will have the knowledge, skills, and background needed to drive the business forward. Others will not. Some may have aspired to the CEO slot, perhaps even have been told that the job was virtually theirs in the past. Others may have hidden agendas because you represent a potential threat to their positions and power. All-too-often, new CEOs find that “senior team” is less than descriptive of reality. If your assessments are negative, you will confront the dilemma of either staying with people who are less than what you need or making a change early in your tenure. The decision to remove a senior-level manager is among the most serious and complicated that any leader makes. But among the most common regrets CEOs have is not replacing senior-level people once it becomes clear they are not the right fit for the situation and for the CEO’s style or vision. Don't let it happen to you.
Secure early wins.
To create momentum, you must secure some early wins. Bringing the wounded SIVs onto Citi's balance sheet may be a start. But by the end of the first six months, at the most, you must have made substantial progress in addressing some of Citigroup's most pressing problems. This means marshalling resources to focus on issues that meet three criteria: (1) they yield tangible financial benefit, (2) they address issues that employees understand to be important, and (3) results can achieved early in the new leader’s tenure. New CEOs secure early wins by identifying substantial problems that can be tackled in a reasonable period of time and whose solutions result in tangible operational and financial (not just behavioral/attitudinal) improvements in performance. Critically, your early-win initiatives should focus attention on the vital few issues that you believe to be central to your agenda. In doing this, you should seek not only to get results, but also to set the right tone and to energize employees.
Lay the groundwork for effective communications.
New CEOs prepare for derailment when they fail to get their messages about priorities across, to convey the values that they hold as important, or to clearly define expectations. As a result they create vacuums of understanding and emotional connection that undermine their effectiveness. Why? Because no one associated with the organization views your transition with indifference. Everyone is parsing your actions and words closely and critically, hunting for signals of direction, purpose, motives, and, especially, for the answer to “who is this person?” Leaders lay the seeds of their own destruction when they fail to gain control of the communication processes of the company. As a result, do not effectively get their messages across to the people whom they most want to influence; nor do they shape the mood or morale of the organization.
Shape your vision.
The term “vision” has been watered down to the point where is can mean everything or nothing. Often it is used to describe the overarching objectives leaders want to achieve, or the organization’s mission statement. All too often these are mere slogans or lists of desired objectives or “values” that are put up on the wall and left on coffee tables in executive waiting rooms, but have little impact on behaviors and attitudes in the organization. What we mean by vision is a vivid mental image that depicts your view of the desired future state of the organization in an inspiring way. It is not a statement of mission, a set of objectives, or a list of values. It is a picture of what will be seen, heard, and felt when the organization fulfills that mission, and achieves those objects. It’s about the desired culture, perhaps including embracing a return to traditional values. If it’s not inspiring, for the leader and for key people in the organization, then it’s not a vision.
Build and use a balanced advice network.
Finally, and perhaps most important, you have to build and use the right kind of advice and counsel network. No leader is an island. New CEOs cannot succeed alone in overcoming the complex and sometimes chaotic challenges of taking over large organizations. You have inherited problems and mistakes (known and yet to emerge) left over from your predecessors. Given that you are coming in from outside, these problems and mistakes may be far from obvious; things rarely are what they appear to be. So is essential that you find ways to accelerate learning about markets, products, technologies, organizational capabilities, team, politics and culture. Identifying and leveraging the best advisors -- internally and externally -- is the most effective way to do this.
While adhering to these guidelines is of course no guarantee of success, the failures of new CEOs usually can be tied to violating one or more of them. Don't let it happen to you!
Sincerely,
Dan Ciampa and Michael Watkins
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Michael Watkins is Professor of General Management at 
Comments
A new leader generally not required to revamp the agenda of the organisation that is already well established.The important thing is to have a different vision of ahieving the same.Clear message of this vision has to percolate down across the rank files.The reengineering of the process with in the organisation to manifest the vision greatly energizes the organisation and create profound impact on internal and external environment by signalling that new leader is on differrent path.
- Posted by Nagendrakumar
December 20, 2007 7:22 AM
These are some of the most important guidelines for any new CEO in an organization. It is very clear that CITI group has some of the best talent available in the market. Perhaps CITI bank did the right things in the light of the knowledge available in the past. Mr. Pandit will have to work on cultural, structural and motivational issues in the organization. Motivation level will be low in the top management for the past mistakes and they need to be reassured that they can still do the right things. Mr. Pandit also need to make some structural changes. He may have to bring some outsider or may have to change designation of the internal management to perform better.
Regards,
Satyendra
http://ceospeaks.mrkconsultancy.com
- Posted by satyendra gupta, PMP
December 22, 2007 3:37 PM
Dear Mr. Pandit,
I may be of help to your company by giving some simple
suggestions which i know is beneficial to your company.
To introduce myself, I am Mr. Renato L. Tuddao,a Relationship Manager in one Universal banks here in the Philippines,I am a Certified public accountant.
Sir,
1. Maybe you need to do some review on your senior officers
performance.
2.I think you need to have a New Vision of what will happen in the next 90 days in the job.Yes this is a critical period for you.
3.Set a meeting with your senior officers and ask them of their commitment for the company.
4.Tell them to move fast,otherwise they will experience abandon ship.
5.Review what happened in the previous months,the cause of the problem and how to address this problem so that it will not happen again.
6.Set a target for each Department to its senior officer to accomplish.
7.Review also the expenses and reduce it and concentrate more on how to arrive at a healthy income for the company.
8.It is possible also to offer early retirement for senior officer who are productive.
9.Look for better investments which you think can propel companie's funds more productive.
10.I suggest you to designate somebody to give a report on the financial status of the company everyday for you know where are you now in the industry.
11. I suggest also further Seminars and trainings for your officers,maybe they have still the Old school of thought.
My suggestion maybe simple but it may help you.How i wish,I am an employee of yours to give some feedbacks on how to help the company.
Sincerely;
Renato L. Tuddao
1 ilang-ilang St
Sn. Gabriel Village
Tuguegarao City
Philippines
Mobile#+639183890647
funds
- Posted by RENATO L. TUDDAO
December 23, 2007 6:20 AM
In additon to what has been said above, I would also suggest measures to bring back the employee pride. It is an essential most element to add momentum and motivation into the pot.
However, I find it rather patronising when the author is suggesting to accelerate learning about markets and products, everything else I agree with, but considering Vikram's profile, I do not really think that he needs a crash course re markets and products.
Faisal Danka
http://faisaldanka.wordpress.com
- Posted by Faisal Danka
December 25, 2007 12:21 PM
Mr Pandit must already be familiar with Citi, the challenges Citi faces. He has I presume already decided on which of the portfolios to keep and which to divest, this itself will decide the composition of the management team.
The challenge he faces is how to channelise Citi's aggressivesness, so that it doesn't get into the mess it is already in
- Posted by Krishnan
January 11, 2008 2:24 PM
On Get the right top team in place -- fast. I think most new leaders fall into the traps of "Be a Good Leader" and "I can change these people" and give more than needed chance to the old team. Change on the top is needed ASAP to set the tone, so the new leader should not worry much about the Personal Image and get the Right People "On The Bus" and Wrong People "Off the Bus" quickly.
- Posted by JAZ
January 25, 2008 1:54 PM
Hello,
I think new leader must begin with high motivation level.Create new teams or revive with people with such a optimistic attitude who want nothing but the best from themselves and they should be inspired by a vision.
Placing such people in right place will itself take care of most of the prospect problems in future.Only people makes the difference.
Wishing you a bright future ahead Mr.Vikram.
Dhirendra Singh
- Posted by Dhirendra Bikram Singh
February 27, 2008 2:09 AM
Hi,
One more thing to take care of, to become a highly effective leader is the best way to expect the positive outcomes from the people and the industry.
Regards
Dhirendra Singh
+919910493861
- Posted by Dhirendra Bikram Singh
February 27, 2008 2:13 AM
Vikram,
Citi is not as great a company as it once used to be in terms of customer satisfaction or innovative new ideas. Many years ago if you walked into a CitiBank office you were pleasantly greeted with a change from the monotony of the other banks. People then working at Citi were really an energetic bunch. Over the years what I have seen first hand is that the Citi employees are just doing their job. The passion is missing in their work. On the contrary BOA has employees all energized and ready to add business.
I have friends at Citi and all of them tell me the same story as to why this is the case now. There is WAY too Much Politics happening at Citi. This happens for a lot of reasons. At Citi it is because you have a bad Manager-Employee ratio and Manager-Manager ratio is not correct either. It is better to hire a few good people than to hire an entire useless bunch.
The other thing is the culture at Citi gives a creepy feeling to its customers specially when they are charged all the millions of hidden fees and then have to face a customer service that sucks at best.
Of late I have not heard of a single good idea from Citi, compare that to the Keep the Change Drive at BOA or the No-Commission Trades or simple and elegant loan system at BOA.
The focus on good customer service is a key to any bank. I was offered $200 to open a Citi bank account recently but I went for a BOA account. Why? Because I do not trust my money with a bank that I have had experience charging me $5 once in a while. I bet that is a story with a lot of other customers too.
I wish I could say that this is true only here in the US but I have experience similar fate with Citi branches as far as India. That tells me that there is a fundamental flaw in your companies culture. And a change in culture can only start at the CEO level.
I know its a tough time for your company but dont forget that a cultural change can bring long term prosperity to Citi.
Best Regards,
Sumit
- Posted by Anonymous
March 20, 2008 3:25 PM
Dear Mr. Pandit,
Wanted to wish you all the very best in your challenges ahead.
I hope your decisions finally bring back Citibank to its good health, growth and finally add prosperity to all its stakeholders.
Best regards,
Sunil Thawani
Dubai.
- Posted by Sunil Thawani
April 22, 2008 2:30 PM
Good article with important points for any CEO and new leader of a team. Of particular import is the reference and guidence regarding Vision. In working with CEO's and executive teams for over 25 years this is one of the most often misunderstood and common mistakes made. As a consultant, my accountability is to define the concepts of Vision, Mission, Strategy, Tactics, etc and coach the team and individuals to clearly indentify their content for each.
- Posted by Bill Shepherd
April 22, 2008 3:03 PM
Vikram Pandit has proved to be a pretty ineffective CEO, fact - limited action on his part means a declining share price, which in turn means continuous pain for shareholders like myself..
I have some very critical questions:
a) Why did the board of Citigroup appoint someone with such limited senior management experience in investment banking to take over a mess such as that which exists in Citigroup?
b) Why did this board not choose someone more qualified, knowing that if they did not appoint someone that is highly respected by Wall Street, the share price would suffer further?
c) And of course, why has Pandit done so little when he could have done so much? Thus far, the changes have been ineffective, and anything short of radical will mean further share price declines..
Come on Pandit - get your act together. If not for your own reputation, then for others whose personal fortunes are dwindling by virtue of their holdings in your bank!
Sincerely,
David Tan
- Posted by David Tan
June 8, 2008 7:26 PM
Vision and strategy are relevant factors in any CEO's success.
In Citi's case, how about getting to the sources?
I'm sure Mr. Pandit started off by talking with key share holders like Al-Waleed who saved the company in early 90's and working with Charles Prince and board members to better understand the pain.
According to David Tan, a share holder, not much has been done to raise any value.
How about getting back into insurance business?
- Posted by Ajay Hayer
July 23, 2008 7:19 AM