If you had told me that Countrywide would sell for $7B to BofA out of mercy from a Fed push, I would have laughed at you. But in retrospect I am not totally surprised. Arrogance is the kiss of death for anyone, but corporate arrogance at the executive level is lethal. I saw it at WAMU when they bought NAMCO ( and that sack of **&?* Killinger is still in the job- that's who the pension people should be going after!!) and I saw it on my first interviews and every meeting subsequent at CW. Long term successful leadership does not possess arrogance; confidence yes, but not arrogance. What is arrogance? Not listening to the people who really do the heavy lifting, not thinking that the rules apply to you, not listening to dissenters, no matter how rabid, for kernels of truth in what they are saying, only promoting those who tell you what you want to hear and do it your way -- thinking you know it all and have it all figured out.
It would be easy to be Angelo, Dave, Drew, etc and be sitting there today blaming the market for their demise. There are lots of other institutions like them that have fallen here. You can say you are a victim of circumstance or take a good hard look at yourself. The fact that your company has a DNA making it susceptible for rot or cancer means that at sometime it will catch up with you; especially if you ignore it and live a bad life. Angelo's DNA allowed it, and his offspring fostered it. Now it has taken its toll.
What will happen? Same thing that happens when a big bank buys an entrepreneurial company; they will slowly take it apart and force it to behave like them. Two years from now less than 25% will be left, mostly in servicing and IT. Luckily for BofA there are few employment options to go to right now, and there probably won’t be for a while. Eventually the street firms will come back and compete with a large view on the world and pick up many of these disenfranchised leaders - but it could take a long painful pause to get there. Plus you would have needed to put away a lot of dough to stay on the side, which is very un-mortgage like.
So would you rather be Angelo or Howard Schultz? Howard is the CEO of Starbucks who returned this week to the helm of the firm he founded. I had been reading about Howard recently in a great book "True North" by Bill George (ex-CEO of Medtronic). In there it says,
"Schultz started his career at Xerox but felt the environment was too bureaucratic and rigid for him to flourish. While others thrived in the Xerox culture, Schultz yearned to go his own way. “I had to find a place where I could be myself. I could not settle for anything less. You must have the courage to follow an unconventional path. You can't have value or measure your life experience in the moment, because you never know when you're going to find the true path that enables you to find your voice. The reservoir of all my life experiences shaped me as a person and a leader.”
Schultz was driven by a father who he saw beaten down by 30 brutal blue collar jobs where he was under paid, unappreciated and without benefits or profit sharing. So he saw in Starbucks a company he took over, not started, an opportunity to do the right thing.
"The event of seeing my father broken by these jobs is directly linked to the culture and values of Starbucks. I wanted to build the kind of company my father never had the chance to work for, where you would be valued and respected, no matter where you came from, the color of your skin, or your level of education. Offering healthcare was a transforming event in the equity of Starbucks brand that created unbelievable trust with our people. We wanted to build a company that linked shareholder value to the cultural values we create with our people."
Starbucks is known for having employee turnover less than half of its peers. People love working there. CW has many long term employees but very high turnover. Many areas greater than 50%. Angelo may have more money but I would rather be Howard....
To Countrywide or BofA folks out there, hang in there till you see how it plays out. Don't listen to the recruiters out there spinning their rumor mill. But take a hard look at yourself first and ask yourself where you should be personally, and whether you should have made a different choice of path well before this drama unfolded... ‘stay money’ only increases the guilt and confusion. Take control of your life and don't be a victim. Staying may be the right choice, but don't do it for the money. You are worth more than that....
Well said Brian. During my 27 years in this business I have seen arrogance cause the demise of many. Your critical point is for one to recognize the difference between confidence and arrogance. Confidence leads, arrogance enslaves. If a Loan Officer, or any employee for that matter, has confidence in themselves, and the company they work for, life is enriched in all aspects and true success for both is the natural result. Look forward to your next posting.
Posted by: Gina McCulloch | January 14, 2008 at 01:50 PM
Brian, thanks for sending me this blog. I especially liked the last paragraph. I think it sums up the bulk of our industry right now.
Posted by: Frank Mancino | January 14, 2008 at 04:28 PM