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The words might have been different, but the message to these underperforming leaders was the same
Jim Balsillie and Mike Lazaridis (Research In Motion, January) “There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership.” —e-mail to employees from Balsillie and Lazaridis Keyword: Recognize The co-CEOs recognized that the 90% collapse in RIM’s share price meant BlackBerry might be losing its cachet. They recognized that shrinking market share might mean consumers are opting for Apple and Android. And they recognized that delays with BlackBerry 10 might be sending RIM into the abyss.
Robert Diamond (Barclays PLC, July) “I am sorry that some people acted in a manner not consistent with our culture and values.” —letter to employees from Diamond Keyword: Values It’s hard to know what is meant by bank values, given recent trading snafus, fraud charges related to mortgage-backed securities and, yes, bailouts. The scandal over the manipulation of the Libor rate further complicated matters. Diamond’s job went kaput after the bank’s $453-million settlement with regulators. He won’t be the only casualty.
Steven Freiberg (ETrade Financial, August) “The board believes it is an appropriate time to transition...to a new leader to guide the company through the next phase of its evolution.” —statement by chairman Frank Petrilli Keyword: Evolution Evolution doesn’t always make things better, as any flightless bird will tell you. ETrade’s share price has wilted 80% in five years as trading dried up and commissions fell. In 2011, the firm rejected a request from its largest shareholder to put itself up for sale, preferring an overhaul—including a new CEO.
Vikram Pandit (Citigroup Inc., October) “Given the progress we have made... I have concluded that now is the right time for someone else to take the helm.” —Pandit, speaking on CNBC Keyword: Progress To his credit, Pandit kept Citigroup alive during the financial crisis (with the help of a $45-billion bailout). But during his five years at the top, the share price fell some 90%, the dividend was shredded and the bank failed a recent stress test by U.S. regulators—whoops! At least Pandit had one thing right: It was time for a new leader.
(Doug Mills/The New York Times)
Christopher Kubasik (Lockheed Martin, November) “I am deeply disappointed and saddened by Chris’s actions, which have been inconsistent with our values.” —outgoing CEO Robert J. Stevens Keyword: Inconsistent For a company shunned by ethical investors over its armaments business, Lockheed sure demands a strong ethical code of behaviour from its people. Kubasik resigned after acknowledging a close personal relationship with a subordinate, before he even assumed the top job. Perhaps ethical investors should take another look.
Robert Dutton (Rona, November) “Robert was a pioneer and has been an inspiration for generations of merchants, managers and employees at Rona.” —statement by chairman Robert Paré Keyword: Inspiration Dutton also inspired competition—and a takeover offer from Lowe’s. Rona rejected the offer, arguing that shareholders would be better served if the company focused on executing its business plan. How has that worked out? The share price fell 40%, and Rona reported an 89% dip in its third-quarter profit. Hardly inspirational.
(John Morstad/The Globe and Mail)