Looks like Merrill Lynch CEO Stan O’Neal is on his way out, as Merrill is taking an eight BILLION dollar write-off on mortgage-related securities. Here’s the most telling comment from the Wall Street Journal article:
Some former colleagues say Mr. O’Neal’s talent and
steely drive came with a tragic flaw: He didn’t much engage in debate,
kept his own counsel and had little use for the kind of strong-willed
subordinates who might have helped him steer clear of the subprime
troubles that brought him down. In the early years of his tenure, which
began in 2002, Mr. O’Neal purged the firm of many of its longtime
senior employees and later fired some of those considered his allies.
"He was uncomfortable around independent people [with]
views which might be different than his, and whose loyalty was to the
firm rather than to him personally," said Barry Friedberg, Merrill’s
longtime head of investment banking in the 1980s and 1990s. Mr.
Friedberg retired in 2003, after he tried unsuccessfully to offer Mr.
A while back I quoted Gary Loveman, CEO of Harrah’s:
"… all organizations seek to please the leader, so there is constant
pressure to give my otherwise lame and ill-considered view far more
gravitas than they deserve."
The moral is simple. If you want to avoid $8 billion write-offs and being sacked, make sure someone in your organization is willing to tell you that you’re wrong. If you are a board member, don’t hire a CEO who won’t listen to differing opinions.