The most exciting times in my career have not been when money was rolling in and everyone around the trading desk was sharing high-fives. It was when we were fighting to survive, when we were huddled in a boat in the middle of the stormy sea. That was the world of Salomon in the mid-1990s, when we were one step away from becoming non-investment grade. It was us against the world.
I visited Citigroup a few times over recent weeks and it reminds me of those times. Granted, it is not the world in which you would want to have found yourself. People have lost much of their wealth, in some cases they have had to make painful shifts in their lifestyle. They are seeing their compensation potential capped while competitors are being unshackled. They would be justified in feeling bitter for taking the brunt of all but criminal behavior by past management, head traders and risk officers.
But there are the seeds of a vibrant risk-taking culture. Not risk taking in the trading sense, but in the sense of moving beyond the complacency that comes with success, of being able to reinvent and create because they have to, and pulling together because there is no other way to survive. Taking the compensation out of the equation, I would take that over the gilded world of a bank that is doing everything right but is entrenched and self-satisfied. (I know someone is going to make an ‘other than that, how did you like the play, Mrs. Lincoln’ comment).
What will Citi look like in 2015? Using the Thomas Friedman approach, extrapolating out from a few random conversations in one corner of the firm, it looks like management is forcing a business focus that Citi has not had in the past. We also might see those who have lived through this crisis and stayed on forge working relationships, communication and determination that will change the core of the firm in a way that can’t be done with big pay checks. (More comments coming).
The Citi of the Weill era brings to mind visions of Jabba the Hutt. Indeed, I devoted a chapter of A Demon of Our Own Design to the inevitability of crisis at Citigroup. And it could have stayed that way for years to come. Surrounded by a sycophantic Board, a stock price languishing and opportunities passed by. Until, maybe decades into the future it would have finally, somehow, sunk under its own weight.
But now Citi has the opportunity to reach back into its genetic pool and emerge with the scrappiness and focus that Salomon had in its heyday. And it has something Salomon never had: a tremendous reach and franchise.