Yesterday, Citigroup went in for another management reshuffle. As a result, it is now on its fifth chief financial officer in five years, and third in the past twelve months. It’s also got a new global banking chief and has lost the head of its Asia Pac group. According to Financial News, 60% of Citi’s senior staff have left since 2006.
None of this is good news for the bank, but it may be bworse news for its employees. In a note yesterday, Rochdale Securities analyst Dick Bove said the key to success at Citigroup is, “not how well one performs one’s duties, it is how well one selects one’s mentor.”
If this is so, the same may apply at Bank of America, where 52% of executives have left since 2005.
Bove says management instability (at Citigroup), ‘is the core reason the firm was functionally bankrupt in the fourth quarter of 2008,’ and will protract its recovery.
He also says Citi’s management style is the antithesis of Goldman’s and Wells Fargo’s.
However, choice of mentor isn’t completely unimportant at Goldman Sachs either. In the Accidental Investment Banker Jonathan Knee describes being mentored by John Thornton and his struggle to adjust to the Paulson era after Thornton’s seemingly political departure in 2003.
The moral of the story is clearly to find a mentor with staying power. At Citigroup this may be easier said than done – the bank is not only rotating senior staff at a rate of knots, but is having a major clear out of middle management.