Failing Up

There's a bad rash spreading right now in leadership circles. It's called "Failing Up." Beware. Unfortunately, or fortunately depending on your view, there's nothing to keep the rash from spreading.

Our top aggravator is Erin Callan, the maligned former CFO of Lehman, who last week joined Credit Suisse where she'll be in charge of hedge fund operations. Now there's a transition to write home about. "Look Ma, one bank fired me but another just hired me. Ain't life grand?"

Next is the entire enterprise called Citigroup or Citibank or whatever it operates as now (Citi-Sovereign?) You know you're living right when you report a $2.3 billion loss and somehow that leads to a market bump because performance came in above expectations. Yes, these are tough times on Wall Street. We get it. But why does the bar keep dropping lower and lower? Oh, that's right. No real bottom to the market has formed yet.

Out in the, ahem, Real World (somewhere between Wall Street and Main Street), Failing Up features a raft of characters trying to paddle their way through the current mess. These include but aren't limited to:

• Rick Wagoner, CEO, GM. Is it just us, or this guy so toast that no one will state the obvious?
• Lanty Smith, Chairman, Wachovia. While some may say this selection is unfair, here's what needs to be answered but rarely ever is. Who was guiding the board when all the bad decision-making was taking place that led to the current huge losses? Who was supposed to hold management accountable to their actions? Why did it take so long to see the obvious, which is now playing out like another bad movie that we've already seen? Find some answers and you, too, can fill in the "Failing Up" puzzle.
• Patricia Russo, Alcatel-Lucent. Now here's an example of how to fail up and stay there for awhile. This tenure is downright amazing by modern CEO performance standards. Full disclosure: Russo is the only survivor from a previous installment of TGR's "Watch to Oust" list. Congratulations!
• Any and all so called leader that is either currently or formerly associated with Fannie Mae, Freddie Mac, Sallie Mae and Smelly Hay. Ok, sorry, that last entity was fake for comic relief. To understand scope of the mortgage mess and the government's implicit role in propping up lenders requires suspension of free market beliefs. Currently proposed congressional legislation is beyond fleecing; it's more like robbing the last guy standing, Us!
  

Anyone who would like to challenge this last point or any of other content is welcome to do so in the comments section. We always welcome counterpoints.

In the meantime, watch for signs of a bottom in the leadership market. That's right. The key word is "watch." Much like what's going on in the financial markets, we're not saying one has formed yet or has even shown signs (unlike another CEO who thinks one is "close." Whatever.)

When a bottom does form, look for boards to start accelerating their change and succession plans.

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