Wednesday, November 26, 2008

Don't Bank On These Guys

I’ve been railing against idiot bankers for years now. Wall Street was driven by greed, dishonesty, and dishonor. The salaries paid were obscene and the arrogance amazing. Watching this latest meltdown from neighboring TriBeCa has been horrendous. I don’t really care what happens to the bankers. In fact, I’m more than a little pissed that so many of them have walked away with fat cat bonuses over the last three years and we found no way to get that money back.

What depresses me is what happens to the average person. Many employees at Saatchi & Saatchi have seen their 401K retirement funds decimated by the greed, stupidity, and arrogance of these so-called 'Masters of the Universe'. And the worst is yet to come. Management around the world are taking radical cost actions to survive. In my job, I get to speak to CEOs all over the world and no matter what business they are in or in what geography, when you ask them this question, “What’s your most important resource?”, they always have one answer - their people. But at the first hint of trouble, the first thing that many of them do is get rid of them, indiscriminately and usually starting with the innocent in the middle and at the bottom, rather than at the top where in most instances the blame lies.

Last week in the U.S., mass layoffs reached their highest level since the recession month following the September 11 attack. Unemployment hit 6.5% in October, the highest rate since 1994. No industry is immune. Chrysler laid off 6,825 people last month, 25% of their workforce. The once mighty Goldman Sachs laid off 3,250 people, 10% of their workforce. Poster child Yahoo laid off 1,500 people, 10% of their workforce. And Merck, once all powerful in the pharma world, laid off 7,200 people, or 12% of their workforce.

My view is that the role of business is to make the world a better place for everyone. The way it does this is through innovation and ideas that create jobs, not by highfalutin, fancy-named pseudo technological financial instruments which destroy wealth, hope, and dreams.


Piotr Jakubowski said...

Its unfortunate that white-collar crime goes unpunished in so much of society today. What I find the most disgusting is how a CEO can do a horrible job, but still walk away with a 7, 8 and even 9 figure "severance pay". Really?

I do like what the AIG chief has done for now. $1 salary with bonuses totally relative to the progress of the company. Though it is a little late now, isn't it?

Tony said...

How about this for a feel good story from little old New Zealand:
A paper mill in a tiny town called Putaruru laid off staff.

Mill workers at a neighbouring town in Tokoroa cut their hours to enable those redundant staff to have new jobs.

Some people are true Lovemarks!

Full story here:

Stijn said...

I couldn't agree with you more. So much people have lost their money because of the greed of bankers and most of these bankers aren't even getting punished while they're swimming in cash...

Pi said...

Bravo! And I don't mean that in any form of celebratory tone KR, but rather in concurrence to your sentiment on the bad ass bankers. Not a fan at all and that pseudo intelligence has blatantly been found wanting. Hopefully this will make people more cautious of what they use as a benchmark to deciding whom is intelligent and who is not as clever.
The damage done is horrendous and not easy to deal with.

Alexander said...


I am totally with you on this one. As a footsoldier for 10 years for two different consulting firms, I have seen management dismiss staff level roles rather than scrutinize manager levels or above. For some reason, a lot of professional services companies find it more acceptable to release employees who are the ones who deliver the work rather than those who are poor managers. I myself have never been made redundant, but I have on more than one occasion scratched my head wondering the rationale for firing people who are solid employees over those mid to upper managers who are either unable to deliver or drive new business. Thank you for posting this, as I have always wondered whether CEOs really thought about this, before they cut 10-20% of their workforce.

Anonymous said...

Perhaps the greatest tragedy of all is the way our society has come to value and adore people who make money through speculation in various markets rather than valuing people who create wealth through invention, creativity nd general productivity that enhances the way people are able to live.
Kelvin Woodley


This is the Kevin I love more.... Can I ask you to post more about this subject?
Banks and politicians, the world had enough of you both. They have put us in the worst economic (not just financial) crisis ever, and what is worst is that they meant to do so, because they knew from the experience that came from ten and more years of zero growth in Japan. We are in “Liquidity Trap” thanks to Bush and the savior Mr.Paulson and his bankers’ fellow to save.
To save some banks that bet on the wrong table we are putting the world in a stand-by mood for nobody knows how long. This will last 10 to 15 years and the growth will be next to zero, like the interest rate. Deflation? The hope is in the people and in the technology that will deliver the tools to shift the power which eventually will be on us. Bankers and politicians can have a rest or they can come and work with me in my new gelato store in Auckland. I would love to see Paulson making gelato instead of making money….……..

Kevin Roberts said...

Thanks Tony, that’s a powerful example of tough times bringing out the character of good people.