If you're looking for a textbook example of how to be a dangerously ineffective leader, look no further than the great writer Michael Lewis' article, "The Man Who Crashed the World," in the current issue of Vanity Fair. It's the story of a guy named Joseph Cassano who ran AIG Financial Products from the end of 2001 to 2008 when his unit helped crash the global economy. Based on reporting he undertook after receiving a few phone calls from a former AIG FP trader, Lewis details what can happen when what he calls a "cartoon despot" ends up running something important. It's an amazing article and worth your time. If you want my Cliff Notes version of how to lead your team to a $182 billion loss, read on.
What most people probably don't realize is that AIG Financial Products began in 1987 and, for 15 years, managed risk in a reasonable way by insuring the debt of blue chip firms like IBM and GE. Under Cassano, AIG FP moved into insuring subprime mortgages to the point where those mortgages represented 95% of the company's portfolio. To simplify a complex story, people below Cassano started to see huge impending problems with this but could not get him to listen to them.
This was the pattern that had been established by Cassano over his years heading the unit. His game was to bully, scream and intimidate his staff into submission and then make sure they were very well compensated to incentivize them to put up with him. Here's one paragraph from Lewis' article in which people who worked for Cassano explained what it was like to work for him:
"The culture changed," says a third. "The fear level was so high that when we had these morning meetings you presented what you did not to upset him. And if you were critical of the organization, all hell would break loose." Says a fourth, "Joe always said, 'This is my company. You work for my company.' He'd see you with a bottle of water. He'd come over and say, 'That's my water.' Lunch was free, but Joe always made you feel he had bought it." And a fifth: "Under Joe the debate and discussion that was common under Tom [Savage] ceased. I would say what I'm saying to you. But with Joe over my shoulder as the audience." A sixth: "The way you dealt with Joe was to start everything by saying, 'You're right, Joe.'"
Just in this one excerpt we have a succinct list of what insecure, lousy leaders need to do if they want to destroy their teams and their organizations:
- Intimidate people
- Yell at them
- Encourage them to walk on eggshells with you
- Conflate your ego and the organization
- Discourage dissent
- Make money or job security the only incentive to stay
When I'm working with a group of leaders (as I was yesterday), I usually ask them to think of the best and worst leaders they've ever worked for and then give me short words or phrases to describe that person. It's interesting that there is almost always a lot more energy around the characteristics of the worst boss. They usually sound a lot like the list for Cassano. It's sad, but I guess the good news is that most bad bosses don't have the leverage on the economy that he did.
If you're feeling depressed at this point, tune in Friday for an example of a boss from whom we can learn some positive lessons. In the meantime, what's your best advice for dealing with a boss like Joe Cassano? Most people have had or will have one like him at some point. What's the best strategy for survival or better when you have one?