Citigroup CEO Mike Corbat is one CEO among many currently dealing with this challenge. Today, he has to tell investors that he did not achieve the financial goals that were set in place when he was named CEO 18 months ago.
Charged with improving relationships with federal regulators, Corbat promised that 2015 profitability targets would equal at least 10 percent of the bank’s common equity. On March 26, the U.S. Federal Reserve rejected Citigroup’s request to raise dividends and buy back shares, which puts that goal in jeopardy.
Some would say that not meeting goals equates to failure. Others would say that times like these show what a person is made of, and reaching a closed door simply means changing direction and activating plan B.
When CEOs don’t achieve what they were hired to do, what should the consequences be? There are several options, such as resignation, apologizing, cost-cutting, or simply continuing to move forward toward new goals. As the head of the team, how much of the responsibility sits squarely on the CEO’s shoulders?
In January, Nintendo’s chief, Satoru Iwata, announced he would take a 30 percent pay cut after third-quarter shortfalls. Other executives also reduced their pay. There are numerous stories in today’s news of CEOs that step down after negative financial results. These are drastic moves, and do not fit every situation.
Apologizing is a key part of Japanese culture, and is increasingly being used by business leaders in the U.S. as well. Toyota’s chief has been apologizing publicly for years, as have those of American automakers GM and Chrysler. Nintendo’s Iwata can be seen bowing deeply in media photos after his formal apology for the company’s financial loss.
While the basics for regaining trust are simple, their importance bears repeating: get out from behind the desk. Roll up your sleeves. Speak to your employees, investors and partners. Listen to their concerns and questions. Don’t over-promise, but promise to try your best. Be honest, but positive.
In interviews with PricewaterhouseCoopers, CEOs shared strategies they have used to regain trust, including personally speaking with all stakeholders, including customers, and understanding where bridges are broken and focusing on repairing them.
Trust, PwC says, is the glue that binds an organization and its stakeholders together. With strong communications and clear, manageable goals, Citigroup’s Corbat may be able to rebuild confidence in both himself and his company. Others can learn from his experience.
Additional reading:
Six Lessons in How to Turn Crisis into Opportunity with Superior Customer Experience: https://bit.ly/R9Gdys
Rebuilding trust: A PwC report: https://pwc.to/1erzgDc
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
