Citi's Pandit: Still Going in Circles

Gary Weiss profiles Vikram Pandit in this month's magazine, and his conclusion seems spot-on:

What Citigroup needs now is not a wannabe Sandy Weill but someone with the elusive qualities needed to revive the banking giant from its slump. Pandit's current course doesn't seem bold enough, nor does his vision seem clear enough, to put the lumbering colossus back on track.

My views on Pandit are known, and it seems they're shared by Citi types, too:

Citi's challenge is now more structural than operational, a management nightmare ill suited to a C.E.O. running his first-ever public company. "I don't know who his godfather is," says one former Citi banker. "He has the background to run a hedge fund, not a bank."

And when Pandit meets reporters, they tend to emerge from the experience decidedly underwhelmed. Weiss is no exception:

He talks more about growing in the future than winding his way out of Citi's past, reciting his strategy in well-rehearsed cadences, reflecting a Pandit-era culture that favors neologisms like globality and clientcentricity.

I'm reminded of a classic slide from what Weiss describes as "a widely hyped three-and-a-half-hour dog and pony show for analysts and investors on May 9". This comes from a presentation by Manuel Medina-Mora, jealous head of one of Citi's most important fiefs, Latin America: 

As a symbol of everything that's vapid and content-free about Pandit's strategy, it can hardly be improved upon.

Comments

[udirtyrat:]

I'm a shareholder and at a very nice price from the low 15s and you know what! Personally I don't think he cares to make you excited or not and neither do I. This is not a popular contest and it's not american idol, so deal with it. I like the prospects for the future of the company long term and with a dividend with a very nice percentage I'm willing to take that chance. For me with such a good price the downside is very minimal and I'm not concerned, especially if Mr. Pandit has a vision that doesn't look the same as others.

2008 Aug 13 10:03 AM

[EE:]

Suggest you protect with '09 puts 12.50's probably

2008 Aug 13 10:14 AM

[BamBam:]

Pandit is nothing more than a Yes-Man representing the conflicted, empire-building interests of Sandy Weill and Bob Rubin. The first step in seeing shareholder value here is to sweep the board of directors clean of the influence of these two corrupt old men.

2008 Aug 13 11:08 AM

[Keepmovingf...:]

I believe it is too early to make this call. What would you have him do...now is not the time for firesales. now is the time for deliberate action - well thoughtout, planned action.

2008 Aug 13 11:58 AM

[Crane:]

The more interesting question is to first ask, "Has any one been successful running Citi?" All of the leaders of Citi from Wriston on have been great men who have fallen far. Citi is a culture that feasts on itself, the snake eating its tail.

The best thing about Vikram is that he does not come from this past.

Then you have to ask the second question, "Can Vikram overcome the culture?"

2008 Aug 13 12:23 PM

[User 244449:]

Mr.Pandit should be given more time to straighten out the mess left by
the past CEO's ,but I think he has to look at structure instead of breaking up the corporation into pieces.I as a shareholder,agree he should sweep the board of directors ,look at combining a number of senior management positions ,and liquidating the heavy number of middle management positions.

2008 Aug 16 12:15 PM

[ResourceWise:]

Citigroup has been a disaster in the making since 1998 when Travelers and Citicorp merged – because of poor execution. The endless power struggles, win-lose leadership fights and thoughtless cost cutting has sapped the organization of the very strengths that were cited as reasons to justify the merger.

Now Mr Pandit - overseen by a board and supported by a senior management team that has watched this slow motion but high impact train wreck play out over the past decade, is actively looking for solutions. During this time he seems to continue to apply the same losing solutions – e.g. appointing his friends into senior roles that they are not the best qualified for; and seeking salvation through cost cutting.

Unfortunately this ‘some more of the same’ approach will not create organizational excellence – apologies to day traders, short sellers and headline seekers - there is no quick fix.

However, shifting the organization’s focus to:
1. Addressing clients’ needs instead of pushing products; and
2. Leveraging the global franchise instead of being limited by a New York centric view
- is an absolute necessity. If Mr Pandit is seeking to do so, we need to applaud his ‘enlightenment’.

This shift of focus needs to be supported by re-building the systems and processes of the organization that enable all the stakeholders in the company to effectively work together (sounds mundane doesn’t it!). If he can get the organization to execute well, the stock price will get moving in the right direction.

Best of luck Mr Pandit!

2008 Aug 17 02:20 PM