For the last few days, one name is making waves for the wrong reasons in business circles- Lehman Brothers , which was compelled to declare bankruptcy. A development that no one would have foreseen a few months ago.. The impact of the bad news in Lehman has impacted people in different parts of the globe in many ways. In Mumbai, India employees of the Lehman BPO ( about 1500-1700) have reportedly been asked to look for alternate employment next month. In the US, it appears that Barclays may be interested in buying up some parts of Lehman like the North American investment banking and capital markets business for $250 million in cash.
In this context, one wonders : What went wrong? It will be a while before the full story behind this debacle is pierced together but speculation points to a certain amount of overconfidence on the part of Lehman CEO, Richard S. Fuld, Jr. Mr. Fuld has been with Lehman since 1969 and been its CEO since 1993. John Gapper in the Financial Times says it was Mr. Fuld’s pride that stopped him from selling parts of the organization he helped to make so huge-when he should have.
Does the overconfidence of a CEO make the firm oblivious to possible dangers? Being confident is great. But being so overconfident that you fail to see what could go wrong as you stretch yourself on every parameter is asking for trouble. Richard Fuld’s ambitious plans seems to have crashed along with the organisation he was such an integral part of. In a sense he built this version of Lehman- and brought it down.
Is the Lehman Story a case of the arrogance of the overconfident?
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This is Post No: 289 of the “A Step A Day” series : To provide perspective and provoke thought to facilitate self-development across a wide spectrum of issues- big and small- crucial for executive success.