The Harbus recently had the opportunity to meet with Chuck Prince, CEO, Citigroup and interview him about what it takes to run a large company like Citi, the greatest challenges that he sees for the company today, his views on leadership, and his life outside the office.
Harbus: With the great changes that a large company like Citigroup seems to be constantly experiencing, what are some of the key issues on your mind today?
Chuck Prince: Given our size, $100 billion in stock equity, a trillion three or so in assets, 102 countries, 300,000 employees, $18 billion in after tax profits this year (and I’m trying for $20 this year if you don’t count the settlement), $21 or $22 billion per quarter of revenue, soon, in another couple of years to be $100 billion per quarter revenue – Citigroup today is the biggest and most important financial services company in the world.
There are really three issues that Citigroup has to face. One is continued growth. When I started with the company back in 1979, that little part of the company had 4,000 employees, and we made $20 million. And so the company, as it’s combined in different ways, has transformed into an entirely different kind of thing. It’s hard to believe there’s a connection between where I started in Baltimore and where we are today. But to grow from here, to not be satisfied with what we have now, to not manage a museum, that’s the first of what I would describe as three challenges facing us. Because of our history, most people think that we’re deal junkies, that the only way we can grow is through doing acquisitions, and acquiring a company and gobbling it up, and then like the death star in some science fiction movie, gobbling up the next company. And most people think we can’t grow organically, and proving that we can, proving organic growth, is a necessary thing for us. And I think we’ll do that.
In addition to growth, I would say the next area of focus is corporate governance, compliance, risk – those kinds of things which make the business go in a straight line. John Reed (former co-CEO of Citigroup) used to say that the most important part of a race car is the brakes, and that you can’t drive fast unless you have the ability to stop. And if you take that as a rough analogy, if we have an enormous growth engine, if we’ve got the biggest engine in the world, and we’re really going to race ahead with our engine, having things which constrain that growth and make it go on a straight line and not go off the side of the road periodically, not get us into trouble periodically, is very important. We have to step back from the edge of the road in ways that we didn’t used to do, and in ways that some of our smaller competitors don’t have to. But again that is a natural consequence of having the biggest, most prominent brand. You have to run your business differently if you’re Citigroup than if you’re a schlocky little competitor.
And the third of the three focus areas are people issues, which is what I feel very, very passionate about. I really don’t worry about growing the size of the business. We already make $20 billion a year, that’s what we’re on track for this year. I don’t have any question that we’ll grow that. With the internal compliance and risk and so forth, I don’t have any real concerns that that will work out okay. What I really worry about are people issues. We work for the largest financial services company in the world, one of the largest of all companies in the world. McDonald’s has more people, but it’s a different kind of employee population. In terms of the kind of employee population we have, we’re probably one of the largest in the world of any kind.
When I get up in the morning and I look in the mirror and shave, if I think to myself that I’m going to go work for the largest bank in the world, or the largest insurance company at the time in the world, I would kill myself, because nobody wants to work for the largest bank in the world. People want to work in small teams, they want to work in partnerships, they want to work where it makes a difference whether you come to work that day, whether it makes a difference whether you have a good day or not, whether you do your job well, where you know everybody and you can rely on them, and they trust you, and you trust them, and you’ve got respect.
And that’s the one thing I worry about. I don’t worry about revenues really, I don’t worry about compliance really, what I worry about is motivating people and creating that kind of an environment. Because no one has ever had this kind of a model before, we don’t have any prior example to follow, there are no books on how to run a company like this, there are no MBA courses on how to run a 300,000 employee company with 100 cultures and 50 languages. There’s no place to look for this, you just get up every morning, you stumble ahead and you do the best you can. Five things work, four things don’t work, and you come back the next morning and you try it again.
Harbus: What do you think makes a great leader and what is your leadership style? How do you stay connected to the reality of your employees and customers being the head of a 300,000-people company?
CP: Well, this touches on people issues. Doesn’t it? And, so, it’s a very complicated question. It doesn’t lend itself to glib answers and final answers. I think, everybody who is in a position of leadership, and we have lots of leaders in this company, this is not a one-man band – Marge Magner, for example, runs a consumer business which by itself would be in the Fortune 50, if it were a stand-alone company. We have lots of leaders in this company, and they all have different styles, different approaches. I would say that mine is a little more consensus-driven, a little more consultative, a little more, “I’ve got a team. What does the team think?” But it’s important even in that kind of context to have strong central beliefs about what you want to do with the company.
I don’t want to walk into meetings and say, “I don’t know. What do you guys think?” You have to have a point of view, a strong point of view. You have to have a conviction on what you want to do. But then I think, it’s very important, and I’m seeing it in leaders who don’t do this, it’s very important to listen. It’s very important to be open to reflect on things to take in a lot. And Sandy Weil, who obviously ran the company for so long and who’s a dear friend, Sandy would, or Bill Clinton would triangulate all the time. He would ask 12 people the same question, take in 12 answers and kind of, you know, figure it all out. And I’m a little bit different.
I’m much more likely to get all 12 people in a room and say, “Okay, you know, let me hear it all at once, so I can hear the back and forth.” But I think, either way, it’s very important to be open, to ask for criticisms. “I feel strongly we should do “X.” Does anybody really disagree?” And it is important to have a culture where people will take you seriously. I mean, we’ve all been in situations. We’ve all seen it. We say, “Okay. Does anybody disagree?” And if you say you disagree, you’re thrown out of the room. That’s not the right culture. It doesn’t encourage dialogue.
But a leader has to establish that culture, to encourage it, to take in a lot of things, to be open to changing your mind, to be open to saying you made a mistake. I think that’s very important. I make a lot of mistakes. You know, anytime you’re in a job like this, you make mistakes all the time, and if you’re not open to saying that, then you’re not going to be able to grow, I think, as an individual. So, really, it’s an ongoing process. It’s hard, I would say, because you are so insulated by the institution. For a couple of years now, I set up a lunch group every year of people who are early in their careers. So, they might have been with the company, let’s say, six years, from various parts of the business. And I meet with them once a month
. And we talk about what’s going on in the company. And that’s one way for me to get unfiltered feedback because, you know, it’s all the usual. Nothing will leave the room, nothing is for attribution. We sit down, and I say, “Okay, we’re going to do XY, we’re going to grow this. We’re going to grow that.” And somebody says, “Well, that’s complete crap. You know. That’s never going to work.” Then you get a different feedback. Then you get somebody saying, “Oh, this is great, boss”. You’ve got to have processes to get real information that’s not filtered by the institution.
Harbus: What do you do “outside of the store” ? What’s your personal goal beyond this? You are at the top of the biggest bank. Where do you go?
CP: Well, I’m not sending my resume out, looking for the next job! What do I like to do outside of work? I’m an unapologetic workaholic. I don’t play golf. I don’t play tennis. I don’t go bowling. I don’t really follow sports anymore. I used to watch football a lot, basketball, but now I just work a lot. And I used to apologize for that. I used to say, “You know, you’ve got to balance.” And I think everybody’s just different. And this is me. I work. I like to read – history, biography.
But basically I work. And that’s sort of what I do, and that’s good, because this job requires a lot of working. In terms of, you know, what’s next, when the succession plan was announced last July 16th of whatever it was, last summer, Sandy [Weil] said to me that given my age, I was 53 last year, “Given your age, you should have ten good years as CEO.” I said, “Well, ten out of how many?” Is it, like, every other year? Or is it every third year is a good one? How does that work? The average tenure for a CEO is probably three-five years. You guys go to school, you know this. And so, my job is to try to set a strategic direction for the company, to try to set a cultural direction for the company, to try to think about the care and feeding of 300,000 Citigroupers. And that’s my focus. When I’m done with this, then I will do something else ,but I’m not focused on that. I’m focused on a very big job and a very enjoyable job.
And as I said earlier, I make mistakes. I have a lot of fun, there is really no horizon to this job. It’s almost limitless in terms of the opportunity. Our old advertising slogan, “The Citi never sleeps” is true. I could literally work 24 hours a day, if I wanted to. It’s amazing. Somewhere around the world, there’s always a Citigroup person doing something. And it is just extraordinary.
So, I’m not focused on that next career move. I doubt there’ll be something that I could top this with. And, you know, maybe I’ll go to Carmel and get a dog and sit on the beach.”
Harbus: Thank you for taking the time to talk with us.