Making the tough decisions

A lot has changed in the banking industry, and a lot more has remained the same. This quote might appear to be referring to the current economic situation, but in fact it’s decades old.

“There’s too much waste in banking. Getting rid of it takes tenacity, not brilliance.”
– Carl Reichardt, former President of Wells Fargo

I’ve heard plenty of arguments about all of the genius and intelligence and brilliance that exists in the banking industry these days. But not once have I heard anyone tout the tenacity of a financial institution or any of it’s leaders.

In the book I’m currently engulfed in, Good to Great, the author Jim Collins profiles Reichardt and talks about the changes he made in his company when he saw the writing on the wall.

Facing the ominous reality of the impending deregulation in the 1980’s, Reichardt made a habit out of making the tough choices. According to Good to Great he…

“froze executive salaries for two years (despite their current profitability). He shut the executive dining room and replaced it with a college dorm food-service caterer. He closed the executive elevator, sold the corporate jets, and banned green plants from the executive suite as too expensive to water. He removed free coffee from the executive suite. He eliminated Christmas trees for management. He threw reports back at people who’d submitted them in fancy binders. Reichardt would sit through meetings with fellow executives, in a beat-up old chair with the stuffing hanging out.”
– Good to Great, by Jim Collins [page 128]

I highly doubt there are any executives at the major banks that we could coax this attitude out of. What a shame. They just don’t make ’em like they used to.