AIG plumps for Willumstad: What took them so long?


AIG came to the brink of disaaster in the credit crunch of September 2008. Its newly appointed leader Bob Willumstad may be just the sort of person to steer them out of the current crisis. But will he be given the opportunity?

Original post follows

Bob Willumstad at 62 seemed to have missed out on his dream of running a major corporation. Now he heads the troubled giant AIG. His track record is admirable. Which raises the question: what took appointment boards so long to pick him?

Robert Willumstad was one of the names in the hat in the leadership merry-go-round at City Group with Chuck Prince and Vikram Pandit. He then became part of AIG, another company with leadership difficulties, but still not in the top job.

The Economist

The Economist picks up the story

On June 15th [2008] Mr Willumstad was hastily installed as chief executive of AIG, following the forced resignation of Martin Sullivan after only three years at the helm. He comes with a pedigree few can match. He played a big part in assembling Citi, smoothing over difficult takeovers…But he was also good at the less glamorous stuff largely thanks to tight cost control.

He seems to have ruffled very few feathers along the way. Former colleagues put this down to a combination of unobtrusiveness and honesty. “He’s quiet but very effective,” says Jamie Dimon, chief executive of JPMorgan Chase, who worked alongside Mr Willumstad at Citi. “You get the truth with him. There’s no political agenda.”
Many Citibankers had hoped he would return to take the top job when Mr Prince resigned [November 2007 when]the board approached him but eventually plumped for Vikram Pandit. These qualities set the “quiet giant”, as the six-foot-three Mr Willumstad was once dubbed, in contrast to the blokeish Mr Sullivan and the imperious Mr Greenberg

What took them so long?

One possibility is that quiet competence is often trumped by the more visible characteristics and extraverted style associated with so-called charismatic leaders.

Leaderswedeserve has from time to time returned to the idea of the non-charismatic leader, modest and of fierce resolve. These features were considered to be under-appreciated in many successful leaders, who remained relatively invisible in the heroic accounts in the business press.

Willustad, the quiet giant, may be one more exemplar of the fifth level leader, (Jim Collins) who eventually succeeds, where more blokeish or imperious figures fail. If he does, he also illustrates how so often boards acquire the leaders they deserve.

3 Responses to AIG plumps for Willumstad: What took them so long?

  1. Tudor,

    Is Willumstad an example of a “leader” or a “manager”? I know that the distinction can be very blurred, but what do academics claim is the difference? I have been in a couple of organisations where flawed “leadership” has led to a reactionary installation of a “manager” — and they can be every bit as “dictatorial” (and bad for the organisation) as the wrong leader.


  2. Tudor says:

    This is a much asked question. It depends how you chose to use the terms! And even the language being spoken.

    Leadership courses often encourage participants to discuss the matter. For a while a distinction was made between leaders who ‘do the right things’ and managers who ‘do things right’. I never saw much more than a linguistic way of reflecting on terminology in the exercise, and besides the definition has problems with leaders who do things wrong, and managers who do the wrong things.

    Things got more confused with ideas of leaderless groups, and multiple or shared leadership concepts.

    Best wishes

  3. Tudor says:

    Update: September 2008. AIG is bailed out in the credit-crunch crisis which led to the downfall of Lehmans. Willumstad had had two months in which to weave some leadership magic. It is not hard to predict that he may well be admirably suited to steer the organization through this difficult period. But will he get a chance?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: