Leaders and organizations make mistakes. And we’ve seen plenty of evidence of mistakes made over the past few years by many previously highly respected financial firms. The tragedy is that some of these leaders and organizations have not learned from their mistakes, mistakes that have dramatically affected the economic well-being of millions of people. William D. Cohan, author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, in his op-ed piece in the New York Times titled, “A Tsunami of Excuses,” contrasts Wall Street executives who haven’t learned from what went wrong with those who have learned. He quotes the former CEO of Bear Stearns responding to questions from the Senate Banking Committee:
I can guarantee you it’s a subject I’ve thought about a lot…Looking backwards and with hindsight…If I’d have known exactly the forces that were coming, what actions could we have taken beforehand to have avoided this situation? And I just simply have not been able to come up with anything ... that would have made a difference to the situation that we faced.
Compare this to the Morgan Stanley CEO’s comments to Congress:
The events of the past months have shaken the foundation of our global financial system…And they’ve made clear the need for profound change to that system. At Morgan Stanley, we’ve dramatically brought down our leverage, increased transparency, reduced our level of risk and made changes to how we pay people…We didn’t do everything right. Far from it. And make no mistake: as the head of this firm, I take responsibility for our performance.
What a difference between these two leaders! We need more like the Morgan Stanley CEO, Wall Street executives who learn from their mistakes, who take responsibility for their actions, and who help everyone else in their organizations continuously improve performance and do the right thing. Otherwise, how can we have confidence in our financial institutions?