"You are what you measure." So said Citigroup (NYSE:C) Michael Corbat to a group of Citi executives at a meeting last month in an attempt to succinctly explain how bank executives and their performance would be judged moving forward.
It's not exactly the most inspiring call to arms I've ever heard, but it's probably the right direction to steer the bank in nonetheless.
Wake me when its over
Corbat intends to introduce a system of score cards for his top executives that will track how well they perform against their stated financial plans. The score cards will reportedly rate them across five categories, with grades ranging from minus-40% to 100%.
In an upcoming meeting, Corbat is also expected to introduce metrics "that will allow analysts and investors to more-easily gauge the company's performance." Yawn.
Move over, Patton
Most of us like our leaders to be dashing. To make big statements. To entertain and even sometimes shock us.
Whether it's General George S. Patton mouthing off to his superiors as he smashes through German lines, or JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon mouthing off to reporters as he smashes quarterly earnings records, it's hard not to be drawn in by big personalities doing big things.
As such, Corbat's announcement that he's going to begin trying to get a handle on his bank -- which he's only been CEO of for four months -- by measuring everyone and everything in sight is, frankly, disappointing. But this is only at first blush. After the numbing effect of "you are what you measure" begins to wear off, I think it's clear that this is exactly what Citi needs.
Post financial crisis, only Bank of America (NYSE:BAC) is in worse shape than Citi out of the big banks. Both went way off course in the housing boom years and have paid a heavy price in bottom-line-robbing penalties and payouts, and both need discipline right now more than anything else.
Jamie Dimon -- while charming, loud-mouthed, and dashing -- still instills discipline at JPMorgan, Brian Moynihan is on the case at B of A, and now Corbat is trying the same at Citi. Corbat seems every inch the measured, traditional banker: calm and cautious. It's not much fun to watch, but investors should probably be thankful.