Hey, it’s not easy to off your high-profile protege

June 13, 2008, 2:05 PM UTC

Today’s paper reports that Lehman Brothers has rejiggered its ultra-upper-senior management structure, as CEO Richard Fuld, presiding over a projected $2.8 billion loss in the second quarter, seeks to communicate a message of change while stopping just short of taking the hose himself.

You can’t blame him. The quality that characterizes all leaders is the belief that, no matter how bad things get, they can fix it. And while it is painful to off your high-profile protege, it’s much worse to contemplate a corporation that exists without you at the top of it.

That’s because the executive personality believes several key precepts that make it possible for an individual to function under the extraordinary mix of pressure and pleasure that characterizes life at that altitude. Here they are:

  • I am not fungible: While believing profoundly in the expendability of others, this type of person does not apply those qualities to him or herself. He or she is the only irreplaceable entity in what is otherwise a machine with interchangeable moving parts. When a CEO loses that idee fixe, the ability to function at an executive level goes with it.
  • Things can be repaired if I am just given time to do it. There is no moment, at least in public, when this person thinks, “Gee, you know what? I’m out of ideas. I should just hang it up and go.” The one possible exception to this, in our lifetimes, I believe, was Time Warner (TWX) CEO Jerry Levin, who developed a demented idea that his huge, powerful corporation should be acquired by a small Internet company and effected that transaction, to the vast and possibly permanent woe of everybody involved. In my opinion, Levin simply lost belief in his businesses and felt they should be taken over by a firm that “got” the future. The inevitable conclusion is that it’s better to have a deluded, stubborn oligarch who refuses to give up on your decrepit business than a Zen master with ineffable detachment enough to royally screw things up.
  • Business comes first. Fuld had to do the most difficult thing in the world: hurt his close friend and lifelong associate, Joseph Gregory, and demote his high-profile finance chief Erin Callan. I’m sure he would rather have cut off his right arm — metaphorically, of course. But as Michael Corleone said to his brother, Sonny, “It’s business. It’s not personal.” Yeah. Like fun. But it helps to think so.
  • The gods must be assuaged. CEOs of public companies live in a constant, inescapable pressure bubble inhabited by uncomprehending analysts reports, the cries of investors and the drip drip drip of the stock price as reported on Thompson. All these come together as one angry god known as Wall Street. And the god of that particular mountain must be fed before the weather returns in which crops may once again grow. Anything done in that regard is not only right, but mandated, down to ritual sacrifice.

In that regard, The Journalreports, citing the famous and popular “person familiar with the exchange”: “In an emotional meeting Wednesday afternoon, Mr. Gregory – who started out with Mr. Fuld in the firm’s powerful fixed-income department more than 30 years ago – told his boss: “We have lost credibility, [and] Wall Street wants a head.”   

There it is. When the drums beat and the sky grows dark, the Mayans and the Aztecs knew what to do, and we do too. For the sake of Lehman (LEH), for all our sakes, come to think of it, let’s just hope the old ways are still the best.