This is a guest post from Jeremy Garlington, an Atlanta-based leadership consultant and author of blog The Garlington Report (www.povblogger.blogspot.com).
Whoever fills the CEO role at the nation’s largest bank, while sexy and headline grabbing, is not the most pressing need. What’s more important is how the BofA board rights the bank’s leadership course. This obviously includes the coveted prize, a new CEO, but to emphasize that decision at the expense of other more important matters represents bad governance. It also underlines the misguided longly held belief that great talent will solve anything. That’s not the case at the BofA.
Here are several steps that the bank’s board should consider:
1. Replace the Chairman. Board Chairman Walter Massey is now inextricably linked to the former regime as a result of ongoing litigation, government investigation and personal relationship. This is a perceptual non-starter. It also represents a serious first challenge for the board to answer. Massey’s tenure has been brief and has already given rise to a crisis, when investors forced Ken Lewis to sacrifice the Chairman title. The law of unintended consequences has been cruel here so far. Whether Massey can right the ship when he himself is under attack should be the board’s first order of business.
2. Find a way forward or out of the regulatory and judicial jungle. New CEO or no new CEO, BofA needs to move expeditiously with trying to reach settlements across the board on all current legal matters. This may sound a bit pie in the sky. But even a better good faith effort would send a stronger signal. Within this effort also lies a key competency for a new CEO. At least three quarters of the current leadership mandate is making sure the cloud that currently engulfs the bank is lifted.
3. Consult Jamie Dimon at JP Morgan Chase. This step is more search-driven than strategic, but it’s a practical step that only the truly hubris free will consider. Dimon has led an extremely successful, similar sized operation during a similar period of upheaval. No one else has the same knowledge or experience to deal with what faces BofA. To not consult Dimon would be a gross oversight. You can be assured of at least one thing: Whichever high end recruiter gets the assignment will take this step while simultaneously trying to woo talent away from Dimon.
This isn’t about wasting a crisis or trying to bring Superman to lead the nation’s largest bank. It’s about doing what’s right in the wake of months of misdeeds and leadership inertia.
If there is a silver lining, it’s the fact that BofA’s business appears to be on better footing than a year ago when the system collapsed. Yet that also unfortunately in this case speaks to a bank’s greatest self perceived advantage: Time. Time to recover. Time to take more government money. Time to see assets come back. The more time a bank has, the longer it can live. Vice versa, the longer it can continue to do nothing and watch its once vaulted status nose dive into the abyss. Any of the major banks that neglects this consumer reality does so at their peril.
How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.