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Fiddling while RBS burned – new book reveals Fred the Shred Goodwin’s fatal obsessions
Fred Goodwin was a corporate ‘psychopath’ who worried about minutiae as his bank lost control, a new book claims
“No-one could have known it at the time, but the cleaner on the steps of Clydesdale Bank’s Glasgow office, sweeping up a cigarette butt one day in the late 90s, was an early warning of impending financial doom.
The cleaner was there because Fred Goodwin’s mother had been passing by. Seeing the cigarette butt, she called her son, then the chief executive of Clydesdale, to tell him about it. The man they called Fred the Shred interrupted a meeting to call a senior executive, ordering him to have the offending litter tidied up immediately.
The story comes from a new book about the former Royal Bank of Scotland boss, which paints a picture of a man obsessed with minutiae – from office hygiene to the designs of Christmas cards – at the expense of the responsible strategic management of a world-leading investment bank.
In Making it Happen: Fred Goodwin, RBS and the Men who Blew Up the British Economy, by Iain Martin, the former editor of the Scotsman newspaper, Goodwin’s ex-colleagues recall how he took a personal interest in the cleanliness of his office, going so far as to ban filing cabinets with flat tops, so that piles of paper would not be left on them.
One close collaborator, quoted by Martin in the Sunday Times said: "The job of chief executive wasn't really done by him in the normal sense of someone trying to strategise properly and see the dangers and opportunities ahead. He was obsessed by all sorts of small details and measuring things and all sorts of minutiae and crap in certain parts of the business ... We would spend hours in meetings discussing the wrong things. Colours for advertising campaigns, computer systems and targets were what grabbed him.”
But what role did the obsessive streak in Goodwin’s character play in RBS’ eventual downfall?
Professor Malcolm Higgs, a leading occupational psychologist at the University of Southampton, told The Independent it certainly can’t have helped matters.
“You occasionally find this narcissistic tendency in CEOs,” he said. “They want to control everything, they don’t want to know that they’re not perfect. It’s not conducive to successful leadership of a company.”
Lehman Brothers boss Dick Fuld had similar tendencies, Professor Higgs said.
“The big question is: how do these ‘corporate psychopaths’ get to the top? They’re actually quite engaging people, they can appear very visionary. But they can’t take any negative feedback, so they lose contact with reality.”
Of course, on the way up the corporate ladder, the kind of manic attention to detail that led Goodwin to stipulate that RBS’ new fleet of chauffeur-driven Mercedes exactly matched the company’s logo (and the interiors matched the carpet in head office) might actually have been an asset.
Goodwin the up and coming executive at consultants Touche Ross was, in Martin’s words, “a hard-driving executive trained to spot and prosecute weakness.” He was snapped up by Clydesdale, gaining the moniker “Fred the Shred” for his ruthless pursuit of cost savings. He joined RBS in 1998.
“Being focused on detail and getting things just right might have been a useful trait when he was working at a lower level,” said Emma Donaldson-Feilder, occupational psychologist and director of consultants Affinity Health at Work, which specialises in workplace leadership and management.
“But you’ll find that as people go higher up an organisation, the things that were actually strengths at lower levels become over-used and high-risk…. It sounds likes Fred Goodwin became obsessive and that took his attention away from things that were much more important.”
The diagnosis matches other symptoms that Goodwin demonstrated after rising to the top of RBS in 2001. Martin writes of how, like many a doomed leader, he obsessed over a grand projet – RBS’ glimmering new headquarters at Gogarburn, outside Edinburgh.
Alarm bells should have rung for anyone close to Goodwin. According to Prof Higgs, managers and leaders who give meticulous attention to minor details are often over-compensating for a very deep insecurity that on another, more serious level, they really don’t feel in control at all.
“There’s a huge difference between attention to detail and obsessive control and it sounds like he had the latter,” Prof. Higgs said. “If he’d paid more attention to some of the deals they were making, they may not be in the state they are in now. There is fundamental self-insecurity behind it. If somebody is obsessive about controlling minor details – then it’s time to worry.”
The bank aggressively expanded under Goodwin, becoming the biggest in the world with a balance sheet of nearly £2 trillion by 2007. But the gains were unsustainable and RBA nearly collapsed in October 2008, needing a Government rescue by more than 80 per cent nationalisation. Fred the Shred lost his job and, four years later, the knighthood that he had been granted in 2004, for service to banking.
Martin, who says he became interested in Goodwin after struggling “to square his image as a coming titan of finance with the strangely unimpressive, slightly geeky figure in an RBS corporate tie and sober suit” wrote in a Sunday newspaper: “The public-spirited thing for Goodwin to do would be to donate himself to the psychology department of a decent university so that academics could run years of detailed tests.”
The above article is written by Charlie Cooper and was first published at:
See the book:
Iain Martin, Making It Happen: Fred Goodwin, RBS and the men who blew up the British economy, Simon & Schuster Ltd (12 Sep 2013)
“When RBS collapsed and had to be bailed out by the taxpayer in the financial crisis of October 2008 it played a leading role in tipping Britain into its deepest economic downturn in seven decades. The economy shrank, bank lending froze, hundreds of thousands lost their jobs, living standards are still falling and Britons will be paying higher taxes for decades to pay the clean-up bill. How on earth had a small Scottish bank grown so quickly to become a global financial giant that could do such immense damage when it collapsed? At the centre of the story was Fred Goodwin, the former chief executive known as "Fred the Shred" who terrorised some of his staff and beguiled others. Not a banker by training, he nonetheless was given control of RBS and set about trying to make it one of the biggest brands in the world. It was said confidently that computerisation and new banking products had made the world safer. Only they hadn't...Based on more than 80 interviews and with access to diaries and papers kept by those at the heart of the meltdown, this is the definitive account of the RBS disaster, a disaster which still casts such a shadow over our economy. In Making It Happen, senior executives, board members, Treasury insiders and regulators reveal how the bank's mania for expansion led it to take enormous risks its leaders didn't understand. From the birth of the Royal Bank in 18th century Scotland, to the manic expansion under Fred Goodwin in the middle of a mad boom and culminating in the epoch-defining collapse, Making It Happen is the full, extraordinary story.”
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For Syria's sake, end Iran's isolation
Iranian support to help the west bring an end to the civil war in Syria would be beyond price
“President Obama's decision to consult Congress before taking any military action against the Syrian government offers a brief opportunity for diplomatic efforts to construct a political settlement. That decision has been welcomed by many in the Middle East, among them the new president of Iran, Hassan Rouhani.
It is astonishing that, apart from by the Conservative MP Rory Stewart, Iran was hardly mentioned in the debates in parliament last week – given that it has a vital role in the region and is the key to a negotiated outcome. It is the most important ally that Syria has, as a recent report by the Rand corporation points out. With a population of 75 million, and with oil and natural resources, it is the most important Shia Muslim state in the world.
Iran is also a country that has suffered more cruelly than any other from chemical weapons. During the Iran-Iraq war in the 1980s, Iran lost tens of thousands of young men, many to the obscene effects of chemical weapons used by Iraq, which was never condemned by the west.
Iran has repeatedly condemned the use of chemical weapons, most recently in a statement by President Rouhani about the attack on the eastern Ghouta district of Damascus. He was careful not to associate the attack with a particular perpetrator, but the president's detestation of chemical weapons was plain.
In the UN, Iran has been active in advocating the chemical weapons convention. President Rouhani has been bold in calling for negotiations with the western allies, and in committing himself to a foreign policy of "reason and moderation". His foreign minister, Mohammad Javad Zarif, has stressed the need for consultation and co-operation on Syria. In a country anxious about its own security, in a region where it feels threatened, it takes courage to speak in these terms. Iran's political leaders are constrained by divided public opinion and by the views of its military elite, the Revolutionary Guard, which has close links with Syria. Iran's president needs a constructive response from the west.
Iranians are tough bargainers. Negotiations will involve concessions on all sides. For the Iranians, that might mean concessions on the economic sanctions imposed by the west that have hit them very hard. But Iranian support to help bring an end to Syria's civil war would be beyond price.
At the end of July, when it became clear that the people of Iran had elected, to general surprise, a liberal-minded and internationalist president, three peers – Lords Lamont and Phillips and myself – wrote a letter to the Times proposing that the United Kingdom should appoint a chargé d'affaires, a diplomat, to represent the United Kingdom at the new president's inauguration. It was clear that he or she would be welcome in Tehran. But our government did not do so.
Our embassy, stormed by demonstrators in November 2011 during the Ahmadinejad government, had been without an ambassador since then. The US has had no diplomatic relations with Iran since the hostage crisis in 1979. France, Obama's closest ally, alone has full diplomatic relations with Iran.
Any diplomatic outcome to the terrible Syrian civil war demands a two-track response: one to end the conflict, the other to deal with the humanitarian horror of hundreds of thousands of refugees and displaced people within and without Syria, a burden now close to breaking the capacity of Jordan, the Lebanon, Iraq and even Turkey, to sustain them.
At this week's G20 meeting in St Petersburg, the US, UK and France should propose their willingness to politically and financially support – at the forthcoming Geneva conference on Syria – a joint approach between themselves and governments of the Muslim world to the rebuilding of Syria and the resettlement of refugees once the war has ceased. As Al-Monitor, the Middle East newsletter, proclaimed last week, it is time now "to test Iran's willingness to play a constructive role in seeking a political settlement in Syria". It is surely also time now for the west to end the long isolation of Iran.”
See the original article:
http://www.theguardian.com/commentisfree/2013/sep/03/for-syria-sake-end-iran-isolation
A note from Kamran Mofid:
The Rt Hon. the Baroness Williams of Crosby,
As an Englishman of Persian origin, I most humbly thank you for your most eloquent words of wisdom and recommendation. Throughout your distinguished political career you have always been a force for good. Long may it be so.
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First posted on 02 September 2013
Updated on 30 July 2020
Lest We Forget: Students Must Always be Learners, Logical, Critical, Free Thinkers. In short, Seekers of Wisdom. Never Customers or Consumers of Goods and Services!
Students are far more important than shoppers in a mall on a Black Friday shopping bonanza and no university on earth should ever be able to cheat them by telling them otherwise!!
Photo: printerest
‘A-level students: if you want to be a 'consumer', go to the mall’*
'The government would like university students to see themselves as 'consumers'.
But they should be proud first and foremost to be students.'- Prof. Stephen Curry, Imperial College, London
Photo: David Levene/Guardian
Dear A-level students
I hope when you collect your results this morning you discover that you have got the grades you were looking for, particularly if you are hoping to go to university. If it has all worked out, congratulations! You are about to embark on one of the most important experiences of your life. But please don't pitch up at university at the end of September behaving like a consumer. You will be something more complex, more challenging and more important: you will be a student. It is not the same thing at all.
Unfortunately for you, being a student is an expensive business these days. The coalition government, muttering darkly about austerity back in 2010 and claiming that the nation could no longer afford generous support for students, has cut funding to universities and tripled university fees to £9,000 per year. To sell the new fee regime the government placed a heavy emphasis on the promise that students paying the elevated fees would be at the heart of the system and effectively acquire the status of consumers with the purchasing power to drive up standards as universities chase for business in a reinvigorated market in higher education.
The transformation of students into consumers in this marketplace is also propelled by the growing mania for surveying their opinions. The National Student Survey (NSS) gathers anonymous opinions on final year students' experience of university and is incorporated into the byzantine calculations used by various national newspapers (including this one) for grading and ranking different institutions. And now the reputations of individual lecturers are to be calculated from anonymous and continuous polling by the newly established Rate Your Lecturer website.
Since the customer is always right and access to good information is necessary for efficient markets, who could possibly object to this bold new dawn for the nation's institutions of higher education? Too long obsessed with research prowess at the expense of their educational obligations, universities were overdue for a shake-up and who better to demand it than customers with expectations cranked up by higher fees?
If you fix your gaze rigidly on the path of that argument it has a certain beguiling logic. But I refuse to subscribe to the retail theory of higher education.
I hope that Rate Your Lecturer crashes and burns. I would be happy to see the NSS wither from loss of purpose. The anonymity afforded by such surveys may be essential for gathering frank opinions but, as anyone who has spent more than five minutes on the internet knows, it is also a powerful attractant for trolls and whingers and trivialisers. We would do well to treat such "data" with extreme caution.
It's not that I am uninterested in the views of students; quite the reverse. But I would much rather learn about them from a conversation than from yet another survey (surveys are already an established mechanism for getting student feedback within many university departments).
I am reassured that some student leaders have seen through the government's false logic. As Rachel Wenstone, the vice-president for higher education at the National Union of Students (NUS) has observed, going to university is fundamentally different from buying clothes or gadgets on the High Street: "The things that are fundamental to a market, for example, competition, don't work in education. It's collaboration and co-production that are key to universities."
As a professor closely involved in undergraduate education, I share that vision completely. The consumerist and survey culture creates an inappropriate divide. In retail the customer may always be right but education doesn't fit that mould. Consumer-minded students are too often looking to plot the easiest route through their coursework to a degree certificate; as a result they are quick to find fault and slow to consider their own share in the responsibility for their learning. But the best universities aim to stretch and challenge their students, to work them hard and, from time to time, push them well outside their comfort zones. That may not always be a pleasant experience, but it's worth it.
To work effectively that process has to involve cooperation, understanding and courtesy on both sides. So when you get to university I would urge you to talk to your lecturers and professors. Get to know them. They are not shopkeepers, whose sole duty is to serve you. Most will be juggling teaching with research programmes and other administrative roles. But equally, don't be too much in awe (like the student of mine who could not imagine that a professor might travel to work on the bus) and don't be shy of quizzing and challenging them. Most will have a wealth of experience to share. They are what you might call "professional students" who have understood the most important lesson that university has to teach: that you should never stop learning.
Oh, and don't spend all your time studying at university. Make sure to have a bloody good time as well.- *This article by Stephen Curry was first published in The Guardian on 15 August 2013
Don't turn students into consumers – the US proves it's a recipe for disaster
Photo: Bebeto Matthews/AP/Guardian
'Americans embraced the marketisation of higher education, with profit-making colleges and debt-laden customers.
The result has been corruption and failure.'
Towards an Education worth Believing In
“Education is the foundation for a good and fulfilling life, setting the individual on a path of personal fulfilment, economic security and societal contribution. Today the world of knowledge and competence is in a constant state of flux. The same can be said for the universe of visions, aspirations, and dreams. For many centuries it had been considered that education in general and universities in particular were responsible for the moral and social development of students and for bringing together diverse groups for the common good. Is this still the case?”… Continue to read
A World Guided by Wisdom is the sure path to a Life Full of Meaning.
"Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?"-T.S. Eliot
'Knowledge Comes But Wisdom Lingers.'
Lack of wisdom is the beginning of all evil and the downfall of all civilisations. We need wisdom in all we do in our entire life endeavors.
Wisdom enables and empowers us to imagine better, a better life, a better world.
My recommended book of Wisdom that will change you and your understanding of what Education is or it should be forever.
Wisdom and the Well-Rounded Life: What Is a University?
'Reflecting on the pursuit of knowledge and wisdom in higher education and in life, this thoughtful treatise considers the roots and philosophical underpinnings of university education. Examining such subjects as philosophy, science, nature, art, religion, and finding one's place in the world, Peter Milward shares his sage thoughts on obtaining a well-rounded base of knowledge.'
Read the Foreword and more details about What is a University HERE
And this can happen when education is all about knowledge and information and has nothing to do with wisdom!!
Brexit, Trump and the failure of our universities to pursue wisdom …
Britain today and the Bankruptcy of Ideas, Vision and Values-less Education
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