Why Is Robert Rubin So Bad at PR?
The great mystery of Robert Rubin’s fall from grace is his own role in managing the public perception of his work at Citigroup. Yesterday’s announcement that Rubin would be retiring–combined with news reports of negotiations to sell some crown jewels–will be remembered as the turning point in Citi’s fortunes years from now. Sink or swim, Rubin’s role in the company will now appear more important and decisive than it probably was. And the responsibility for that lies entirely with Rubin himself.
Let’s look at what’s being reported. The WSJ passes along this piece of ham-handed spin:
Mr. Rubin, 70, decided last month that he was ready to leave the company, according to a person familiar with the matter. That conclusion was driven by the overwhelming amount of time that his role at Citigroup was requiring, the person said. Mr. Rubin declined to comment.
Yeah, that’s right. Too much of his valuable time. That’s the ticket. Do Rubin and his advisers really think–after all of this time, scrutiny and disaster–that he can maintain the fiction that his role at Citi was a part-time advisory job?
His paycheck alone belies that, setting up a no-win situation where he was either massively overpaid to lend his reputation to Citi’s reckless actions (for those who remember the infamous Enron call, this lends even darker overtones to what Rubin might have been doing for Citi all these years) or he was a reckless dilletante ignoring his responsibilities.
Neither of these interpretations seems likely to be the truth. Rubin’s massive reputation is well deserved. And his previous ability to make himself both powerful and the center of attention without grasping at power or thrusting himself into the spotlight has been a marvel of corporate, national and international leadership. And yet that self-same style seems to be what has backfired here.
There’s another dimension to the Citi story that CNBC’s Charlie Gasparino mentioned on air yesterday: Rubin is seen as Vikram Pandit’s biggest supporter. With Rubin resigning, Pandit’s position is now weaker.
And this isn’t the first time that Rubin has shown poor judgment leaving the heavy hand of his support too long on an embattled protege’s shoulder. At Harvard, Rubin supported Summers too long, pushing the university into an embarrassing conflict between President and faculty. It’s hard to imagine that Chuck Prince could have survived the pressures of dealing with Sandy Weill’s mess without Rubin’s protection.
John Kenneth Galbraith’s dictum about the end of financial euphorias states that a previously omnipotent figure from the boom must be dethroned in the bust. Robert Rubin seems to fit that bill.
Source:
Citi Takes First Step Towards Break Up
DAVID EHRICH
Wall Street Journal; January 10,2008
http://online.wsj.com/article/SB123152743795268785.html
January 10th, 2009 at 12:12 pm
I don’t think he’s omnipotent nor central enough to the whole fiasco. I think a Fed chairman, past or present has to take the bullet this time. That may be wishful thinking on my part but by the end of the year the howls will be very loud and even the mainstream news sites are now littered with posters decrying the evils of the Fed and the credit based economy
January 10th, 2009 at 1:09 pm
Admit errors, advise management gurus and leadership counselors. It’s a way to get respect, and perhaps restore trust before it’s irretrievable. Still, the order of magnitude of the mistakes so many business leaders made, and their devastating consequences, will put these truisms to a test. For example:
“My great regret,” he [Robert E. Rubin, former U.S. Secretary of the Treasury, and now former advisor to Citigroup] added, “is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today.”
The New York Times: Rubin Leaving Citigroup; Smith Barney for Sale
For more: http://www.housingcrisis.com/financial-crisis/cost-admission/
January 10th, 2009 at 2:57 pm
This is very easy to understand. When you are getting paid $15 million to do nothing, your reputation will suffer. No one will believe you were paid $15 million to do nothing. They will think that either you were the world’s highest paid lobbyist (Citibank’s sweetheart bespoke bailout would support this view) or that actually you are lying about doing nothing and bonehead moves such as the purchase of Old Lane- a deal which will live in infamy- were in fact engineered by you. Rubin sold his reputation. That’s why he’s “bad at PR” – no one believes him any more. The amazing thing about it is that he sold his reputation after he was ALREADY RICH!!
January 10th, 2009 at 5:12 pm
The amazing thing about it is that he sold his reputation after he was ALREADY RICH!!
Reputation doesn’t matter to these guys, only access. It is dishonoring to the word reputation to say that these types of people had one. He is stepping down not because he lost his reputation but his access
January 10th, 2009 at 5:14 pm
I don’t think he has anything to say. The current players in the private and public sectors compounded the mess while reaping mind boggling $. Rubin knows. He may have decided to fold his hand rather than make lame excuses.
Above, jmcmanus shows what he could do. It would work. I suspect he will move backstage where he probably will be able to exert influence.
January 11th, 2009 at 1:21 am
John Kenneth Galbraith’s dictum about the end of financial euphorias states that a previously omnipotent figure from the boom must be dethroned in the bust. Robert Rubin seems to fit that bill. No. Warren Buffett is the king top be dethroned. Rubin is the $100 million dollar lobbyist.