It’s said that it often takes more than four months to transform a company’s culture. But Vikram Pandit, the CEO of Citigroup, may not have much longer than that.
Since Pandit took over in December, the New York-based financial services company has posted $15 billion in losses and announced plans to eliminate 9,000 jobs, frustrating shareholders and employees and putting Pandit on the firing line.
Despite scrutiny from the media and shareholders, Pandit has been consistent in calling for a culture based on teamwork. In March, he announced a new regional structure that allows regional CEOs to make decisions for their businesses rather than having everything go through headquarters.
"The success of our organization lies in the strong partnership and collaboration of our people in our global businesses and geographic regions," Pandit said in a March 31 internal memo announcing the changes.
While establishing a culture around teamwork makes sense, experts say it’s going to take a lot of communication and revamping of HR processes for Citigroup to achieve this goal.
"The question is not whether Citigroup can prevail in this uncertain environment," says Terri Kassel, head of the HR practice at GloCap Search, a New York-based search firm. "The question is, can they create a culture of teamwork regardless of the environment?"
Citigroup executives were unavailable to comment, according to spokesman Michael Hanretta.
Establishing a more collaborative culture would help Citigroup—particularly given the fact it has 370,000 employees around the world—but it’s going to take time.
"Taking this approach makes sense because change is occurring so rapidly in today’s world that the old command-and-control mentality doesn’t work," says William J. Morin, chairman and CEO of WJM Associates, a New York organizational consulting firm. "But it’s going to require getting the trust and buy-in of employees, and that’s tough."
This could be particularly difficult given that many employees are concerned about job security and are only focused on their individual performance, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School of Business.
"The challenge will be for Citigroup to find an objective way to assess employees’ performance with regard to this cooperative approach," he says. "It’s up to HR to help figure out how to develop assessments that will drive employees to think in this way."
Like many financial services companies, Citigroup must break through its silos to achieve Pandit’s vision for the company, says Kassel, who headed up global HR at Merrill Lynch for 20 years. Too often, financial services companies don’t view HR as a high-level function, but that has started to change over the past few years, she says.
"This is going to require Citigroup to give its HR executive real power," she says. "If HR exists apart from the executive team, then the team-based strategic goals are worthless."
Workforce Management, May 19, 2008, p. 1-3 -- Subscribe Now!