For a week now, newspapers have been filled with stories about insurance giant AIG wanting to pay out millions of dollars in bonuses to their top performing executives. Everyone’s upset — and rightly so — since taxpayers have bailed out the company and kept it alive. But what’s the answer? After all, bonuses are a good thing. It never hurts to give your best performers incentives for doing well — and the unit that got AIG in trouble was a relatively small division.
The vast majority of their managers and employees appear to have done an good job. But on the other hand, it goes against the grain to award millions of dollars in bonuses to leadership that couldn’t keep the company alive without a gigantic taxpayer funded bailout.
I believe the question is simple: Where are the visionary leaders inside AIG? They weren’t there when the numbers stopped adding up last year and the company started tanking. They weren’t there warning us, protecting the future, and watching the store.
And they’re apparently not around now when the company needs them the most. Here’s what a visionary leader would be doing at AIG right now:
1) Months ago, he or she would have canceled the lavish retreats the company had planned. He or she would have known the value of public relations and perception in a hostile economic time. Why alienate the very people who are keeping your company alive?
2) Knowing the government now owns roughly 80% of the company, a visionary leader would have anticipated the uprising from the taxpayers about the idea of paying out huge bonuses to company executives — particularly in such a short time.
3) Then a visionary leader would have inspired and motivated those executives to forgo those bonuses in favor of being part of the greatest corporate turnaround in history. Even at that high level, money isn’t everything, and if he or she could have created an environment of historical proportions, bonuses wouldn’t be the only thing keeping their top talent. People want to make history, and this team could have been at the forefront, leading their company — and an entire nation - out of this crisis.
4) A visionary leader would take ongoing responsibility. He or she would be speaking to the press, being in the public eye, and holding himself accountable. A strong leader that was willing to “take the heat” would win enormous credibility with the government and the people of this country.
In a business where the single most important key to success is confidence, the leadership at AIG has hasn’t shown much of it. The current CEO fears that if they don’t pay out the bonuses, he’ll lose his top talent. Maybe that wouldn’t be such a bad thing.
Maybe it’s time to clean house and start over.
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