Who’s Sorry Now? - Commentary by Jeffrey Sonnenfeld

“Who’s Sorry Now?”
By Jeffrey Sonnenfeld
Published January 7, 2010 on the New York Times DealBook blog 
Read the article in its original context on the New York Times website.

The Monday morning cable TV cacophony was silenced by the piercing lament of Jerry Levin, Time Warner’s former chief executive, as he told CNBC that “I’m really very sorry about the pain and suffering and loss caused” and reflected on the impact of the legacy of Time Warner’s failed merger with AOL. Of course, espoused remorse echoes weekly in this era of scandalized public figures, as fallen politicians, chief executives, entertainers, athletes and clergy desperately try to salvage their eroded public images and suffering careers after reckless personal misconduct and moral hypocrisy.
 
But this first business day of the new decade opened with a confession and apology that was quite different from the standard choreographed fare of a celebrity cornered over sexual misconduct or a rogue chief executive who plundered shareholder wealth. Instead, this acknowledgment of failure was from a respected business leader who stepped back into the public spotlight to voluntarily assume responsibility for bad professional judgment.

This is not a common occurrence. Connie Francis, a leading pop singer in the 1950s and 1960s, earned a gold record for the song “Who’s Sorry Now?” This success was followed by the song “I’m Sorry” by Brenda Lee, a 15-year-old American country pop singer, which become the No. 1 hit on the Billboard Hot 100 singles chart in July 1960. Fifty years ago, we rushed to buy songs of apology as ice breakers to play before trying to accept fault. Donald Burnham, the chief of Westinghouse 50 years ago, regretted his own “subpar” performance in his final message to shareholders.

Ah, but then the 1960s came, and in 1970 the movie “Love Story” reassured us that “Love means never having to say you’re sorry.” Now, Lady Gaga tops Billboard’s charts with a song called “Bad Romance,” which celebrates revenge. In our litigious society, we blame each other, and maybe try to get even, but we don’t take the blame.

Thus, such failed chief executives as Carly Fiorina of Hewlett-Packard, Bob Nardelli of Chrysler and Home Depot, John Akers of I.B.M., Dick Fuld of Lehman Brothers, Jimmy Cayne of Bear Stearns, Rick Wagoner of General Motors and Ken Lewis of Bank of America passed the buck so it stopped somewhere other than their own desks, even though the accountability was clear. Instead, they terrorized columns of their own lieutenants who were offered as scapegoats for failure at the top.

Indeed, depending on which investigators asked which questions, Mr. Lewis inconsistently blamed Merrill Lynch’s top leaders, Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke, homeowners, persistent members of Congress like Representative Maxine Waters and the systemic collapse in general — but never himself.

In fact, in an article in The New York Times this past weekend, Sandy Weill — the former chief executive who built the dizzying juggernaut of Citigroup and then left just before its collapse, requiring public bailout to survive — blamed his successor for the failure. Mr. Weill defended his own strategic vision behind the architecture of the enterprise, as if his responsibility for management staffing was not just as important as asset purchases. Ah, if it were not for that pesky matter of management execution and judgment. In fact, Colgate’s former chief executive, Reuben Mark, quit the Citigroup board because of its inadequate succession planning.

This is reminiscent of the time when, in the 1970s, Mayor Frank Rizzo of Philadelphia angrily replied to media criticism over the safety of Philadelphia streets, claiming, “Our streets are perfectly safe; it’s the people on them that are the problem!”

Such finger-pointing is surely not unique to any one sector. The new decade sadly opens an accountability vacuum in government, in which no officials responsible for the failure of our elaborate intelligence gathering apparatus, airport security passenger screening systems or antiterrorism strike forces shared the known evidence that could have prevented a would-be suicide bomber from boarding a packed airplane. Instead, we see officials blaming each other and the lax procedures of other nations when the United States issued the travel visa to the accused culprit.

After President Obama’s post-mortem investigations on air travel safety this week, responsibility remained unclear. When the homeland security secretary, Janet Napolitano, asserted that “the system worked,” she must have meant that each plane must be staffed with an observant Dutch filmmaker, since that was the courageous fellow passenger who subdued the attempted bomber.
Similarly, after public outrage last spring over the size of retention bonuses paid by taxpayers to the leaders of failed enterprises such as the American International Group’s financial products unit, Senator Christopher J. Dodd, chairman of the Senate Finance Committee, and Treasury Secretary Timothy F. Geithner became targets for blame from some people. Others blamed the Fed. In the end, the Treasury’s inspector general, Neil M. Barofsky, had to come in to investigate the accountability.

At least, Alan Greenspan, the Federal Reserve’s former chairman; John J. Mack, Morgan Stanley’s chairman; Lloyd C. Blankfein, Goldman Sachs’s chief executive, and Jamie Dimon, JPMorgan Chase’s chief executive, showed that financiers can be contrite, even though the prescient Mr. Dimon did little wrong. Jet Blue’s founder, David Neeleman, also once set a record for 27 media apologies in a single day after excessive flight delays.

Of course, the previous presidential administration was hardly immune from this diffusion of responsibility as we were reminded by the buck-passing over the failed Hurricane Katrina response, with President George W. Bush’s delayed reaction and the actions or inaction of Michael Chertoff of Homeland Security, Michael Brown of FEMA, state and local officials and others until the Bush administration began its chant against “the blame game” — thus mocking accountability.

Poignantly, of all the miscues in the Iraq war, the responsibility over the Abu Grahib prison fiasco was so confusing that even the military’s thorough report on it only raised more questions to Congress. Under intense questioning from Senators John McCain and Hillary Rodham Clinton, Defense Secretary Donald H. Rumsfeld asked Gen. Richard Myers, then the chairman of Joint Chiefs of Staff, for the poster they made up to show who was really accountable — and it turned out that they had forgotten to bring that chart to session!

By contrast, consider the simplicity of Jerry Levin’s simple acceptance of blame for the failed $350 billion combination of Time Warner and AOL, despite the wisdom of the original cross-media vision declaration this week:

“I take responsibility. It wasn’t the board. It wasn’t my colleagues at Time Warner. It wasn’t the bankers or the lawyers — and there were a lot of them … I am not going to blame any predecessors or successors. I helped pick them and I have great respect for them,” he said. “I presided over the worst deal of the century, apparently, and it is time for those involved in companies to stand up and say, ‘You know what, I am solely responsible for it, I was the C.E.O., I was in charge.’”

Who cares, since Mr. Levin’s apology doesn’t restore the billions of investor wealth lost? Sure, such a confession itself helped relieve an enormous burden of unexpressed guilt from Mr. Levin. It may have been late, but having spent time with him over the years, I know it was genuine. The American people are enormously forgiving — but the requirements for such forgiving include acknowledgment of responsibility, remorse and contrition, as well as atonement or reform. Regardless of relieving guilt and even considering redemption, it is important to know just what went wrong to prevent future disasters.

Finally, it is refreshing to dispense with Congressional hearings, special prosecutors and litigation to save some money and hear someone say, “I’m sorry.” Jerry Levin reminds us that our leaders need to stop blaming TARP, Sarbanes-Oxley,Y2K, Congress, the other political party, the other side of the world, El Niño, global warming, their competitors, their boards, their predecessors and their parents. The painter Robert Motherwell once advised that “one wonderful thing about creativity is that … there’s always the anguish, the pleasurable challenge.” Leaders should welcome the problems before them and take ownership, since it is those problems that give them a job.

Jeffrey Sonnenfeld is the Lester Crown Professor in the Practice of Management at the Yale School of Management and an author of “Firing Back: How Great Leaders Rebound from Adversity.”