For the Barclays bankers who were fomenting a revolt to topple Bob Diamond earlier this week, the scene must have seemed eerily familiar. Most of them are veterans of Lehman Brothers, which Barclays acquired in 2008 following its collapse under Dick Fuld, the strong-willed executive who ran the firm for 14 years.
Diamond, like Fuld, built an investment bank virtually from scratch and ran it with absolute authority, yet was deaf to criticism and blind to the forces that weakened the institution and ultimately sank his leadership.
Diamond’s long tenure matched that of James Cayne, who led Bear Stearns for 15 years, right over a cliff, and was equally insular and defiant.
Bob Diamond
I remember meeting Diamond more than a decade ago, when I was an executive at Edelman. He was eager to hear advice about improving the reputation of Barclays and burnishing his leadership credentials. But he found it difficult to accept that the effort would take time to bear fruit, much like any investment. That was contrary to his hard-driving, traders’ mindset.
In the coming days, many will reflect on Bob Diamond’s tenure as the head of Barclays Capital and Barclays Group. He deserves credit for building a global investment bank, which is no easy task.
Diamond’s strategy in the 1990s was radical – building a bank focused on debt markets. He shunned the sexy but fickle M&A business and equity trading, which was fast becoming a commodity. Both were the norm among big banks, and Diamond endured years of snickering from the skeptics, but his model was highly profitable and survived market downturns better than traditional firms.
But despite his considerable achievements, Diamond mainly will be seen as another example of a CEO who stayed too long and enjoyed a board that too easily bent to his will.