Last of Citi for a while

It occurred to me last night that it's likely that Citi management simply does now know some of the things that we used to know when we worked there. There have been so many JDs, so many redundancies, and so forth, that it's no wonder that some of the secrets of Citi's success in the old days have been lost.

I don't mean to trivialize them, but I've remembered four tests that were in fairly common use within Citi a couple of decades ago, and I thought I would write them down. Maybe they would work today.

--Six Words or Less: If you cannot describe a transaction or a project in six words or less, one of two things is happening. Either (1) the transaction or project is too complicated to be executed successfully, or (2) you don't fully understand the transaction. I think I heard this one from Bob White when he was running the Operating Group. (Current situation: "Buy a new corporate jet". No room left to put in the fluff about trading in the old ones. No room for penalty clauses. Just the essence of the deal. Do you do it? No way!)

--The Headline Test: Imagine you are a headline writer for the New York Post. (This is a NYC tabloid that has never been particularly friendly to Citi, for the information of those in other places.) Describe your transaction or project in the most sensationalistic way you can in headline style. I don't know where I heard this, but I used it successfully for more than a decade in the Loss Prevention Unit. (Current situation: "Bankrupt Citi buys new jet". Like it? Think it will sell papers?)

--The Tombstone Test: This is a little esoteric, but imagine that, when deciding to what to put on your tombstone, your heirs decided that this transaction or project was going to be it. Then ask yourself if you would like to be remembered for the ages for this particular transaction or project -- and nothing else. I don't remember the source of this one. Current situation: "He received a $10,000,000 bonus the year Citigroup got government aid".

--The Mother Test: Think of your kindly old mother, in her kitchen in her apron. Explain your transaction or project to her. Once she understands all the nuances of it, does she approve? Or would she send you to your room without your supper? I think I heard this one somewhere in the Marketing department in Citi's Consumer Bank, but I can't say for sure. Current situation: too many instances to mention.

--I'd like to propose an additional test that was prompted by something I recently learned, and I call it the School Test: Determine what kind of academic specialty this project or transaction is closely allied with. Determine what kind of education practitioners of this specialty have. Is this education sufficient that proponents understand and can evaluate all aspects of the transaction or project? Current situation: Did you know that, if you get the degree at Columbia that says you can design derivatives, it will be in "Financial Engineering". Interestingly, you do cannot get it from the Business School or the Department of Economics -- you get it from the Engineering School. No knock on engineers, but you do have to watch them. They get far too focused on how things work, and tend not to consider the bigger picture. Enough said.

Now, I'd like to stop trying to figure out how Citi did what it did and focus instead on more pleasant aspects of life. Best of luck to them in once again becoming a preeminent financial institution.