It is inevitable that you will at some point in your career face a situation that requires extraordinary courage under fire. For Citigroup, the world's largest financial services company, that time is now. So far, the response is not impressive.
Part of the explanation may be the insular nature of the Citigroup's culture. According to The New York Times, Citigroup's CEO Charles Prince worried about the risk posed by mortgage-backed securities in 2007, but received assurances that Citigroup's balance sheet was in good shape. How wrong can you be? Now Citigroup's new CEO Vikram S. Pandit is facing his biggest test.
There are two rules to follow in a crisis. Rule number one is this: Protect other people first; customers, employees and citizens. Not your shareholders or yourself. Protect the public and your customers, and the shareholders will follow. Why? Because the company's long-term reputation and goodwill are more important than any short-term risk to shareholder value or your own job security. Rule number two is a corollary to the first: Be prepared to reframe and expand your level of responsibility. In other words, accept responsibility even if you're not at fault. This may feel counter-intuitive, especially when someone else is clearly culpable. But reframing and expanding your level of responsibility will help lead you out of the crisis.
Consider this well-known example. In 1989, the oil tanker Exxon Valdez went aground in Alaska's Prince William Sound. Eleven million of oils spilled onto pristine shoreline. In the immediate aftermath, Exxon's CEO Lawrence Rawl was slow to accept responsibility. Instead he issued a flurry of press releases stating that the company was investigating the accident. The opportunity to quickly contain the spill was squandered. Hundreds of miles of coastline were fouled. Public furor built and the company’s reputation plunged. Several weeks passed before Rawl grudgingly announced that the company would take responsibility for the clean up. Eventually, thousands of workers and volunteers were mobilized to mop up the oil, save the wildlife, and minimize the damage to the extent possible. But Exxon’s public image was left in tatters because its immediate response was too slow. William Reilly, then head of the Environmental Protection Agency, said Rawl’s response was “a casebook example of how not to communicate to the public when your company messes up.” Rawl’s reputation never recovered.
In contrast, when a container of Odwalla apple juice contaminated by the bacteria e coli resulted in the death of a child in 1996, CEO Greg Stepensall stepped in right away and assumed personal responsibility. He recalled every Odwalla product. He paid out huge sums to the families affected by the tainted products. He held regular press conferences to ensure the public knew what was going on and how the company was responding. For more than a year, Odwalla retooled its production lines, adding flash pasteurization to ensure no future incidents could occur. Sales fell 90 percent but Odwalla survived with its reputation intact.
As the Exxon Valdez and Odwalla examples show, leaders have a clear choice in how they frame their response to a crisis. On the one hand, they can respond out of a “protect ourselves” mentality, as Exxon did in the Exxon Valdez disaster. Or leaders can think and act out of a larger ethical context, as Odwalla did. Citigroup has committed the financial equivalent of that catastrophic oil spill. Let's see how they respond.

Studies over the past few years have shown that trust can grow quickly among people from different backgrounds, given the right circumstances. As I've written before, high levels of trust is one of the cornerstones of great organizations. These new studies provide insights into exactly what kind of communication accelerates the growth of trust.
A New York Times article details this research. When two strangers are brought together for four, hour-long sessions and engaged in trust-building exercises, the results can be surprisingly long-lasting. In the first hour-long exercise, people share their responses to a list of questions, ranging from "would you like to be famous? In what way?" to "If you could change anything about the way you were raised, what would it be?"
In the second hour-long meeting, one pair competes against another in a series of games. In the third hour-long session, they talk about whether they are proud of their heritage and family background. Finally, in the fourth session, members of each pair take turns leading the other through a maze while blindfolded.
This research has fascinating implications for trust-building exercises in an organization. Our firm will often facilitate exercises with team members in which we ask them to talk about their proudest moment, or their scariest moment, and what they like most about the team, and what they like least. A second exercise consists of games in which teams compete against each other to fill a trash can with ping-pong balls and other silly tasks. A third session focuses on creating a shared vision of team success. And a fourth session often consists of trust-building exercises, such as leading a blindfolded partner through an obstacle course set up in the office.
These may seem trivial. But the research has shown the results to be long-lasting. These kinds of exercises create relationships "as close as any relationship the person has," said Art Aron, a social psychologist at Stony Brook University who developed the program described in The Times article ("Tolerance Over Race Can Spread, Studies Find"). http://www.nytimes.com/2008/11/07/us/07race.html?scp=3&sq=racial%20tolerance&st=cse

I've studied the leadership styles of America's presidents for the past 15 years. I particularly pay attention to the types of people that presidents like to have around them. It says a lot about a man’s (or a woman’s) character to know whether they encourage a difference of opinion, or whether they like to be surrounded by "yes" men. It’s a tipoff to whether a president has an open, curious mind, capable of learning and adapting, or whether a president is essentially intolerant of dissent.
Nixon and Reagan were famous for surrounding themselves with people who thought like they did. George Herbert Walker Bush, in contrast, invited a variety of opinion. Clinton is famous for changing his mind frequently - and being too undisciplined.
Reading The Sunday New York Times this week, I'm remembering the old McCain, the pre-campaign McCain who was always up for a good intellectual fight. Maureen Dowd's column asks pointedly, where did that McCain disappear to? I also remember the current President Bush in his Texas days, when he was seen as a uniter, not a divider. How did Texas George transmogrify into Guantanamo George? (For that matter, how did he wind up with Karl Rove and Dick Cheney?)
Obama is keenly aware of his place in history.  He's run a very disciplined campaign, a campaign that thinks strategically, looks at every option carefully, makes tough choices, and then executes. We need the same in the White House. We need to see the same Obama that we've come to admire during the campaign. The next few weeks will be interesting to watch as President Obama begins to assemble his team. It will tell us a lot about what we can expect over the next four years.