Citi needs service management !

I had blogged earlier about Citi slashing IT jobs here. With the latest news about Citi planning to reduce the workforce by upto 45,000 employees, I have come to a realization that the company needs a re-alignment. I am not for the cause of re-org by breaking up the firm into pieces. What they have right now is a giant behemoth which no one would be able to grapple around. Even Reuben, a man who handled the asian currency crisis, denied to take up the responsibilities after Chuck Prince quit. To realize the synergies from their earlier mergers, Citi needs operations' experts in place.

Operations experts, huh? Then hire management consultants... outsiders, objective, etc etc...
The reality is - Citi is a listed company and consultants get chopped off when the cost constraints hover on the head of the middle managers. Consultants charge huge rates. Instead, Citi can directly buy this talent from the market as they need on-going success and not a one-time remedy. So, what qualities they need in their operations-experts?

Last week, the Wall Street Journal had this article on how "tough" bosses were the most successful bosses at private equity backed firms:

"We found that hard skills, which are all about getting things done, were paramount," says lead author Steven Kaplan, a professor of finance and entrepreneurship. "Soft skills centering on teamwork weren’t as pivotal. That was a bit of a surprise to us."…

Mark Gallogly, a co-founder of Centerbridge Partners, a New York private-equity firm, says the academics’ findings match many of his beliefs about what’s important in a CEO. He puts a premium on bosses who can hire well, excel at efficiency and execution, and can be aggressive but respectful. By contrast, public-company CEOs may need more soft skills to manage relations with wide shareholder bases and other diverse constituencies."

The academics found that these five traits were the most important to success…

1. Persistence
2. Attention to detail
3. Efficiency
4. Analytical skills
5. Setting high standards

…and these were the least important to success…

1. Strong oral communication
2. Teamwork
3. Flexibility/adaptability
4. Enthusiasm
5. Listening skills

My observations suggest these are the qualities that enable the low-cost highly scalable operations of some service providers (read Infosys from India, Neusoft from China, etc) to maintain their high margins vis-a-vis the snobbish consulting firms of the developed nations charging high rates at higher operations costs and lower margins.

Citi's services are mostly commoditized. They need to check out what's mentioned in Service Strategy module of Service Management's latest version 3 - differentiate on the outside and simplification on the inside ! If how's their question then they must start to operate similar to the PE controlled firms.

Citi - you have a long way to go - the results of all this will take atleast a few quarters - provided there is a mindset change amongst the existing employees.