Self-help from Bill Rhodes easier read than done

May 13, 2011

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Antony Currie

It’s hard to quibble with what Bill Rhodes has accomplished. That much is obvious from the veteran banker’s career battling the world’s major financial crises. He reviews many of them in “Banker to the World,” a well-paced account of his 50 years in the business. He eschews a traditional memoir in favor of a more didactic approach: the book’s subtitle is “Leadership Lessons from the Front Lines of Global Finance.” But for all his strengths, Rhodes is no management guru.

It’s not that the various mantras in each of the eight main chapters are worthless. Far from it: combining the ability to lead boldly and decisively, using consensus building and standing up to opposition for what’s right creates a potent mix. It also helps to have someone willing to muck in rather than leave all but the glory to underlings. Rhodes recalls, for example, how he personally tracked down Mexico’s finance minister, Jesus Silva Herzog, who had gone missing amid tense debt negotiations in 1982. Herzog feared revealing news of his appendix operation would be more alarming than going AWOL.

Years of globetrotting from Latin America to the Far East clearly attuned Rhodes to cultural sensitivities lost on many in banking and government he encountered along the way. But in most cases, Rhodes fails to provide sufficient detail about how he arrived at the important decisions in his many travels.

More significantly, Rhodes doesn’t tease out enough of the subtleties to enable readers with higher ambitions to follow his lead. For instance, at one point he advises that a true leader knows how to overcome “timorous advice.” But what may seem timorous advice to one person may be a much-needed warning to another that the boss isn’t paying attention to all the relevant facts and risks. Many younger bank bosses probably regret overruling an underling’s exhortation to get out of a particular product area, sell assets or raise capital on the basis that the consigliere was being cowardly.

There’s also hardly any mention in the book of how Rhodes coped with mistakes — surely the hallmark of any great leader. He does acknowledge some of the fiscal reforms imposed in sovereign bailouts of the 1980s and 1990s were “probably overly austere” imposing “undue hardships on the countries’ citizens.”

Rhodes also clearly feels he should have pushed much harder in 1998 to persuade Citicorp’s then chief John Reed to merge with the old Bank of America BAC.N instead of Sandy Weill’s Travelers. But that’s about it. Rhodes conspicuously omits views about his own longtime employer’s nearly collapsing in 2008 despite his several well-publicized prognostications of doom about U.S. credit.

But if Rhodes isn’t on par with Peter Drucker, his message still resonates. The book is a well-timed, and timeless, admonition that leaders should always be on their guard against taking undue risks. “Clearly,” Rhodes writes, “time and time again, economic and market trends were not accurately assessed when the initial investment and financing decisions were being made.” There’s surely a case to make for tattooing the message on foreheads of bank executives.

Moreover, it is by and large a good read, especially for his fellow bankers. The book may not quite work as a guidebook, but by choosing this route Rhodes has avoided the trap that befalls most traditional memoirs. This is no long-winded trip down memory lane that bores all but the most devoted. Instead, he tries, and largely succeeds, in picking the most illuminating moments of his career.

Nor does he overdo the colorful flourishes. Gun-toting female Sandinistas and personal gifts from Fidel Castro help bring events to life. And Rhodes appears to be one of the few people to have both silenced and won the respect of Zimbabwe’s Robert Mugabe.

The problem, however, with trying to apply the prescriptive lessons is that Rhodes is unique. He was in the right place at the right time 30 years ago, just as Latin America’s debt crises needed a person with financial, diplomatic and ethical skills to corral all involved. That success built on itself as other countries fell victim to similar forces in the ensuing two decades. No other bank had such a powerful all-round statesman. Few nations can boast one, either. The skill is almost impossible to teach. And though Rhodes may not have succeeded with the contents of his book, its mere presence on any desk might serve as a useful reminder of what can be done.

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