Zoe Cruz of Morgan Stanley is the latest high-profile financial leader to depart in the wake of the sub-prime turbulence. The current bloodletting increasingly appears to be more symbolic than rational
According to Forbes
Zoe Cruz was promoted to acting president in 2005, after a glittering career in the company she had joined twenty years earlier. Her promotion occured at a time of considerable board-room battles.
She was regarded as a supporter of Philip Purcell who controversially replaced President Stephan Newhouse and appointed Zoe Cruz and Stephen S. Crawford as Co-Presidents. Several senior figures left the organization at the time, presumably caught up in the in-fighting. Subsequently Crawford also left, and Cruz became the sole ‘acting’ president.
Capella University’s useful executive remuneration site reports that her compensation package amounts to $17 million, hardly big potatoes in these times for someone whose bonuses had pushed past $7 million a year in the recent past.
Financial correspondent Tom Bawden suggested that
The departure from Morgan Stanley of Zoe Cruz, Wall Street’s highest-paid female executive, has heightened fears that the firm is poised to unveil further mortgage-related writedowns. Her exit comes just three weeks after John Mack, the bank’s chief executive, is thought to have reiterated that she was his favoured successor. However, Ms Cruz, 52, was responsible for the division which made the loss-making mortgage investments and appears to have been sacrificed as the latest high-profile Wall Street victim of the credit crisis.
According to the report, the epithet Cruz missile is a reference to her combative business style. However, Mack had publically acknowledged her significant role in the company’s success over recent years.
Her departure has resulted in speculation that the dismissals have also created opportunities for the pool of available and talented executives such as Cruz. Mention has been made of Citygroup.
The BBC quotes a senior financial analyst, David Easthope
“The captains are going down with the ship. Whether they are rising stars or not doesn’t matter. The losses are so large and embarrassing to the organization that they are getting rid of people to satisfy the public perception that they are fixing things.”
Echoes here of tipping point theory of change.
The theory of tipping points, which has its roots in epidemiology, hinges on the insight that in any organization, fundamental changes can occur quickly when the beliefs and energies of a critical mass of people create an epidemic movement toward an idea.
Can we learn more about the nature of leadership as a symbolic process through study of the well-documented demise of high profile leaders?
Might the case anecdotes also permit an evaluation of the nature of tipping points within periods of change?