Owning Your Circumstances

The old cliché “there are two sides to every story” is generally true. A case in point is AIG—the insurance giant that was recently taken over by the government because of its financial failure. AIG’s new CEO Robert Benmosche, in an apparent effort to rebuild morale among the company’s beleaguered and uncertain employees, seems to be telling only one side of the story—the one that suggests government regulators’ are to blame for allowing AIG to destroy itself. CEO Benmosche recently told company employees, “It’s time the people in Congress stopped talking about you as the problem because you’re the solution. It’s not your fault, it’s their fault, it’s the regulators’ fault.”

Whenever you focus on only one side of the story—especially when it involves blaming others—you screen out certain facts that suggest you and others in your organization contributed to creating the circumstances you now face. AIG’s employees are, of course, the solution going forward, but they will experience trouble in obtaining the results they want and need until they own their circumstances—and that includes what AIG management and employees did or failed to do during the past several years that resulted in the company’s financial failure.

In difficult situations such as AIG’s, it’s always easy to feel wronged or persecuted—preferring to let yourself off the hook by blaming someone or something else. We acknowledge the reality that CEO Benmosche and AIG’s more than 100,000 employees face a very difficult challenge when it comes to rebuilding their once vibrant and reliable company. But we also know from experience that successful turnarounds depend on people throughout the organization owning the company’s circumstances, including the historical actions that created those circumstances. Here are some of the circumstances, in our view, that AIG’s management and people at all levels in the organization need to own, if they expect to move forward successfully:

•    AIG chartered itself as an S&L, the AIG Federal Savings Bank, in a maneuver to make the understaffed and non-insurance oriented Office of Thrift Supervision (OTS) its primary regulator.
•    AIG decided to enter high-risk financial services businesses such as commodities, currencies, energy, interest rates, and credit default swaps (CDS) on mortgage and financial companies.
•    AIG took collateral from its securities-lending business and invested it in the residential housing market, putting the company at further risk.
•    AIG steered independent auditors away from its books in the financial services area, publicly declaring on more than one occasion that there would be no losses.
•    AIG was leveraged 11 to 1 (assets to equity) compared to other insurance companies leveraged at 4 to 1.
•    AIG destroyed nearly $200 billion in market value.

To own your circumstances, you must find the heart to see both sides of the story, linking what you and your organization have done or failed to do with the reality of your current circumstances. Such a perspective requires that you replace your blame story with an accountable one. Seeing and owning the accountable side of the story, however, does not mean suppressing or ignoring the victim facts—regulation from an understaffed OTS obviously contributed to AIG’s problem—rather it means seeing the whole story, including the part that may not bode well for your ego or your organization’s pride. In AIG’s case, we sincerely hope that CEO Benmosche and the company’s employees can successfully turn things around in the weeks and months ahead.

Remember, owning your organization’s circumstances—even if you had little or nothing to do with creating those circumstances—will give you the perspective, judgment, and resolve necessary to bring about lasting change. Here are a few questions that may help you to more fully own your circumstances:

1. What facts or situations, which you knew to exist, did you choose not to acknowledge or assume they were someone else’s responsibility?
2. Can you cite and accept the most convincing point of the “other side of the story” that “they” are telling?
3. Were there warning signs along the way?
4. If you wanted to warn someone in similar circumstances not to let their organization make the same mistakes, what would you tell them?
5. What if you were to face this situation again, how would you act differently?
6. What could you have learned from previous similar experiences that might have helped you avoid or minimize the negative outcome?
7. Can you see how “not owning” your circumstances or your organization’s circumstances can prevent you from getting the results you and your organization want going forward?

The benefits of owning your circumstances more than compensate for the heart-wrenching effort involved because finding the heart to own your circumstances allows you develop the necessary commitment to change those circumstances for the better.