When Citicorp Chairman John S. Reed went looking for a tough-minded outsider to help him fix the troubled banking giant, Christopher J. Steffen seemed a natural. Never mind that in April, Steffen had abruptly left his job as chief financial officer of Eastman Kodak Co. after only 11 weeks. His blowup with Kodak Chairman Kay R. Whitmore was easily explained: Kodak's inbred, cautious culture couldn't tolerate a hard-charging turnaround specialist who was willing to wield the hatchet.
That was the story on Wall Street, anyway. Investors bid up Kodak's market value by $2 billion when Steffen arrived, only to take much of it away when he left. But an in-depth review of Steffen's hopscotching career across nine companies suggests that the 51-year-old executive has had persistent problems fitting in. And at a time when boards are increasingly turning to outsiders for help, Steffen's story underlines a simple fact: Personalities matter. "There's a fine line between finding outsiders who are different but not too different," says management guru David A. Nadler.
LONE WOLF. Wherever Chris Steffen has worked, the burly, deep-voiced executive has garnered raves for his intellect and keen financial skills. He is a master at squeezing profits from disparate assets and a voracious cost-cutter. While his methods are brutally effective, critics charge that his take-no-prisoners style relies too heavily on numbers. And his driving ambition has led to a history of clashes with colleagues--a curriculum vitae of discord that suggests his sudden departure from Kodak should not have been so surprising. "Chris always thinks he's right," says a former Chrysler Corp. executive. "It's a level of self-confidence that can get him into trouble."
BUSINESS WEEK also has discovered that the Kodak blowup echoes an abortive stint at a suburban Chicago company 12 years ago--a position Steffen leaves off his official resum . In January, 1981, a 38-year-old Steffen became CFO of a fast-growing steel-services company called Allied Tube & Conduit Corp. He left in March after 11 weeks. Chairman Theodore H. Krengel, who since has sold his company, says the two clashed when his new CFO began making changes without consultation and peppering board meetings with ideas he hadn't broached with his boss. When Krengel read of Steffen's Kodak troubles, he wasn't surprised. "The guy did the same thing to me," Krengel says. "He's the worst team player I've ever seen."
In his first interview since leaving Kodak, Steffen says he did work for Allied Tube--but mostly as a consultant. (Allied records show he was a full employee.) Steffen insists there was "absolutely no problem" between him and Krengel, noting that the story Krengel tells "is not how I remember it, but I'm getting on in years." As for the gap in his resum , Steffen says he has also left out part-time consulting and teaching jobs. "I don't have anything to hide. I have done pretty much what I represented in my resum ."
Even leaving Allied out of the equation, Steffen's background raises plenty of questions for John Reed and Citicorp. Chief among them is whether Citi has the kind of culture that can accommodate Steffen's abrasive style. At Kodak and Honeywell Inc., where Steffen was CFO from 1989 to late 1992, the intense executive created friction in collegial environments built on consensus. At Honeywell, at least, several board members say Steffen's perceived lack of "people skills" cost him a shot at CEO. Chrysler was different. As controller from 1981 to 1989, Steffen had his clashes. But he was a better fit within the auto maker's rough-and-tumble culture.
NAPKIN PLAN. A Detroit native, Steffen began his climb up the corporate ladder armed with a math degree from the University of Michigan and an MBA from Wayne State University. His financial skill and imagination emerged early. But so did his ambition. Several headhunters say he was well-known within their community as an executive willing to move. One recalls having as many as 20 phone conversations with him. Within one 12-month period straddling 1980 and 1981, Steffen changed jobs three times. He jumped from IC Industries (now Whitman) to Hyatt to Allied before finally landing the controller's job at Chrysler.
When he arrived, Chrysler was in the throes of restructuring after its dramatic government bailout. Steffen went right to work. "He was the best guy in the world at wringing cash out of the balance sheet," says Frederick W. Zuckerman, a former Chrysler financial executive who is now treasurer at RJR Nabisco Inc. Steffen was part of the inner circle at Chrysler that made life-or-death decisions about its future. Meetings often were intense, as executives heatedly hashed out plans. Some remember that Steffen would argue more strenuously than most--and didn't take it well when his views weren't accepted.
That attitude created friction with then-CFO Robert S. "Steve" Miller Jr. "Chris's ego started getting bigger," recalls another former high-level executive. "He thought he was better qualified to be CFO than Steve." Insiders say Miller, in turn, thought Steffen lacked an understanding of how the numbers interacted with the auto maker's business. The conflict never amounted to much, since Chrysler's culture tolerated disagreement among its strong-willed executives. "That was life in the boardroom at Chrysler," recalls one of them. "Iacocca was there to referee. When he made a decision, the arguing stopped."
Unable to move up at Chrysler after eight years, Steffen moved out--to Honeywell. Coming off a big 1988 loss and rumored to be a takeover target, the Minneapolis-based company was floundering. Executives had started planning a turnaround strategy by the time Steffen arrived as CFO in 1989. He helped distill the ideas into a simple, five-point plan that he sketched out on two restaurant napkins one night. Steffen later framed the napkins and hung them in his conference room, where they became a focus of resentment among colleagues who felt he was grabbing credit for a team effort. "For Chris to say it was his plan is stretching the point a bit," says Honeywell corporate planner Lawrence W. Stranghoener. "He wasn't a savior in and of himself."
"ISOLATED." While Steffen won plaudits on Wall Street as the turnaround plan unfolded, some Honeywell executives groused that he was acting like a cowboy. Rather than wait for a consensus to develop within Honeywell, they claim, Steffen would announce his ideas to investors and use the pressure generated to nudge internal compliance. Others applauded the strategy as a means to shake Honeywell from its torpor. Another common complaint is that Steffen didn't take time to understand Honeywell's complex operations. One manager says Steffen never even visited the Honeywell operations based near Minneapolis headquarters. "He approached things almost exclusively from a financial standpoint," says the executive. Echoes an outside director: "You have to know something about the rest of the company. He didn't. And if you don't, you have to show an interest in learning."
The discord between Steffen and Honeywell's two top operational executives became so acute in 1991 that then-Chairman James J. Renier tapped an outside "teamwork" consultant to help repair ties. John L. Brekke, the consultant, says the tension at Honeywell was no worse than he had seen at some other companies. Still, he adds, "Chris had a difficult time understanding what it meant to be a Honeyweller. It's a very caring organization. At times, he felt himself isolated."
Steffen won't comment on his years at Honeywell except to say: "You never leave a place where somebody doesn't say something." And certainly, a degree of antagonism is understandable: Steffen was a tough outsider brought in to shake up a sleepy company. He engineered the firing of thousands and the sale of a major division. "Perhaps Chris was a lightning rod for criticism from people within Honeywell who didn't like the steps we took," says Renier, who remains a fan. "Chris was a good CFO."
Personality conflicts--and his lack of operational experience--however, helped scuttle Steffen's ambition to succeed Renier. "When Chris arrived, there were absolutely no preconceived notions that he couldn't be CEO," says a director. But when it came time to choose, "there was no real consideration of him," the director says. "He's a very talented person, but he's got to learn that a company is not a gigantic machine. He has to be able to deal with people."
TREPIDATION. Kodak's Whitmore won't comment on how closely he looked at Steffen's background when he hired him as CFO. But he has said he wanted a tough guy. Like Honeywell, Kodak had been floundering for years. Three ineffectual restructurings, from 1985 to 1991, hadn't helped.
Even before he started work in Rochester, N.Y., though, Steffen was using Wall Street to guide the internal Kodak debate. In an interview with
BUSINESS WEEK soon after his appointment, he said Kodak should lower its ratio of debt to total capital from 59% to between 30% and 40%. It was a figure Kodak hadn't publicly embraced before, and it committed the company to selling off a major division. Then Steffen turned up the heat again when he promised investors a turnaround plan would emerge within six months.
Many on Wall Street began viewing the plan as Steffen's--an impression he did everything to encourage. And Kodak executives became sensitive that Steffen's public posture was usurping Whitmore's role. When BUSINESS WEEK wanted to interview Steffen for a profile in February, Kodak's public-relations department requested the article make clear that Whitmore hired Steffen--and was driving the turnaround plan.
At Citi, Steffen's arrival is being greeted with some trepidation. As a senior executive vice-president, he will take charge of internal operations, controls, and productivity programs at the bank. Some fear more cutbacks at a company that has already chopped roughly 17,000 jobs, or 20% of the work force, since late 1990. "Aren't we past the major cost-cutting?" asks one Citicorp veteran. "This has obviously increased the anxiety," says another.
As one of Citi's top six executives, Steffen will find himself in an intensely political environment perhaps more akin to Chrysler's than Kodak's. Sources say top executives aren't afraid to slug it out among themselves. "He's not going to come into a real friendly atmosphere, I'll tell you that," says one insider. But that's not likely to bother a guy like Chris Steffen.
STEFFEN'S CORPORATE WANDERINGS EASTMAN KODAK Hired amid great fanfare as CFO. Clashed with (Feb.-Apr., 1993) CEO Kay Whitmore and left after 11 weeks. HONEYWELL As CFO, helped forge widely admired turnaround (1989-1993) plan but didn't get along with several colleagues. Wanted to replace Jim Renier as CEO, but some board members believed people skills were lacking. CHRYSLER As controller, Steffen oversaw many cost-cutting (1981-1989) efforts. Said to be a wizard at squeezing cash out of inventory. Relationship with CFO Steve Miller somewhat rocky. ALLIED TUBE & Hired as CFO of this private steel-coating firm CONDUIT (now part of Tyco Laboratories), but quarreled (Jan.-Mar., 1981) with founder Ted Krengel and left after 11 weeks. HYATT As senior vice-president for finance, well regarded (Apr.-Dec., 1980) for financial acumen. Devised imaginative ways to track profits from hotel management contracts. EARLY CAREER Controller for IC Industries (now Whitman), auditor for Price Waterhouse, various other financial positions. Mathematics degree from University of Michigan in 1964. MBA from Wayne State University in 1967. DATA: BUSINESS WEEK