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The catastrophic failure of the entire banking industry in 2007-2008 is an appropriate place to start. If we look at Lehman Brothers, which was the bank that obviously is no longer with us, amongst all of that group, and you look at where they went wrong, it's quite illustrative of the endemic problems of management that the entire investment banking industry has faced. First of all, they were making shockingly poor risk-management decisions. That is to say, not only were they taking on completely unacceptable loans on to their books, and essentially losing billions of dollars in the process, they were also at the same time failing to capitalize on interesting new opportunities that rose their way. So they were making poor risk-management decisions, meaning, they were taking on bad risks and they were failing to take on good risks. A second category of errors were around the incentive system. Everybody knows about the egregious bonuses that the bankers were getting. But essentially the reason that was such a problem was first of all that it perpetuated a highly individualistic culture. They talked about "eating what you kill" in investment banking, which basically means that, if I am the person who sourced a particular piece of business, I expect to grab my share of the reward from it. And, of course, what that means is that cooperation and collaboration are essentially discouraged. Related to that, the incentive systems were perverse because they weren't actually related to the objectives of the banks. So in many cases for example, at Lehman certainly, the bankers were encouraged to essentially bring in business at any level of profitability. It was the gross volume of business brought in, not the profitability of that business that was the key factor. So the incentive systems were simply not aligned with the objectives of the bank. And taken as a whole, for me, Lehman Brothers was what I would call a vehicle for perpetuating the raw vices of capitalism. What I mean by that is there was no real higher order or raison d'etre for Lehman, its reason to exist was essentially to help make lots of individual people a lot of money. And taken as a whole, the Lehman Brothers' management model was highly suspect for the situation that it was in.

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Lehman Brothers & General Motors: contrasting models of failure

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