Leadership by Geoff Colvin

Bank world's biggest critic busts out

February 19, 2009: 12:28 PM ET

Another most powerful woman escapes. Well, we used to say "drop out," but these days the parade of powerful people - men and women leaving big corporate jobs - is the greatest exodus we've ever seen.

The latest is Meredith Whitney, the influential bank-industry analyst at Oppenheimer & Co., who announced yesterday that she would leave the firm to start her own advisory business.

Her power perch is already unusual. She's the only woman on Fortune's Most Powerful Women list who doesn't run a major business or direct corporate strategy. Last year, at 38, Whitney busted onto our list for the first time, landing at No. 35. She's also the youngest woman in last year's rankings except for Google's (GOOG) Marissa Mayer, who landed at No. 50 at age 33.

Whitney's move is not that surprising, actually. I've come to know her pretty well this past year since I first had lunch with her in early 2008, three days after Citigroup (C) released its 10-K and Whitney was positively swooning over the financial data. This was a few months after she burst into fame - or infamy, some bank honchos would say - by predicting that Citi would be forced to cut its dividend to shore up its problematic balance sheet. She followed her Citi call with predictions of huge writedowns for Bank of America (BAC) , Lehman Brothers (BCS) and UBS (UBS), among other financial giants.

After Fortune put Whitney on its August 18 cover, employment offers from hedge funds, book offers from publishers and all sorts of other invitations came her way. She seriously considered writing a book but she opted out of that, following the advice of her mother. As her parents taught her and she learned from covering the banking industry, the worst thing you can do is build up expectations and under-deliver.

Here's the deal: Whitney got a little tired of her power base - moving markets and bringing down the bank stocks. That's a narrow claim to fame and one that was sure to endure for her because the financial-services giants are really sick, she believes, and the worst is yet to come for them. Lately she's been visiting D.C. and talking to various powerful people who can actually pull the levers that might fix the economy. "How can I help?" she's been asking.

Last month Whitney invited 25 powerful women to her Manhattan home to talk about how influential people can expand their power. The group included participants of the Fortune Most Powerful Women Summit, which Whitney attended for the first time last year.

In a Q&A with my colleague Katie Benner, Whitney credits the Summit with helping her determine her new life change. "It was the incredible women I met at the Fortune Most Powerful Women Summit that gave me the final push and confidence to go for it," Whitney said. "I am overwhelmed with support from incredibly inspiring people, many of whom I met at that conference."

In fact, at her home that evening last month, she said, "Creative construction is far harder and more challenging than creative destruction." So now Whitney is poised to construct. More power to her.


P.S. For news on another powerful woman who's finding ways to expand her influence, see my piece last week on former eBay (EBAY) CEO Meg Whitman's run for California governor.

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