5 Things You Can Learn from a Run on a Bank
Lessons we can all take into our daily lives plus a magical podcast to help improve your sleep.
In Never Stop Learning this week I will be covering the following 1-2-3:
One Big Thing - 5 Things You Can Learn from a Run on a Bank
Two Recommendations - a podcast to revolutionise your sleep and an article explaining all this crazy bank stuff.
Three Actions to take this week
One Big Thing - What You Can Learn from a Run on a Bank
Just to add to the list of crises going on at the moment, we have the makings of a full blown banking crisis. There’s lots of commentary on this across the internet so I wont go there specifically today but the idea of bank run is absolutely fascinating.
However, this can quite easily apply to our own personal situations, especially at work.
So what is a run on a bank?
My first experience of what a bank run was probably the same as many young children. That scene from Mary Poppins. Jane and Michael Banks have just deposited their money in their father’s bank but after asking for it back and being refused all hell breaks loose.
Word quickly spreads that a customer has been refused their money and before you know it all the customers want their money back too. Trust and confidence in the bank had gone. People wanted out.
The “problem” with banking is not usually a problem at all. Banks don't hold enough cash to suddenly give every customer their money back. Mostly, this is because it’s tied up in long term investments that simply cant be sold to convert to cash in that short an order.
So the bank collapses under the strain of its customers requesting their deposits back.
The thing about trust and confidence is that its built slowly over time but it can take very little for that to evaporate:
“Trust arrives on foot and leaves on horseback” has been attributed to Johan Thorbecke, the Dutch politician who was responsible for our first constitution in 1848.
So how is this relevant for us?
The same rules of trust building and the potential to lose that trust apply equally to our own personal lives and especially at work.
Quite often we see people build their careers over a long period of time, climbing the greasy pole but it is one mistake, one error of judgement on a cold wet Tuesday morning when you weren’t quite paying attention that can blow up.
Suddenly all that trust is gone.
So, this got me thinking about what are the big elements that need to come together to minimise this risk for you.
This is where I ended up. I hope you find them useful.
1. Be as transparent as you can
As you build trust slowly over time one of the big elements that enables that is being transparent. Basically this is allowing people in to your world to see how you operate.
What you don’t want to be is a black box. This may work in normal times to some extent but when stuff hits the fan your colleagues, customers and stakeholders will be in the dark as to what you do behind the scenes.
Suddenly all eyes will be on you. You may have people who have trusted you along the way but they will now be struggling to fight your corner.
2. Build sound processes
If you’re going to let people in and be more transparent you are going to need to have some sound processes to show them. That’s obvious.
But, most importantly if you have sound processes and something goes wrong you will be able to quickly identify the cause and correct it.
There is nothing worse that you boss calling you up as the crisis kicks off and you haven’t got a clue where to start with a solution!
Good processes will help you nip any crisis in the bud.
“It’s solved, no need to worry guys. It could have been bad but we’ve solved it and better still we know how to stop it happening again.”
3. Be honest about what happened
To some extent this is a deposit down on building your trust back again. If people know you to be honest in the good times, they are more likely to stick with you when things get sticky and trust you to solve it.
Trying a cover up is never never never a good approach!
You will be found out eventually or spend the next five years trying to keep a lid on the truth actually getting out. Not worth it!
4. Building Relationships
Trust is ultimately built on relationships. So what you must do is build a good network of relationships in the good times that can then help you out if things get sticky.
Leading with empathy will help build a team that pulls together and gets behind you in those times.
The flip side is pretty bad. Imagine the news has broken that something your team has produced has cost the company £3m. If you don’t have that team togetherness imagine how toxic that could become.
If you haven’t put in the time to build the team morale, people will end up blaming each other rather than actually looking to solve the problem.
5. Be humble and strive to continually learn and improve
Being humble is about ensuring that you don’t become complacent. From day to day to day you can, if you’re not careful, become complacent about the processes that built the confidence in the first place.
Continually check that processes are being followed.
And then ensure that there is a culture of continuing to learn and evolve new ways of doing things that will keep things fresh.
In Conclusion
On reflection, a lot of this is similar to preparing for an exam. Once you get to the exam there really isn’t much else you can do apart from execute based on your preparation.
Building trust and maintaining that through a crisis is similar.
Get the building blocks in place and you have the best possible chance to minimise the risk of a crisis and if something materialises you will be in a good place to deal with it.
I hope this was useful and a chance to reflect on ways we can all build a little more resilience to the way we work to ensure we build trust through the good times and maintain it when things go wrong.
Feel free to join the conversation in the comments below.
How do you ensure you maintain the trust of people you work with or with your customers?
Two Recommendations - what to consume this week
1. Why was there a run on Silicon Valley Bank? - Noahpinion
If you’re wondering what’s going on in the financial markets this week take ten mins and read this article covering the basics of a bank run and what’s going on with SVB bank. Fascinating stuff.
2. Matthew Walker: The Worlds No.1 Sleep Expert, Diary of a CEO Podcast
Everything you need to know about sleep and the benefits it can bring to your health. Wow. This was a great listen.
Who would have thought that the half life of caffeine is 6 hours?! So if you have a cup of coffee at lunchtime, that is the equivalent of having a quarter of a cup of coffee just before you go to bed.
Three Actions To Take This Week
My vision for this newsletter is to provide you with weekly actions that you can take away and use in your life in the coming week. So, here are three things you could try this week:
Have a bash at some AI Art! - Good place to start: https://www.midjourney.com/
Book some time off work - we all need a rest but its all too easy to leave it too long to step away from work for a small time before it consumes us. Give yourself something to look forward to.
Plant some seeds - here are my salad plants! Just great to have something growing once more. Spring is almost here.
📝 Other Newsletters I Recommend
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- uplifting and actionable insights. - observing the human condition from totally new angles. - totally new ways to look at the world we live in.If you’d like to cross promote your newsletter please drop me a line in the comments below.
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Great Post :)
Thanks for the shout-out!