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February 10, 2009

The blindsiding of bankers

This is the age of social activism. It’s an age that was brought to life by the good - by the fun and exhilaration of youtube and grown by the bad - by disasterous earthquakes and desperate meltdowns.

Whilst we first came to know about networks via video and new kicks with pictures, we’ve got organized around events like China, bank charges and bonuses and the need for hope.

Social community is, at its core, about human connections and emotional bonds. It’s an age that supports self expression.

This doesn’t sit well with everyone. Rational, analytical types on the Keirsey Temperament Scale, for example, may view social communities as unattractive. One attribute of social communities is their random volatility, they are not all code. There’s also the question of how to measure the value of social communities, problematic in a risk averse and credit crunched marketplace.

Technology and goodwill, however, have the combined power to create seismic shifts in this.

The Treasury Select Committee is questioning the highly numerate Fred Goodwin  of RBS, Andy Hornby  of HBOS, Lord Stevenson and Tom McKillop to a packed crowd today at Westminster.


Picture courtesy BBC

And within this investigation of what went wrong with the banks, what’s transpiring is the extent of a tragic mismatch – between what was required to manage in changing circumstances and what we actually had.

The ground was shifting and there was no way to recognize it until it was too late.

Andy Hornby, ex head of HBOS has proudly stated how 5 members of the HBOS Executive Team had 150 years of experience between them. Experience in looking backward. They were blindsided.

They were blindsided too by an abject lack of consumer dialogue and a culture lacking conscience. As John Prescott and myself and others find potential for action in facebook, there’s clear and tangible evidence that the gulf between public opinion and Board perspective has hardly been wider.

A universal uproar at the dual principles that have been applied is in motion, the disparity between what expectations are handed down to the public around risk and reward and the management of credit and debit, compared what banks are claiming as principles for themselves.

Those protected by a bubble of assets, highly numerate and secure, are failing to grasp the emotional content that real life hardship is releasing. This is the kind of content that’s going back to the more primal connections and real life values that social networking fosters and allows.

Despite the fact that these bankers have gambled away huge sums of capital built up by shareholders and customers, with RBS losing £28 billion in the last year, Fred Goodwin walked away with £4.3m in bonuses.

That’s the paradox. The failure to grasp how it feels to hear that when others go broke for far less means that communities and trusted places are becoming places of some refuge, stimulating new ways of trade. Time for organization 2.0.


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