The “engine” of the current economic mess is losing total touch with the basics. That is: lending money to people, by the millions in the end, who “obviously” couldn’t pay it back. In many ways, that is the whole story—at the bottom of the bottom of the bottom of the pile of derivatives of derivatives of derivatives are truly stupid real-estate loans that “any fool” would say should never have been made.
We get in trouble when we forget the basics.
We get out of trouble when we remember the basics.
We stay out of trouble when we become perpetually “insane” about the basics.
(It ain’t quite that simple, but it’ll do for starters.)
When “times are tough,” the payoff, survival that is, comes from what?
Survival—even growth!—in bad times comes from having wildly “over”-invested in relationships and training and service and employee-customer-vendor loyalty, while behaving in a fiscally prudent manner, in good times.
Well, “Duh.”
I’m allowed out in public in 2008, in effect, because I wrote a book with Bob Waterman in 1982 (called In Search of Excellence) that said that Americans were in deeeeeeep trouble—vis-à-vis Japan at the time—because we failed to put people & service & listening to customers & making products that worked & doing-instead-of-talking & staying intimately in touch with “real stuff” at the top of our business agendas. We had placed too much emphasis on “sophisticated,” abstract, “MBA thinking” and not enough emphasis on the things that led over a thousand people to show up for my Grandfather Owen Snow’s funeral in little Wicomico Church VA over a quarter-century ago.
Grandfather Owen had run a country store—he’d been counselor, banker, and friend of customers and community, as well as shopkeeper, to thousands over the years. He was a math whiz (he passed a bit of it on to me, and thanks), but those thousands showed up at his funeral because he never forgot the basics of taking the time to listen and care and invariably put people first!
The great news for Fall 2008: The worst of the worst can be managed, within limits at least, if we remember and assiduously apply my grandfather’s Business Basics 101.
Does that sound simplistic?
Perhaps.
But remember: We’re deep in the deep doggy doo-doo because of “nothing more than” lending money to people who obviously (!!!) couldn’t pay it back.
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The CEO of a very successful mid-sized bank, in the Mid-west, attended a seminar of mine in Northern California many years ago—but I remember the following as if it were yesterday. I’ve forgotten the specific context, but I recall him saying to me, pretty much word for word, “Tom, let me tell you the definition of a good lending officer. After church on Sunday, on the way home with his family, he takes a little detour to drive by the factory he just lent money to. Doesn’t go in or any such thing, just drives by and takes a look.”
(1) Amen.
(2) Damn few drive-bys at WaMu or Countrywide, I suspect.