Many multinational corporations are running out of fresh ideas to respond to the economic crisis. Instead of taking this opportunity to reinvent themselves and reboot the very business practices, beliefs and attitudes that has contributed to the current economic crisis, they choose instead to bury themselves deeper in those very same practices.
“He that will not apply new remedies must expect new evils for time is the greatest innovator.” Sir Francis Bacon.
“Insanity is doing the same thing over and over again and expecting different results.” Albert Einstein.
The two quotes above caused me to think about the state of innovation in the corporations that work in the financial sector.
If there is ever a sector desperately needing innovative breakthrough ideas, this would be it. And at the same time, it is also perhaps the most conservative and risk-adverse sector.
From my personal observations, and from anecdotal evidence gathered from friends who have first-hand experience in these sectors, the prognosis is not good.
In the midst of the shameful revelations of the Royal Bank of Scotland’s then chair Sir Tom McKillop, the very same bank actually spam-called me to offer me some too-good-to-be-true credit card deal. “Please go into debt with us, right now, on the phone…” (I don’t have any previous dealings with RBS.)
At least one large multinational corporation is actually increasing its financial reporting from monthly to WEEKLY. Not better reporting. Not more insights. Just the same reports, more frequently.
The existing reports are already filled with obfuscated, tempered, and out-of-thin-air figures – because the reporting system is too simplistic to accommodate the diverse coalface operations of the company. And of course there is fear. And as Deming put it so succinctly, "where there is fear there will be wrong numbers."
The monthly cycle is farcical not only from a workload standpoint (employees serve the system instead of customers) but also in its inability to factor in the geographically different banking processes and operation calendars.
The ex-executives of failed corporations like Lehman Brothers will eventually (if not already) find their way into still-healthy firms. (Not that I am bemoaning anyone getting a job.) And when they do, I am willing to bet that most of them will bring with them, consciously or otherwise, the exact same attitudes, ethics and values and got Lehman Brothers into trouble in the first place.
Do you work in the financial sector? Please share your thoughts and observations.