As the commercialism of Thanksgiving fades into the commercialism of Christmas (or whatever name you’re allowed to call it these days), several thoughts have occurred to me that will impact you as a person, you as a salesperson, and your business.
People try so hard to express good cheer in the holiday season they often miss the mark. “Don’t eat too much turkey!” or “Don’t drink too much eggnog!” is your way of saying, I have nothing new to say.
My bet is your ‘thank you’ is somewhat like your mission statement. It’s there, but it’s relatively meaningless, and no one can recite it. (Most employees, even executives, can’t recite their own mission statement, even under penalty of death.)
HARD QUESTIONS:
Why is this the only season we give thanks?
How sincere is your message, really?
Why do you find it necessary to thank your customers at the same time everyone else is thanking their customers?
If you’re thanking people, what are you offering besides words to show them you value and care about them?
Why do you have a shiny card with a printed message and foil stamped company signature – and NOTHING personal?
HERE’S AN IDEA: Why not start by thanking yourself? Thank yourself for your success, your good fortune, your health, your family, your library, your attitude, your fun times, your friends, and all the cool things you do that make you a happy person.
If you’re having trouble thanking yourself, that may be an indicator that things aren’t going as well as they could be. In that situation, any thanks you give to others will be perceived somewhere between ‘less than whole’ and ‘totally insincere.’
I don’t think you can become sincerely thankful to others until you have become fully thankful TO yourself and FOR yourself. And once you realize who YOU are, your message of thanks will become much more real, and passionate, to others.
NEWS REALITY: The good news is this is the holiday season. The bad news is it’s so full of retail shopping incentives, mobs of people, and ‘today only deals’ that the festivity of Thanksgiving is somewhat lost in the shuffle.
Black Friday and Cyber Monday – or wait, is it Cyber Tuesday, or Small Business Saturday, or Throwback Thursday? Whatever it is, it’s a strategy for advertising and promoting. And I’m okay with it, totally okay with the free enterprise system, I just think the hype of it has become more dominant than the giving of thanks and the meaning of the season.
Call me old-fashioned, or call me traditional, but I don’t think you can call me ‘wrong.’ I want our economy to be strong, but not at the expense of celebration, family time, and personal time to thank yourself for who you have become, and who you are becoming.
TRY THIS: Sit around your dinner table this Thanksgiving and have each person at the table make a statement as to what they are grateful for and who they are grateful to. Then have them say one thing about themselves that they are thankful for.
This simple action will create a sense of reality around your table that will be both revealing and educational. It also wipes away all the superficial undertones often associated with family holidays.
Why not ask people to recall their best Thanksgiving ever, or the person they miss the most, or the most important thing they’ve learned as a family member – and to be thankful for them or that.
BACK TO YOU: Sit down and make a list of your best qualities. Your personal assets, not your money or your property. The assets you possess that you believe have created the person you are. Your humor, your friendliness, your helpfulness, your approachability, your trustworthiness, your honesty, your ethics, and maybe even your morality. (Tough list, eh?)
And as you head deeper into this holiday season, perhaps next year’s intentions and focus (not goals and resolutions) will be more about building personal assets and building capabilities you can be thankful for and grateful for.
For those of you wondering, “where’s the sales tip?” Wake up, and smell the leftovers! I’m trying to help you sell you on yourself.
Once you make that sale, once you become the best you can be for yourself, then it’s easy to become the best you can be for others, and present yourself in a way that others will buy.
It’s the holidays baby, go out and thank yourself!
Reprinted with permission from Jeffrey H. Gitomer and Buy Gitomer.
About the Author
Jeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at [email protected].
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The current social strategy of many Marketing and Ad Agencies goes something like: “It doesn’t matter if the content is good, as long as we get a celebrity to tweet it, the thing will go viral!”
The prevailing consensus is that if a Kim Kardashian or Justin Bieber tweets your content out to their followers, the inherent size of their audience will cause a viral loop, exploding the campaign into the news feeds and inboxes of everyone and their grandmother.
This fallacy is perpetuated by the ‘hip,’ ‘disruptive’ agencies as they focus on buzz words like ‘share-ability’ and ‘social’ (read in a loathing, sarcastic voice while I make air quotes). If a campaign has a presence on every social network in the known universe, with custom widgets that all connect to each other, then its success is just a matter of turning a key and watching the crowd swarm. Right?
Wrong.
This strategy is not only absurdly lazy, but is ineffective, irresponsible, and even a little offensive to the intelligence of your desired audience. And yet, campaign after campaign saturates the Internet, towing along promises of fame, virality and ubiquity.
Any producer or agency that has had an Internet hit will tell you that content?s value, not “share-ability,” is the most important key to virality.
Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:
Christiano Covino is the CEO and Founder of Mischievious Studios, a digital entertainment studio based in Hollywood, California. Mischievious Studios works to blur the line between advertising and entertainment by creating entertaining online commercial content and engaging brand-sponsored entertainment (Branded WebSeries, Films, Sponsorships). Mischievious Studios also produces and programs content for MischiefTube their YouTube channel that receives over 30 million views annually. When not creating a splash online, Mischievious Studios develops and produces feature films. Passionate about innovation, Christiano helps Mischievious Studios stay on the cutting edge and develop new opportunities in the fast-changing entertainment landscape.
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To most people, bureaucracy is a bad word, synonymous with ‘red tape’ and wasted time. Yet, despite the negative connotations, most companies still operate bureaucratically – insisting employees work inside of increasingly complex structures with processes and procedures designed to standardize or control everything. While this might have been the most efficient way to train assembly line workers during the Industrial Era, human capital is now the greatest resource for most companies. In other words, we’re paying people to think, to innovate, and to collaborate with others to produce the best possible results. You can’t achieve this level of performance if you attempt to dictate their every move with rigid policies and procedures.
The fall of many of our great companies – including GM, Chrysler, AT&T, DEC, and a host of others – is a testimony to bureaucratic blindness. Unfortunately, contemporary management theory offers no alternatives to this style of organizing work and designing organizational structures. Current hierarchically oriented systems – no matter how lean and ‘matrixed’ – are relics of the bygone era of WWII industrialization and manufacturing.
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Chris Majer, Founder and Chief Executive Officer of The Human Potential Project, is the author of The Power to Transform: Passion, Power, and Purpose in Daily Life (Rodale), which teaches the strategies corporate, military, and sports leaders have used to positively transform themselves and their organizations in a way readers can adept to their own lives and professions. He may be reached at www.humanpotentialproject.com.
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This year, 2013, marks the 100th anniversary of the Federal Reserve System, and central bankers are taking a historical perspective. That is “good advice in general,” Fed Chairman Ben Bernanke told attendees at the Fourteenth Jacques Polak Annual Research Conference, in Washington, D.C earlier this month.
“An appreciation of the parallels between recent and historical events greatly influenced how I and many of my colleagues around the world responded to the crisis,” Mr. Bernanke said.
He went on to describe the similarities between the banking crisis of 1907 – the one that inspired the formation of the Federal Reserve – and the more recent 2008 financial crisis.
Both fit the archetype of a classic financial panic, Bernanke said. Both crises started in an economy in recession and both suffered from a sudden lack of liquidity.
In 1907, money was tight in part due to the rebuilding of San Francisco. After the Bank of England raised its discount rate, causing more gold to flow out of the US, New York was left with unusually low monetary reserves just as it entered the cash-intensive harvest season, explained Ellis Tallman and Jon Moen in a 1990 article about the Panic in the Atlanta Fed’s Economic Review.
In the more recent crises, Bernanke explained, liquidity started to dry up when housing prices declined, and subprime mortgage defaults rose in 2007. As the underwriting weaknesses of subprime portfolios became known, banks stopped lending to each other, paralyzing credit markets. By 2008, losses from these portfolios were causing banks to fail.
In both crises, a tinder-dry credit environment made them vulnerable to sparks. In 1907, the fire started when F. Augustus Heinze and C.F. Morse tried and failed to corner the stock of the United Copper Company. The investigation into the scam revealed an intricate web of corrupt bankers and brokers. (Heinze was president of Mercantile National Bank, and Morse served on seven New York City bank boards.) When the president of the second largest trust in the country was implicated in the copper cornering con, depositors started a run on Knickerbocker Trust.
Without a central bank, the availability of liquidity depended on the discretion of firms and private individuals, Bernanke explained. The Lehman Brothers moment of 1907 came when New York’s financiers, led by J.P. Morgan, were unable to value the trusts, and refused to ‘bail out’ Knickerbocker. (Unregulated and a relatively new innovation, trusts were the ‘toxic assets‘ of the 1907 crises. Trusts, however, were financed by consumer deposits, while the toxic asset of 2008 were securities contracts held by investment banks.)
Their refusal prevented other institutions from offering aid, and depositors started a massive run on banks and trusts, exacerbating the liquidity crises. (In 2008 a loss of confidence in the banking system did not turn into a consumer run on banks primarily because of FDIC deposit insurance.)
Morgan et al realized that a failure of the trusts could spread to the entire financial system, and they ultimately convinced John D. Rockefeller and others to pony up enough cash to stabilize the markets.
Similarly, American lawmakers eventually agreed that failure of the nation’s largest financial institutions was not an option, and passed the $700 billion Trouble Asset Relief Program in October 2008 (reduced to $475 billion by the Dodd-Frank Act). This program was designed “to strengthen market stability, improve the strength of financial institutions, and enhance market liquidity,” according to the Federal Reserve.
A major difference between the two crises, that I can see, is the popular perception of these liquidity liberators. In 1907, Senator Nelson Aldrich called the actions of JP Morgan and crew heroic. In his arguments for centralized banking reprinted in the New York Tribune, he warned that without it “men may not be found in another emergency with the patriotism, courage and capacity of those who in this crisis rendered such inconspicuous and invaluable service to the financial interests of this country.”
But in the 2008 crisis, when taxpayers rendered this very same “invaluable service,” people stormed the streets in protest. From the tea party conservative to the Wall Street occupier, hatred of the bailouts was met with bipartisan vehemence.
So why is it that when a handful of wealthy individuals restore liquidity to a broken system they are courageous patriots, but when it’s taxpayer’s, lawmakers are voted out of office? Perhaps the vehemence comes from how the money was used. In 1907, it was to save consumer’s retail deposits, in 2008 corporate wholesale funds.
As Bernanke explains in his speech, seeking to stem the panic in wholesale funding markets, in 2008 the Fed “extended its lender-of-last-resort facilities to support nonbank institutions such as investment banks.” This had little direct impact on consumers. As Fed governor Daniel Tarullo recently said “the savings of most U.S. households are generally not directly at risk in short-term wholesale funding arrangements.”
In 1907, on the other hand, ending bank runs meant “widows on the corner” could cash their checks, shop-owners could feed their families.
Another problem with the 2008 solution, from the popular perspective, was the moral hazard it created.
Senator Aldrich worried that courageous individuals might be hard to find in a financial emergency, and it appears he was right to worry. Senior executives in 2008 were not interested in rendering an inconspicuous service to the financial interests of the country. They didn’t even want to forego their bonuses. But in trying to account for the rarity of courage, lawmakers in 1913 may have created a system that prevents it from emerging.
A July 2013 Congressional research report articulates a challenge for today’s central bankers. “Although ‘too big to fail’ (TBTF) has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008… If a TBTF firm believes that the government will protect them from losses, they have less incentive to monitor the firm’s riskiness because they are shielded from the negative consequences of those risks.”
In 1907, the wealthy elite pooled their resources to prevent the failure of banks and trusts, saving millions in consumer deposits. In so doing they bore the brunt of the consequences of their risks, and Americans considered them heroes for it.
About the Author
Cara Wick writes about American financial and political history at www.bankersnotes.com. She holds a BA from Williams College and an MBA from the University of Iowa. Cara can be reached at [email protected].
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Is there a way to tell if I’m an ‘at-risk’ leader?
StrategyDriven Response: (by Roxi Hewertson, StrategyDriven Principal Contributor)
Sure. You can ask yourself the questions below to get a good start and then you can and should regularly ask for direct or anonymous constructive feedback from your direct reports, peers, leader and others. You attitudes and behaviors are the biggest differentiators for leadership success. The four well researched core emotional intelligence metrics of: Self-Awareness, Self-Management, Social Awareness and Relationship Management are directly correlated with successful or failing leadership.
Here are some key attitudes and behaviors to pay attention to because just being proficient in your technical area of expertise ignores the fact that a leader’s success is highly dependent on others’ contributions.
Ask yourself, do I…?
Read/understand emotions and recognize the impact of them on self and others. By developing an accurate view of, and aptly managing, one’s own emotional responses to situations, the rest of you skills and talents are magnified and leveraged. You regularly seek feedback and acknowledge when your impact and intent are out of synch. ?
Know your strengths and limitations. The best leaders understand they can never know and do everything… and don’t pretend to. Instead, they recognize what they are good at and leverage those skills. You surround themselves with people who are smarter and more experienced in areas where you have gaps, and you listen to them.
Know and have a good sense of your own self-worth and capability. There is a big divide between confidence and arrogance. Confidence comes from a strong sense of self-worth and self-awareness. Arrogance comes from fear in many cases, and a sense of entitlement in others. You are confident based on an objective, not assumed point of view.
Think and act with optimism – see the ‘upside.’ There are two kinds of world view attitudes people project in the world—those who think and act through the lens of abundance, and those who think and act through a lens of scarcity. You go for solutions, new ideas, and silver linings, even in the worst of times. You may change course, but you never give up. You thoughtfully navigate your staffers to a better place – often to places they didn’t know or believe possible.
See and seize opportunities for contributing to the greater good. Despite conventional thinking, great leaders have low ego needs precisely because of their solid confidence and self-worth. You don’t waste time and energy shining up your image. Your integrity is without question. You are willing to partner with others and you listen with an objective and compassionate for the greater good of the organization.
Or Do I…?
Discount others’ emotions and perspective. Failing leaders don’t pick up on other people’s signals. Or, if they do, they don’t care, demonstrating a fundamental lack of empathy and social awareness. You cannot be a good leader without empathy, period.
Miss key organizational clues, norms, decision networks and politics. ?These ‘leaders’ have very little emotional intelligence in terms of self-awareness and organizational awareness. You are missing clues, haven’t developed a wide network, and operate more like individual contributor than a leader.
Blame others for outcomes. Failing leaders don’t ask; they tell. You need to make someone wrong to be right. The difference between accountability and blame is the way the issue or problem is approached. You go for blame not solution.
Avoid dealing with and resolving conflicts. ?Failing leaders avoid dealing with conflicts and don’t provide constructive feedback to others. They duck key relationship issues. You often think, “If I ignore it, it will go away.”
Isolate myself and/or my team from others in the organization. You think you and/or your immediate team are better/smarter/righter than everyone else. These leaders are happiest in their ‘silo,’ rarely sharing resources or knowledge. You believe no one understands you or your work.
About the Author
Leadership authority Roxana (Roxi) Hewertson is a no-nonsense business veteran revered for her nuts-and-bolts, tell-it-like-it-is approach and practical, out-of-the-box insights that help both emerging and expert managers, executives and owners boost quantifiable job performance in various mission critical facets of business. Through AskRoxi.com, Roxi — “the Dear Abby of Leadership” — imparts invaluable free advice to managers and leaders at all levels, from the bullpen to the boardroom, to help them solve problems, become more effective and realize a higher measure of business and career success.
The StrategyDriven website was created to provide members of our community with insights to the actions that help create the shared vision, focus, and commitment needed to improve organizational alignment and accountability for the achievement of superior results. We look forward to answering your strategic planning and tactical business execution questions. Please email your questions to [email protected].
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A different kind of thanks. Yours.
/in Practices for Professionals/by Jeffrey GitomerAs the commercialism of Thanksgiving fades into the commercialism of Christmas (or whatever name you’re allowed to call it these days), several thoughts have occurred to me that will impact you as a person, you as a salesperson, and your business.
People try so hard to express good cheer in the holiday season they often miss the mark. “Don’t eat too much turkey!” or “Don’t drink too much eggnog!” is your way of saying, I have nothing new to say.
My bet is your ‘thank you’ is somewhat like your mission statement. It’s there, but it’s relatively meaningless, and no one can recite it. (Most employees, even executives, can’t recite their own mission statement, even under penalty of death.)
HARD QUESTIONS:
HERE’S AN IDEA: Why not start by thanking yourself? Thank yourself for your success, your good fortune, your health, your family, your library, your attitude, your fun times, your friends, and all the cool things you do that make you a happy person.
If you’re having trouble thanking yourself, that may be an indicator that things aren’t going as well as they could be. In that situation, any thanks you give to others will be perceived somewhere between ‘less than whole’ and ‘totally insincere.’
I don’t think you can become sincerely thankful to others until you have become fully thankful TO yourself and FOR yourself. And once you realize who YOU are, your message of thanks will become much more real, and passionate, to others.
NEWS REALITY: The good news is this is the holiday season. The bad news is it’s so full of retail shopping incentives, mobs of people, and ‘today only deals’ that the festivity of Thanksgiving is somewhat lost in the shuffle.
Black Friday and Cyber Monday – or wait, is it Cyber Tuesday, or Small Business Saturday, or Throwback Thursday? Whatever it is, it’s a strategy for advertising and promoting. And I’m okay with it, totally okay with the free enterprise system, I just think the hype of it has become more dominant than the giving of thanks and the meaning of the season.
Call me old-fashioned, or call me traditional, but I don’t think you can call me ‘wrong.’ I want our economy to be strong, but not at the expense of celebration, family time, and personal time to thank yourself for who you have become, and who you are becoming.
TRY THIS: Sit around your dinner table this Thanksgiving and have each person at the table make a statement as to what they are grateful for and who they are grateful to. Then have them say one thing about themselves that they are thankful for.
This simple action will create a sense of reality around your table that will be both revealing and educational. It also wipes away all the superficial undertones often associated with family holidays.
Why not ask people to recall their best Thanksgiving ever, or the person they miss the most, or the most important thing they’ve learned as a family member – and to be thankful for them or that.
BACK TO YOU: Sit down and make a list of your best qualities. Your personal assets, not your money or your property. The assets you possess that you believe have created the person you are. Your humor, your friendliness, your helpfulness, your approachability, your trustworthiness, your honesty, your ethics, and maybe even your morality. (Tough list, eh?)
And as you head deeper into this holiday season, perhaps next year’s intentions and focus (not goals and resolutions) will be more about building personal assets and building capabilities you can be thankful for and grateful for.
For those of you wondering, “where’s the sales tip?” Wake up, and smell the leftovers! I’m trying to help you sell you on yourself.
Once you make that sale, once you become the best you can be for yourself, then it’s easy to become the best you can be for others, and present yourself in a way that others will buy.
It’s the holidays baby, go out and thank yourself!
Reprinted with permission from Jeffrey H. Gitomer and Buy Gitomer.
About the Author
The Myth of Virality and What Marketers Can Learn From Justin Bieber
/in Innovation, Marketing & Sales/by StrategyDrivenThe current social strategy of many Marketing and Ad Agencies goes something like: “It doesn’t matter if the content is good, as long as we get a celebrity to tweet it, the thing will go viral!”
The prevailing consensus is that if a Kim Kardashian or Justin Bieber tweets your content out to their followers, the inherent size of their audience will cause a viral loop, exploding the campaign into the news feeds and inboxes of everyone and their grandmother.
This fallacy is perpetuated by the ‘hip,’ ‘disruptive’ agencies as they focus on buzz words like ‘share-ability’ and ‘social’ (read in a loathing, sarcastic voice while I make air quotes). If a campaign has a presence on every social network in the known universe, with custom widgets that all connect to each other, then its success is just a matter of turning a key and watching the crowd swarm. Right?
Wrong.
This strategy is not only absurdly lazy, but is ineffective, irresponsible, and even a little offensive to the intelligence of your desired audience. And yet, campaign after campaign saturates the Internet, towing along promises of fame, virality and ubiquity.
Any producer or agency that has had an Internet hit will tell you that content?s value, not “share-ability,” is the most important key to virality.
Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:
Subscribing to the Self Guided Program - It's Free!
About the Author
Christiano Covino is the CEO and Founder of Mischievious Studios, a digital entertainment studio based in Hollywood, California. Mischievious Studios works to blur the line between advertising and entertainment by creating entertaining online commercial content and engaging brand-sponsored entertainment (Branded WebSeries, Films, Sponsorships). Mischievious Studios also produces and programs content for MischiefTube their YouTube channel that receives over 30 million views annually. When not creating a splash online, Mischievious Studios develops and produces feature films. Passionate about innovation, Christiano helps Mischievious Studios stay on the cutting edge and develop new opportunities in the fast-changing entertainment landscape.
6 Silent Productivity and Profitability Pitfalls, part 4 of 7
/in Management & Leadership, Tactical Execution/by Chris MajerSilent Killer #3: Bureaucratic Styles
To most people, bureaucracy is a bad word, synonymous with ‘red tape’ and wasted time. Yet, despite the negative connotations, most companies still operate bureaucratically – insisting employees work inside of increasingly complex structures with processes and procedures designed to standardize or control everything. While this might have been the most efficient way to train assembly line workers during the Industrial Era, human capital is now the greatest resource for most companies. In other words, we’re paying people to think, to innovate, and to collaborate with others to produce the best possible results. You can’t achieve this level of performance if you attempt to dictate their every move with rigid policies and procedures.
The fall of many of our great companies – including GM, Chrysler, AT&T, DEC, and a host of others – is a testimony to bureaucratic blindness. Unfortunately, contemporary management theory offers no alternatives to this style of organizing work and designing organizational structures. Current hierarchically oriented systems – no matter how lean and ‘matrixed’ – are relics of the bygone era of WWII industrialization and manufacturing.
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Subscribing to the Self Guided Program - It's Free!
About the Author
StrategyDriven Editorial Perspective – Panic of 1907 vs Great Recession of 2008
/in StrategyDriven Editorial Perspective/by Cara Wick“An appreciation of the parallels between recent and historical events greatly influenced how I and many of my colleagues around the world responded to the crisis,” Mr. Bernanke said.
He went on to describe the similarities between the banking crisis of 1907 – the one that inspired the formation of the Federal Reserve – and the more recent 2008 financial crisis.
Both fit the archetype of a classic financial panic, Bernanke said. Both crises started in an economy in recession and both suffered from a sudden lack of liquidity.
In 1907, money was tight in part due to the rebuilding of San Francisco. After the Bank of England raised its discount rate, causing more gold to flow out of the US, New York was left with unusually low monetary reserves just as it entered the cash-intensive harvest season, explained Ellis Tallman and Jon Moen in a 1990 article about the Panic in the Atlanta Fed’s Economic Review.
In the more recent crises, Bernanke explained, liquidity started to dry up when housing prices declined, and subprime mortgage defaults rose in 2007. As the underwriting weaknesses of subprime portfolios became known, banks stopped lending to each other, paralyzing credit markets. By 2008, losses from these portfolios were causing banks to fail.
In both crises, a tinder-dry credit environment made them vulnerable to sparks. In 1907, the fire started when F. Augustus Heinze and C.F. Morse tried and failed to corner the stock of the United Copper Company. The investigation into the scam revealed an intricate web of corrupt bankers and brokers. (Heinze was president of Mercantile National Bank, and Morse served on seven New York City bank boards.) When the president of the second largest trust in the country was implicated in the copper cornering con, depositors started a run on Knickerbocker Trust.
Without a central bank, the availability of liquidity depended on the discretion of firms and private individuals, Bernanke explained. The Lehman Brothers moment of 1907 came when New York’s financiers, led by J.P. Morgan, were unable to value the trusts, and refused to ‘bail out’ Knickerbocker. (Unregulated and a relatively new innovation, trusts were the ‘toxic assets‘ of the 1907 crises. Trusts, however, were financed by consumer deposits, while the toxic asset of 2008 were securities contracts held by investment banks.)
Their refusal prevented other institutions from offering aid, and depositors started a massive run on banks and trusts, exacerbating the liquidity crises. (In 2008 a loss of confidence in the banking system did not turn into a consumer run on banks primarily because of FDIC deposit insurance.)
Morgan et al realized that a failure of the trusts could spread to the entire financial system, and they ultimately convinced John D. Rockefeller and others to pony up enough cash to stabilize the markets.
Similarly, American lawmakers eventually agreed that failure of the nation’s largest financial institutions was not an option, and passed the $700 billion Trouble Asset Relief Program in October 2008 (reduced to $475 billion by the Dodd-Frank Act). This program was designed “to strengthen market stability, improve the strength of financial institutions, and enhance market liquidity,” according to the Federal Reserve.
A major difference between the two crises, that I can see, is the popular perception of these liquidity liberators. In 1907, Senator Nelson Aldrich called the actions of JP Morgan and crew heroic. In his arguments for centralized banking reprinted in the New York Tribune, he warned that without it “men may not be found in another emergency with the patriotism, courage and capacity of those who in this crisis rendered such inconspicuous and invaluable service to the financial interests of this country.”
But in the 2008 crisis, when taxpayers rendered this very same “invaluable service,” people stormed the streets in protest. From the tea party conservative to the Wall Street occupier, hatred of the bailouts was met with bipartisan vehemence.
So why is it that when a handful of wealthy individuals restore liquidity to a broken system they are courageous patriots, but when it’s taxpayer’s, lawmakers are voted out of office? Perhaps the vehemence comes from how the money was used. In 1907, it was to save consumer’s retail deposits, in 2008 corporate wholesale funds.
As Bernanke explains in his speech, seeking to stem the panic in wholesale funding markets, in 2008 the Fed “extended its lender-of-last-resort facilities to support nonbank institutions such as investment banks.” This had little direct impact on consumers. As Fed governor Daniel Tarullo recently said “the savings of most U.S. households are generally not directly at risk in short-term wholesale funding arrangements.”
In 1907, on the other hand, ending bank runs meant “widows on the corner” could cash their checks, shop-owners could feed their families.
Another problem with the 2008 solution, from the popular perspective, was the moral hazard it created.
Senator Aldrich worried that courageous individuals might be hard to find in a financial emergency, and it appears he was right to worry. Senior executives in 2008 were not interested in rendering an inconspicuous service to the financial interests of the country. They didn’t even want to forego their bonuses. But in trying to account for the rarity of courage, lawmakers in 1913 may have created a system that prevents it from emerging.
A July 2013 Congressional research report articulates a challenge for today’s central bankers. “Although ‘too big to fail’ (TBTF) has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008… If a TBTF firm believes that the government will protect them from losses, they have less incentive to monitor the firm’s riskiness because they are shielded from the negative consequences of those risks.”
In 1907, the wealthy elite pooled their resources to prevent the failure of banks and trusts, saving millions in consumer deposits. In so doing they bore the brunt of the consequences of their risks, and Americans considered them heroes for it.
About the Author
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The Advisor’s Corner – Am I an At-Risk Leader?
/in The Advisor's Corner/by Roxi HewertsonIs there a way to tell if I’m an ‘at-risk’ leader?
StrategyDriven Response: (by Roxi Hewertson, StrategyDriven Principal Contributor)
Sure. You can ask yourself the questions below to get a good start and then you can and should regularly ask for direct or anonymous constructive feedback from your direct reports, peers, leader and others. You attitudes and behaviors are the biggest differentiators for leadership success. The four well researched core emotional intelligence metrics of: Self-Awareness, Self-Management, Social Awareness and Relationship Management are directly correlated with successful or failing leadership.
Here are some key attitudes and behaviors to pay attention to because just being proficient in your technical area of expertise ignores the fact that a leader’s success is highly dependent on others’ contributions.
Ask yourself, do I…?
Read/understand emotions and recognize the impact of them on self and others. By developing an accurate view of, and aptly managing, one’s own emotional responses to situations, the rest of you skills and talents are magnified and leveraged. You regularly seek feedback and acknowledge when your impact and intent are out of synch. ?
Know your strengths and limitations. The best leaders understand they can never know and do everything… and don’t pretend to. Instead, they recognize what they are good at and leverage those skills. You surround themselves with people who are smarter and more experienced in areas where you have gaps, and you listen to them.
Know and have a good sense of your own self-worth and capability. There is a big divide between confidence and arrogance. Confidence comes from a strong sense of self-worth and self-awareness. Arrogance comes from fear in many cases, and a sense of entitlement in others. You are confident based on an objective, not assumed point of view.
Think and act with optimism – see the ‘upside.’ There are two kinds of world view attitudes people project in the world—those who think and act through the lens of abundance, and those who think and act through a lens of scarcity. You go for solutions, new ideas, and silver linings, even in the worst of times. You may change course, but you never give up. You thoughtfully navigate your staffers to a better place – often to places they didn’t know or believe possible.
See and seize opportunities for contributing to the greater good. Despite conventional thinking, great leaders have low ego needs precisely because of their solid confidence and self-worth. You don’t waste time and energy shining up your image. Your integrity is without question. You are willing to partner with others and you listen with an objective and compassionate for the greater good of the organization.
Or Do I…?
Discount others’ emotions and perspective. Failing leaders don’t pick up on other people’s signals. Or, if they do, they don’t care, demonstrating a fundamental lack of empathy and social awareness. You cannot be a good leader without empathy, period.
Miss key organizational clues, norms, decision networks and politics. ?These ‘leaders’ have very little emotional intelligence in terms of self-awareness and organizational awareness. You are missing clues, haven’t developed a wide network, and operate more like individual contributor than a leader.
Blame others for outcomes. Failing leaders don’t ask; they tell. You need to make someone wrong to be right. The difference between accountability and blame is the way the issue or problem is approached. You go for blame not solution.
Avoid dealing with and resolving conflicts. ?Failing leaders avoid dealing with conflicts and don’t provide constructive feedback to others. They duck key relationship issues. You often think, “If I ignore it, it will go away.”
Isolate myself and/or my team from others in the organization. You think you and/or your immediate team are better/smarter/righter than everyone else. These leaders are happiest in their ‘silo,’ rarely sharing resources or knowledge. You believe no one understands you or your work.
About the Author
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