So it is now preferable to be seen as an estate agent(realtor) than a banker

While Barclays' (and other banks') rigging of reported interest rates to support their own positions is clearly wrong, today's "bleat" about mis-selling interest rate swaps seems to be in another place. It reminds me of a meeting at a cocktail party a few years ago .

My father and I met the father of a friend of my cousin - got all that?. He had been, indeed still was, a Lloyds "name". These were people who underwrote financially the workings of various Lloyds syndicates, often pledging hard assets such as their homes against the potential need to meet insurance claims. Of course no "name" expected to ever be called upon to sacrifice their home, but rather to just take an additional income from an asset that would not otherwise be earning. For many years and with few exceptions this was true, so it seemed like money for nothing, but as the saying goes if it seems too good to be true it most probably is.

At this time Lloyds had started making serious losses and was calling on "names" to make good on their promises and come up with their money. This man's house was now at risk and he was bleating about how unfair it all was. He was an intelligent and previously successful man who one would expect to make informed balanced decisions, but in this case he argued that he had been duped. While he admitted that he had received healthy and welcome income for years (for doing nothing!) he argued that he had never been told he could lose his house. Yet he accepted that if he bought a property, the solicitor's searches were not an guarantee against any future problem and that the final decision to buy or not rested with him.

Now at the risk of seeming insensitive, I have to admit that my father and I felt little or no pity for his situation and I suspect showed little sympathy. In this case he was one of many thousands whose greed, came back and  bit them. We still see him from time to time and while their circumstances have change they are neither destitute or suffering from this - they just lost some money.

So back to today; on the radio was a "small business" man jumping on this latest bandwagon and complaining that his bank had mis-sold him an interest rate swap. For anyone one who doesn't know an interest rate swap is broadly an agreement whereby, for a fee, one can swap the basis of interest on one's borrowings ie if you borrow at a variable rate you could swap that for a "fixed" rate that will remain constant for the duration of the swap. This sort of certainty suits some businesses better. The reverse is also true. One of the big reasons for buying a swap is to insure/protect against higher interest rates in the future. A deal that makes sense when funded at x%, may not make sense at x+2%, so fixing at x is attractive.

The business man in question had done just that around 2006 and of course interest rates had subsequently fallen. He DID benefit from a known fixed interest rate, but had he stayed with variable interest then he would have been paying less - isn't hindsight wonderful. He was complaining that he had been disadvantaged because HE decided to buy this protection and then the world then spun in a different direction.

The radio presenter then interviewed a journalist who has looked into this "scandal", listening to sales calls and talking with clients and sales people. The journalist pointed out that the sales patter had concentrated on the positives and not spent as much time on the negatives ie in this case what would happen if interest rates fell. Now I realise that there needs to be openness and honesty in selling difficult financial products, but, quite frankly, interest rate swaps are not that complicated, so if someone can run a business this should be within their comprehension. They probably make much harder decisions.

It strikes me that a double-glazing salesman will always emphasise the positive, and not what might happen should we face hail storms of epic proportions. Similarly a car salesman will talk about the advantges of diesel over petrol as they are and not counsel on the impact on cabon-fuels prices of the discovery of a major new bio-fuel process.

Why, in retorspect, are we now demanding somuch more of financial salesmen? To me it smacks of a growing witchhunt.

I think it was topped off by some vox pop interviews in which a banker said he never admitted to being a banker but instead told people he was an estate agent. Now I never thought I would see a day when that was the preferred ranking of professions.

I wonder what tomorrow will bring?

In the light of the Barclays debacle, what if you could assess an individual's capacity for good judgement??

So we have another round in the horror stories relating to bankers and the catalogue of appalling behaviours and the hunters are out again raking up fear and anger. In this case they have manipulated (to their advantage) interest rates used to determine many other aspects of the world of money. It is no real surprise that this has happened as most bankers are undoubtedly smarter than average and if they can see ways to manipulate their environment in order to maximise their profits and thus their bonus' they will - it has always been so. They are not referred to as "money makers" for nothing and it is clear that many see themselves as superior or better than the rest of society.

No matter what one likes to say, the financial world is driven by greed; working so close to money, especially in quantities with so many zeroes, will undoubtedly infect the susceptible.

The check and balance, at least in most quarters, has always been the judgement the key players have displayed, judgement about what is right and wrong, based on values and influenced by context. On the whole this has worked, but these days the stakes are so high, the complexity and scale of these enterprises so great and, to be frank, the regulators are not as smart and always playing catch up. While there is a real question relating to whether the banks are too big for managers to manage, more fundamentally, and no one can guarantee how anyone will act in a particular situation, without the basic capacity for good judgement, decision making can only and will be poor.

So what value would you as a stakeholder place on being able to assess a person's capacity for good judgement, their propensity to follow rules, risk appetite and many other useful indictaors? Well one does exist and I have seen it work in a number of circumstances, so why has it struggled to gain traction within financial services.

Well one reason is is that the "HR" specialists are emotionally locked into tools that arguably identify a peron's "type" and have been heavily resistant to looking at anything perceived as "new". Interestingly this group seems to be very risk averse, preferring to do/use what everyone else does!! I have been involved in a number of meetings where HR has just sucked its teeth and effectively closed any further discussion on a tool that is available, being used in other sectors and would help.

There is an assessment that will help. It is not new, but based on over half a century of reserach and preparation. It is contextual in that it can show the differences in one's capacity at different times. For example the way one views the world will differ if one is nursing a loved one, getting divorced or just witnessed the birth of child.This tool can be used to screen groups, assess individuals and support coaching and development.

If you are interested then please get in contact and I will put you in contact with people who can help.

Are Contractors Now Adding More Value?

I was in discussion the other evening with the director of a recruitment firm that supplies large numbers of both permanent and contractor resources to financial services companies in London. In the midst of our conversation he stated that he thought contractors were adding more value to employers these days and asked my opinion.

His comment was not about depressed rates making the financial assessment more attractive, but more about the "content" they bring to the table - how their knowledge is becoming more important in the design and delivery of projects and programmes.

I have to say that I agree in part and disagree in another part. First the part I agree with and that is that contractors are becoming more important, but this is more a reflection on changes in the body of permanent employees that has reduced the reservoir (both depth and breadth) of subject matter expertise available from within the company. For a whole bundle of reasons this reservoir is dramatically smaller than it was even 10 years ago.

In terms of capacity, the drive to eliminate unnecessary(?) cost from businesses has lead to the release of personnel/capacity that could and in the past would have been applied to changes. Of those that are still employed, their tenure (and thus experience and knowledge) is much reduced so even when they are assigned to a change they can only "give" less. This reduction of tenure has also made employment much more of a transaction than a relationship, in many instances damaging the alignment and commitment of employees and thus impacting detrimentally what is often referred to as their discretionary effort.

The same drive for financial improvement(?) also drives denial in relation to the level of resource need to drive change. Every company I have worked for has played up to the delusion that "next year" there will be less change (and thus need less resource) than "this year". As a result none are prepared to really build the sort of permanent change compliment that would allow the establishment and sustanance of good content knowledge, instead arguing that they will release the contractors at the end and not replace them. While that may happen on discrete projects, it rarely happens in the round when looking across a broader change portfolio.

The last piece has been the dramatic reduction in training effort, both in terms of hard currency spend and time devoted. In my last leadership role our training budget was £70 per head per year - what can you really provide for that? - and utilisation rates were expected to be 80%+ - which when you consider vacation time, an increasing administration load and the normal time required for team meetings and the running of the business, leaves little time to spend on "training". This is true in both that operational side of the business and in the change teams and leads to very fragmented learning - people learn/are taught just what they need to, often by word of mouth rather than structured training.

As a result one can readily see how and why the reliance on contractors has grown. I would argue that they could always bring this knowledge by dint of their experience and need to stay marketable as an individual, but in the past their knowledge was primarily supplemental rather than critical.

It is also true that the economic situation has released more "permanent" people into the market, many who in the depressed markets are now having to look at "contracting". As a result many so-called contractors are not really contractors at heart.

I can look around and still see many "true" contractors, ones who value not getting caught up in the machinations involved with being a permanent employee, and/or value at higher degree of personal flexibility. They undoubtedly add value to an organisaton, but really do have a different style and level of personal engagement with their workplace. This has not really changed in my opinion.

This leads to where I disagree the director. I think that true contractors are still contractors and perform a valuable role for firms. The difference is that unconsciously we are asking more of them and thus seeing a different contribution I also think that the director is seeing a mixed population that has a higher proportion of involuntary contarctors ie those who are really and preferrable permanent in their mindset, but are currently forced to trade in the contractor space. This distorts his assessment of contractor value.

I wonder what others think?

Leadership

We did move onto the question of should we expect contractors to fill "leadership" roles and indeed can they really do so when their engagement and alignment is different to that of a permanent employee.....but that is something for a later post.

Some unusual clouds

I am not usually someone who watches the sky and spots clouds, but this formation caught my eye and I managed to snap it quickly on my phone. I don't recall ever seeing such clouds before.

It seems that thes are called mammatus as in "breast" clouds. It seems that they are often associated with storms forming immediately afterwards for a short time. We certainly had had a heavy rainstorm just before I saw these and they did not persist for long.

Anyways, I did say this blog was for things that caught my attention so this definitely qualifies.

The most I can do for my friend is simply be his friend.

The quote in the title is from Henry David Thoreau. It was on a key ring given to me almost 50 years ago by an ex-girlfriend. It was a time when all those schmulzy Susan Polis Shutz cards were around and this was paper pasted onto board and when the paper came loose I kept it, but seem to have lost it now. [PS Today I found the paper in a photo album.....obviously put there for safe keeping. Also found a dried leaf clover given to me by a different ex-girlfriend that I feared I had lost.]
The reason for this intro was that I had reason to go into my case of old papers the other day. This is an old work brief case. I have not been overly sentimental about keeping things so there is a limit to what will fit in there. The trigger was a conversation with my mother who said she had met the mother of a girl I had known in school, but could not remember her name - neither could I so I went to look for some old school papers.
The reason for this post was to capture the obvious truth that it is worth keeping some things in order that they can trigger memories you might otherwise have lost. It was quite nostalgic to go looking through the various materials in that case.
There were scouting badges and rock concert programmes along with my invitation to take part in an England rugby trial and the telegram (yes a real telegram) that offered advised me of my place at university. There were alsoa couple of letter from tutors and piece of the rowing eight that we crashed.
On a more romatic side there was my first Valentine (no, I still don't know who it came from thought I did have my ideas) and other letters and cards from girlfriends, girl friends and my future (and still) wife. I have to admit though that there are a couple of names that I really struggle to recall; a Sara and a Mary. There are tow cards from Sara so that obviously means more.
There were also a set of lyrics for popular(?) rugby songs, evidence that I tried to write poetry even back in school (I had truly forgotten that) and instructions about how to find the mid point of a line using only a pair of compasses!!
Regarding school I have a number of copies of the old school magazine, and various prize day programmes. It was this latter set that I went to in order to scour for possible candidates for this un-remembered girl. That said I found myself looking through all the old magazines too.
Last, but not least was a small picture of my maternal grandparents.

I think it was good for the soul to do that and in order to do so one needs the physical triggers. If you are thinking of turning out your old papers and memoriesy, think again and see if you don't have a small corner somewhere that they can be kept.

I solve problems!!!

I have spoken before about my rule of three ie if something crosses my path three times then it is significant and I need to do something about it, well it has happened again.

It started with a Linkedin discussion thread that asked if the reader could describe what (in the field of change) they do in three words? Well, I have long admired those that can convey what they do very succinctly whether it be at parties, over a meal or even at interview. It has been something I have struggled with at times and rarely been happy with my delivery. So that got me thinking and my answer was

"Deliver lasting change"

It was interesting that of the many responses, most were about how they do things rather that what they achieve. Examples included "Communicate, communicate, communicate", "Prepare, seed, water" abd "Diagnose actual problem".

This still felt a little unsatisfactory in terms of selling myself and my skills professionally so for my personal webiste I expanded to four words to make it "deliver lasting business change".

I have been thinking subsequently and the three words describing what I do is "I solve problems". This feels very comfortable as it is what I was trained to do, what I enjoy doing and indeed what I do do every day. I may test it when I meet new people and see if it is more powerful than "deliver lasting change".




So the second leg was a Forbes.com article entitled "How to Make the Best Business Impression in 8 seconds or Less". This argued that the average adult attention span is eight seconds and that in reality, most people will stop listening after five seconds. This is still a very succinct soundbite and needs a lot of practice. I am not sure I have nailed this one yet but the article does give some guides on how to craft the message. It is the sort of thing one would use at a first meeting, in an elevator or indeed as a crisp reponse to an interview.

While I think this could still do with some sharpening, my working

I help financial service organisations implement business change. I do this by creating confidence that the right things are being done in the right way to deliver the outcomes they desire.

 Now the third piece that I cam across was in an ebook on change from John Passy entitled "Transforming Dinosaurs Into Vampires". As I flicked through to the back (yes, a paper based habit that persists!) I came across an example of how to the newspaper industry is changing. In it he reports that the average web-reader (as opposed to paper-reader), in most cases, reads the first seven lines before jumping to another article. He acknowledges it is not the case that only the first seven lines are ever read, but it does give a sense of important those first few lines are to people who are short of time or need convincing that they want/need to read further.

This is of particular importance when it comes to promoting yourself in a CV or on a blog or website. Of course seven lines is not quite as well defined as "three words" or "eight (or five) seconds", but is still a good guide.

So circling back, did I get you as the reader interested in the title? Did the first seven lines persaude you to read further? Would my eight second spiel be enough for us to talk further?