Tag Archive | business



There is no doubt that 2012 was a difficult year for financial institutions and banks. Again financial institutions and banks found themselves too often in the news for the wrong reasons. This damaged trust in banks, which was already at low ebb.

The behaviours which made those headlines in 2012 underlined how banking as a whole had lost its way, and had lost touch with the values on which banking reputation and trust were built.

Over a period of almost 20 years, banking has become too aggressive, too focused on the short-term, too disconnected from the needs of their customers and clients, and wider society.

There was a tendency to pursue short-term profits at the expense of the values and reputation of the organisation; a tendency to choose profit over values-driven business.  In doing so banks damaged their ability to make long-term sustainable returns.

Values-driven business

But banking will only be valuable business if it is values-driven business; banking will be valuable business if banks operate to the highest standards of behaviour with integrity.

There is no choice between profits and values-driven business in banking business and to place them as opposites fundamentally misunderstands the problems facing the banking sector.

Banking business is built on having a firm commitment to strong values. This is not something banks should do for public relations or political benefit. It should not be a window dressing gimmick. It should be how banks should be run to become valuable and sustainable institutions.

Banking Reforms

The time for reform is now. Banks should reform and the reform should be values-based reform. Banks should look afresh at what they want to achieve and how they want to do it. Banks should reflect on their history which shows how banks and what banks can achieve when grounded in strong values.  And by remaining grounded and committed in strong values, then banks can be institutions that does the right thing for colleagues, customers and clients, and indeed all of their stakeholders.

Agreeing and having a strong commitment to strong values is one part of the equation, the easy part of any banking reform. The difficult challenge is to ensuring everyone in the organisation live by them all of the time.

Aside making sure every staff is aware of the values, banks should make sure the values play apart in how bank measure individual and business performance. Performance assessment must be based on the ‘WHAT’ and ‘HOW’. Bank must ensure they reward people for making the bank money in a way consistent with their values. Rewards should be link to the upholding of the values.


Banks have been around for centuries. Their success and longevity has been based on integrity and its attention to customers and clients. When Banks have forgotten that, they have paid the price. If Banks continue to combine the right values with the right strategy, banks will build more successful business in the years and decades that follow.

No bank can continue to be successful – nor do they deserve to be successful – unless they live by their values. The business of banking is values-driven business.

Global Financial Crisis: Five years on and no end in sight


The global financial crisis, triggered in 2007 by the United States housing bubble bursting, has recently passed the five year mark with no end in sight. The crisis, described by many commentators as the worst since the Great Depression of the 1930s, is unlikely to pass without causing more pain for ordinary middle class people and those in the lower economic strata.

The Start of the Crisis

The start of the crisis can be dated back to August 2007 when the French global banking group BNP Paribas terminated withdrawals from three hedge funds citing “a complete evaporation of liquidity”.

The bursting of the US housing bubble followed and caused the values of securities tied to the US to nosedive. In the modern “global village” it rapidly hit financial institutions worldwide.

The crisis exposed the unsustainable situation created by US government policies that encouraged home ownership with loans for sub-prime borrowers, the overvaluation of bundled sub-prime mortgages based on the assumption of a perpetual increase in the value of real estate, and questionable trading practices.

The situation was worsened by over-complicated mathematical formulas used by financial markets and the lack of adequate capital holdings by banks and insurance companies to cover their exposures.

The uncertainty about the solvency of banks and other financial institutions led to the tightening of credit, international trade declined and economies across the globe shrank.

Government & central bank Action

Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and the bail-out of banks and other financial institutions. The net effect of this was the shifting of debt burdens onto the shoulders of taxpayers worldwide, especially in the developed world.

Over time, the eye of the storm morphed into a sovereign debt crisis, particularly in Europe. Fears for sovereign debt defaults by several European countries, and eventually even by the US, remain real.

While central banks are flooding cash-strapped industrialised nations with money it helps governments to reduce their debt load. At the same time however it also erodes the value of people’s income and savings. Some commentators refer to this process as a massive upward redistribution of wealth. And, especially at the bottom of the economic pyramid ordinary people are also at the receiving end of austerity measures taken by governments aimed at softening their deficits.

What governments are effectively doing to lower their debt levels in real terms is what has been done since the time of Cleopatra in Egypt when she replaced gold coins with much cheaper copper coins: they are devaluing their currencies.

Inflation Dangers

In the process huge inflation dangers are waiting in the wings. A poll conducted in September by the German companies Faktenkontor and Toluna found that one in four Germans is already trying to protect his or her savings from the threat of inflation by investing in material assets.

Governments and central banks are constantly buying time by fighting the debt crisis with monetary injections of previously unheard of proportions and the side effect is a slow but dangerous devaluation of money.

While official inflation rates are still moderate (1.7% in the U’S and 2.6% in the euro zone) they are based on consumer price indexes and do not reflect what is happening with major asset purchases such as real estate. This “unofficial” category of inflation in asset values is already taking place in the financial markets and new price bubbles are being fed with cheap money from central banks, as well as by investors and savers fleeing into what they regard as safe material assets.

It is also a reality that in the present extremely low interest environment, even the lowest inflation eats away at people’s reserves and savings.

In the US the Federal Reserve prime rate has been at zero since the end of 2008, and has just been extended at this non rate by chairman Ben Bernanke.

In the meantime US government debt has exceeded the $16 trillion threshold with inflation about the only viable option to reduce it. The alternative of a massive saving through austerity measures and higher unemployment rates is politically most unattractive.

In the wake of the strong global integration of economies in the 1990s the competition for export markets has increased currency devaluation. One of the symptoms of this is the increasing talk of a currency war between the US and China and to a lesser extent Europe. It also creates a gap between the financial economy and the real economy.

Payday will come

For the investor and especially middle-class people attempting to provide for retirement and create wealth for future generations, the biggest challenge has become not return on investment but rather retention of value.

How and when the end of the present financial debt crisis will come about is almost impossible to predict. What is certain is that the settlement of the debt burden cannot be avoided for ever.

One way or another payday will come and it looks to be inevitable that a substantial part of that tab will be picked up by the middle class.

by Piet Coetzer

Communication Skills vrs Technology

Business leaders are typically great communicators and this is the number one quality they looked for in future leaders. They also recognise and value this precious skill in others.

A great communicator is someone who is comfortable talking to anyone, anywhere in the world. Someone who could make things happen across international borders and cultural barriers, someone who could walk into a room anywhere in the world and fix a problem, delight a customer, secure a partner, or close a deal.

Lack of communication skills or Inability to interact, articulate or persuade can have immediate and potentially consequences for any business. The combined effect over time can be an eventual loss of competitiveness and a negative effecton the bottom line. At the personal and career levels, smart and talented people lacking these skills will find the odds stacked against them. But when outstanding communication skills are married with brains and talent, the sky’s the limit for career oriented persons.

What this means is communication is the single most important business asset, absolutely essential to any company that hopes to grow and prosper.

But technology is rapidly dumbing us down. It’s quietly alienating us from one another and robbing us of our precious and unique gifts of face-to-face direct human interaction. Technology is robbing us of this precious skill of communication. Nowadays we email, we text, we tweet, we socialise online.

Many of us don’t read as much, nor socialize the way we used to, nor value speaking skills the way we once did.  All these are leading to the gradual loss of the art of conversation we once valued and cherished, and the steady erosion of our capacity to interact effectively at a very personal level. The more we rely on technology to do our talking for us, the more we can expect to see the costof that reliance in our business results and performance.

Excellence in business communications should be as routine as excellence in business performance. In successful corporations, communication is performance.

If you cannot communicate, then you cannot sell a product or service, command a room, run a meeting effectively, persuade investors, inspire employees, align team members, or compel key audiences. If you cannot communicate then it means that if you have a good idea, you might not be able to sell it. If you have a vision, no one will hear it. If you have a strategy, no one will follow it.

Unlike business people, politicians have long understood the value of leadership communications. In fact, word power is their entire stock and trade. Millions of people vote politicians who are able to  articulate their vision and  clearly define problems and solutions, simplify the complex, rationally debate any issue, This is not the kind of thing you can do with just text messages, e-mails, and tweets

Maybe business people should borrow from the experience of politicians. The question here is, can you walk into a room anywhere, anytime, and make things happen? Wonderful things unfold when people talk face-to-face in private offices, conference rooms, boardrooms, corridors, auditoriums.

It is time to capitalize on the huge added value that leadership communications brings to business proposition or transaction. We should not allow technology – the promise of this age, to rob us of this key skill.