How much work does Financial Services still have to do?
Tuesday, 21 May, 2013 Leave a comment
It is a serious question! It genuinely bothers me that FS is rated as less trusted than banking [Edelman Trust Barometer] for the third straight year.
Equally I am incredulous that the UK insurance industry has the audacity to, still, be talking about increasing “professionalism” when the Aldermanbury Declaration is nothing more than yet another attempt at (well-practised) misdirection…or, if you like, ‘turd-polishing’.
Don’t try to see into the future using the past as your lens!
You are looking in the wrong direction. By all means know about and learn from the past but don’t use the wrong lens to try to look too far ahead. As a concerned mother of my parents’ generation would say “you’ll just strain your eyes”! Look within: not necessarily in some mystical or philosophical sense – although there are numerous historical references that still hold good – but in a practical manner as far as the structure, culture and operation of the business is concerned. And in a metaphorical sense in respect of your own biological system.
That’s right I AM suggesting that there are lessons to be learnt about what makes for a ‘healthy’ (or resilient) business from how a healthy body works! However, whilst an enthusiastic amateur could attempt to provide some insight re the former, I would really recommend that BOTH should be approached with the rigour of a scientist or Doctor seeking a cure for a deadly virus or treating a terminal illness.
Complex systems [whether business or biological] perform at their best when the operate interdependently but evidence would suggest that this is not fully understood by business managers, particularly within FS. But I believe that there is a great deal to be learnt from one of the best ‘non-business’, business, books I have ever read: ‘The Checklist Manifesto’ by Atul Gawande. It really should be compulsory reading, along with “7 Principles …” and “Who moved my cheese?”.
Some views of professionalism:
All learned occupations have a definition of professionalism, a code of conduct. It is where they spell out their ideals and duties. The codes are sometimes stated, sometimes just understood. But they all have at least three common elements.
First is an expectation of selflessness: that we accept responsibility for others – whether we are doctors, lawyers, teachers, public authorities, soldiers, or pilots – will place the needs and concerns of those who depend on us above our own.
Second is an expectation of skill: that we will aim for excellence in our knowledge and expertise.
Third is an expectation of trust-worthiness: that we will be responsible in our personal behaviour toward our charges.
Aviators, however, add a fourth expectation, discipline: discipline in following prudent procedure and in functioning with others. This is a concept almost entirely outside the lexicon of most professions, including my own. In medicine, we hold up “autonomy” as a professional lodestar, a principle that stands in direct opposition to discipline. But in a world in which success now requires large enterprises, teams of clinicians, high-risk technologies, and knowledge that outstrips any one person’s abilities, individual autonomy hardly seems the ideal we should aim for. It has the ring more of protectionism than of excellence. The closest our professional code comes to articulating the goal is an occasional plea for “collegiality”. What is needed, however, isn’t just that people working together be nice to each other. It is a discipline.
Discipline is hard – harder than trust-worthiness and skill and perhaps even harder than selflessness. We are by nature flawed and inconstant creatures. We can’t even keep from snacking between meals. We are not built for discipline. We are built for novelty and excitement, not for careful attention to detail. Discipline is something we have to work at.
That’s perhaps why aviation has required institutions to make discipline a norm…
You need to get over your obsession with, first (always) considering the demands of an unsustainable model that is based upon failed, known to be flawed or superseded theories and practises: that’s not being selfless.
When it comes to risk, how can there be a claim to ‘skill’ when such an intangible cannot be measured objectively? Certainly we can gain some insight from the past but, as a long and inglorious record of spectacular financial failures (let alone all the little one’s happening every day) serves to remind us of our unhealthy addiction to prediction…even when YOU KNOW that, if you had complete data (which we don’t), infinite budget, computing power and time (which we don’t) you still cannot make meaningful, reliable, forecasts about the future.
In the light of the above I suspect that there isn’t much need for me to even comment upon trust-worthiness or discipline!?
For those enlightened or concerned enough to have recognised these fundamental failings, ‘congratulations’ you are ahead of the curve and certainly a long way ahead of those whose strategy to deal with such fundamentals is to use a clever combination of smoke and mirrors. They will be the only ones getting ‘smoked’!