5 Things You Can Learn from a Run on a Bank

So March has brought us a run on a bank and the prospect of a sustained banking crisis just to add to the list of crises going on at the moment.?

Bank runs are fascinating in many ways but at the heart is confidence. That valuable commodity that we are all striving for or looking to protect in our own professional and personal lives.

So therefore, there must be some valuable lessons we can learn from such crises that we can apply on a day to day basis ourselves.

Let's explore in a little more detail.

So what is a run on a bank?

My first experience of what a bank run was probably the same as many young children.?That scene from Mary Poppins.?Jane and Michael Banks have just deposited their money in their father’s bank but after asking for it back and being refused all hell breaks loose.

Word quickly spreads that a customer has been refused their money and before you know it all the customers want their money back too.?Trust and confidence in the bank had gone.?People wanted out.

The “problem” with banking is not usually a problem at all.?Banks don't hold enough cash to suddenly give every customer their money back.?Mostly, this is because it’s tied up in long term investments that simply cant be sold to convert to cash in that short an order.

So the bank collapses under the strain of its customers requesting their deposits back.

The thing about trust and confidence is that its built slowly over time but it can take very little for that to evaporate:

“Trust arrives on foot and leaves on horseback”?has been attributed to Johan Thorbecke, the Dutch politician who was responsible for our first constitution in 1848.

So how is this relevant for us?

The same rules of trust building and the potential to lose that trust apply equally to our own personal lives and especially at work.

Quite often we see people build their careers over a long period of time, climbing the greasy pole but it is one mistake, one error of judgement on a cold wet Tuesday morning when you weren’t quite paying attention that can blow up.

Suddenly all that trust is gone.

So, what are the big elements that need to come together to minimise this risk for you.

This is where I ended up. I hope you find them useful.

1. Be as transparent as you can

As you build trust slowly over time one of the big elements that enables that is being transparent. Basically this is allowing people in to your world to see how you operate.

What you don’t want to be is a black box.?This may work in normal times to some extent but when stuff hits the fan your colleagues, customers and stakeholders will be in the dark as to what you do behind the scenes.

Suddenly all eyes will be on you. You may have people who have trusted you along the way but they will now be struggling to fight your corner.

2. Build sound processes

If you’re going to let people in and be more transparent you are going to need to have some sound processes to show them. That’s obvious.

But, most importantly if you have sound processes and something goes wrong you will be able to quickly identify the cause and correct it.

There is nothing worse that you boss calling you up as the crisis kicks off and you haven’t got a clue where to start with a solution!

Good processes will help you nip any crisis in the bud.

“It’s solved, no need to worry guys. It could have been bad but we’ve solved it and better still we know how to stop it happening again.”

3. Be honest about what happened

To some extent this is a deposit down on building your trust back again. If people know you to be honest in the good times, they are more likely to stick with you when things get sticky and trust you to solve it.

Trying a cover up is never never never a good approach!

You will be found out eventually or spend the next five years trying to keep a lid on the truth actually getting out.?Not worth it!

4. Building Relationships

Trust is ultimately built on relationships. So what you must do is build a good network of relationships in the good times that can then help you out if things get sticky.

Leading with empathy will help build a team that pulls together and gets behind you in those times.

The flip side is pretty bad.?Imagine the news has broken that something your team has produced has cost the company ￡3m. If you don’t have that team togetherness imagine how toxic that could become.

If you haven’t put in the time to build the team morale,?people will end up blaming each other rather than actually looking to solve the problem.

5. Be humble and strive to continually learn and improve

Being humble is about ensuring that you don’t become complacent. From day to day to day you can, if you’re not careful, become complacent about the processes that built the confidence in the first place.

Continually check that processes are being followed.

And then ensure that there is a culture of continuing to learn and evolve new ways of doing things that will keep things fresh.

In Conclusion

On reflection, a lot of this is similar to preparing for an exam. Once you get to the crisis there really isn’t much else you can do apart from execute based on your preparation.

Building trust and maintaining that through a crisis is similar.

Get the building blocks in place and you have the best possible chance to minimise the risk of a crisis and if something materialises you will be in a good place to deal with it.

I hope this was useful and a chance to reflect on ways we can all build a little more resilience to the way we work to ensure we build trust through the good times and maintain it when things go wrong.

Feel free to join the conversation in the comments below.

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