(Posted by David Schapiro)
It has been barely two months since Lehman Brothers went under and sometimes it feels like we are living in a different century. Like many of us, I have been through a number of crises of different types – financial, industrial, geopolitical – and they all have at least one thing in common: they go away in the end. The question is what happens in between…
As the CEO of a software company providing solutions to banks and insurers, the current financial crisis is of special interest to me, to put it lightly. As we offer products that help these companies improve their profitability, our business is going strong. But just like everybody else these days, we need to look into our crystal ball and plan for a potentially very different future.
Over the last few weeks (that seem like years) I have spoken with my customers – leading insurance and banking executives in the US and Europe – trying to build a model of what lies ahead for us in the future. It was intriguing to see how each individual had a unique insight about where we were heading. But uniqueness is the problem; I was looking for a common ground on which to build a model.
Based on these discussions as well as my own assessment, it is clear that this crisis is different from those we have experienced in the last 25 years (my business experience). None of us really know how it will work itself out, but we all know it will.
This lack of clarity, however, could not be my excuse for inaction. Being responsible for my company’s profits and the well-being of customers and employees – not to mention shareholder value – I needed to take action even in these uncertain circumstances. As the saying goes, the best action is the right decision, the second best is the wrong decision, and the worst is no decision…
This led to the (obvious?) conclusion that in times of crisis often “all” we have to do is get back to basics, or in this case:
- Make sure you have a way to take pulse of your customers and their needs
- Build a model of the future based on your understanding of your customers
- Take action to optimize the outcomes to customers and to your company based on your model
Nothing new, just a quick reminder.
Maybe this is also a message to banks and insurers: we can’t “simply” make money from money anymore, so let’s get back to business and focus on providing value to our customers at profitable prices. The business results will follow.
Tags: Banking, crisis, Financial Services, Insurance
