The Nepean Rep Report – Banking on It

Don’t call it a crisis. That’s the message coming out of the world’s largest financial institutions this week on the collapse of Silicon Valley Bank and the UBS-Credit Suisse ‘merger’/’acquisition’. With the media eager to stir up excitement, and further collapses more than likely, tensions are running high.

In such a climate, businesses all over are doing their best to convince the outside world that they won’t be next. SVB was a disasterclass in corporate communications, but also the canary in the caution coal mine: now we know just how flighty investors are.

Peaks and Valleys

Poor timing, sure, but surely not existentially so. Unless, that is, you follow up this technicality with no explanation or clarity, before going on to even ask your by now quite-not-calm investors to “calm down”.

Things at Silicon Valley Bank quickly unravelled as VCs and start-ups raced to withdraw their funds. A lot has been made of the role Whatsapp chats played in securing the safety of UK tech in the aftermath of SVB’s collapse, but it was this same high-speed, social media-happy network that facilitated such a rapid spiral to begin with.

This is not to shift the blame away from SVB. As well as a lack of cash, the bank suffered a lack of diversification. However, this also meant that it should have been acutely aware of the nature of its client base. The fact it failed to speak to them on their terms is inexcusable – see Elon Musk: tech bros prefer 280-characters to regulatory filings.

By failing to assuage the concerns of a particularly ‘nimble’ client-base, SVB discovered fast that they lacked the reputational stock to act without explanation. It has led some to describe it as one of the first social-media driven financial collapses.

Businesses need to understand the concerns and risk appetite of their stakeholders and, for the moments where things start to go wrong, how to talk to them. Poor communication alone did not sink SVB, but it ensured it stayed sunk.

More for Less

When Netlfix announced last month that it was stepping up its crackdown on account sharing, students, long-distance partners and exes the world over all let out a collective little shriek. With Netflix, password sharing has become the norm – more than a price-saving mechanism, it is according to Netlfix itself, an act of love.

Love, though, comes at a cost – roughly £2 a month judging by the ‘Extra Members’ scheme currently rolling out internationally. In its recent ‘Update on Sharing’, the company made it clear that you, the viewer are to blame – your ‘confusion’ has impacted its ability to invest in new shows.

It’s a bold move. As Ian Bogost at The Atlantic explains, Netflix are reneging on the ‘soft product’ they used to offer (the ability to share) alongside the ‘hard product’ (the ability to stream) – even scolding customers for making use of this feature to begin with. Crucially, it represents a failure to understand the extent of the bounds of the package they provide.

Compare and contrast with the actions of Graza – a squeezy-bottled olive oil start-up that, after a spike in demand, struggled to fulfil orders. It led CEO Andrew Benin to take matters into his own hands: emailing customers directly to tell them he was sorry, providing some explanation, and offering a discount. It was well received.

More than a simple corporate apology, this was an acknowledgement of the full scale of customers’ expectations – stretching beyond the product to include the packaging, delivery, and even company emails. In an increasingly competitive world, businesses of all kinds would be wise to take more time to consider their intangibles.

Evri-fying the Met?

Finally, following last week’s damning report into the culture of the Metropolitan Police, a number of solutions have been floated. One in particular caught our attention: a rename and a rebrand. We believe this would be a mistake.

It raises the question, what would a new name look like? Something friendlier, perhaps – streets patrolled by the People’s Community Police Force of London. PCPFL for short. Unfortunately, it’s clear that the issues run deeper than the breadth of the brand.

That isn’t to say that image is irrelevant. There is clearly a need to prevent an exodus of police officers from the groups that have been so poorly treated, as well as a parallel need to draw a diversity of people to a career in the police force to begin with. A name change will achieve neither.

What is needed is for the institution to acknowledge the full scale of its shortcomings and the need for change. Moments like this – in which the scale of public consciousness is so great – provide unique opportunities, even when so overwhelmingly negative.

The Met must harness this immense pessimism and begin to build from it something positive. It will take time and it will not be easy; action might achieve it – a rebranding certainly will not.

 

Luke Roberts