I am constantly confronted with old mindsets about the world of work. No experience of this is more apparent, nor more intrinsically flawed, than banking in South Africa. I am grateful to fellow entrepreneur and IT guru, Darryl Baumann, for his thoughts on this over a fine breakfast this morning (thank-you, Lemon Rose Farm).
It used to be a fair assessment that an employed person had a lower risk of default, and thus bad debt. A self-employed person could lose his or her business overnight, it was thought. Whilst statistics were perhaps on their side in the past, banks have not changed their mindset to reflect the 21st Century, wherein many sustainable and competitive businesses are “entrepreneurially” initiated.
I work mostly with large multi-national organisations and can attest to the fact that they face uncertainty as much as the average SOHO business owner. In fact, Bob Johansen – from the Institute for the Future – calls this the VUCA World: Volatile, Uncertain, Complex and Ambiguous. In this environment, nothing is stable. Blackberry’s competitive advantage has been eroded to the point of insignificance. Banks in Europe and The U.S. have closed their doors. The rate-fixing scandal of previously-reputable Barclays will cost $1.65 Billion more…which comes at the loss of…share price, their African market and thus jobs.
And in this environment (can anyone say Kodak? Nortel? Woolworths UK? Nationwide? 1Time?), someone with one month’s worth of paycheck from a known entity is still seen as a more secure risk than a business owner with 5 years’ worth of trading experience, loyal clients and a sustainable product offering. Please help me understand the logic?
It is time for a new mindset, one that explores people and businesses as individuals, looking at the big picture of their track record and their earning potential. That does, of course, mean that real people -with knowledge, not just a microphone – will need to take a few minutes to engage with a customer. And listen, not recite what is on their screen, or programmed in an algorithm meant for 1995.
Those who adapt and master "New Millennium" leadership will find that their customers feel valued, inspired and remain relatively loyal, communicating positively on social media about them. This means they will have the opportunity to connect with their community, gain feedback in real-time and apologise if they err.
Those that continue on their present path will steadily lose ground to technology, which is already making banks redundant. The technology that empowers SME's and Spaza shops will change what happens in large corporate environments. Physical buildings will hardly be necessary, except as warehouses and customer interaction centres. A central credit bureau serves all of the banks, so why can’t it be bank-independent in future, too? The writing is on the wall, for those who care to read it, instead of last year’s annual report.