LIBOR scandal highlights the perils of living in the bubble

By guest blogger Kaitlin Walsh


I don't know whether, how or by whom Barclay's was advised in what's now being billed as 'banking's tobacco moment'. But I do know that it appears that lack of objective 'outsider' advice over how to handle the LIBOR scandal has both compounded negative fallout and provided a(nother) scary confirmation of how far off course an entire industry can steer when it loses sight of accepted moral touchstones.

As the tentacles of the LIBOR scandal multiply and creep ever outward to implicate a growing number of major financial institutions worldwide, there's a lot to be learned from some media coverage of the event.

In some reports, the focus is not so much on the innate perfidy of the offence itself, but Barclay's (and the regulator's) failure to anticipate the outraged public response to exposure of its illegal activities.

In these stories, the attention has been very much on the bank's responses to being sprung, rather than the moral dimensions and practical fallout of the rate fixing itself. The behaviour of the bank has been described in terms such as 'mis-steps' and 'being caught flat-footed', because neither it nor the UK regulator, the Financial Standards Authority (FSA), were 'banking on the furore' that would ensue. Both were guilty of 'badly underestimating public opinion'.

Other reports chew closer to the moral bone. 'The Economist's' headline from 7 July, 'The rotten heart of finance', pretty much says it all. In this piece, the sheer 'everydayness' of the recalcitrant bankers' behaviour is highlighted. The fact that those involved appeared so cavalier about their own wrongdoing is chillingly reminiscent of analyses of some of the worst of human behaviour, what we might term 'the banality of evil', the phrase coined so famously by Hannah Arendt in her observations of Adolf Eichmann's trial.

'The Economist' piece goes on to look at the cultural and other issues which contribute to illegal and unethical behaviour becoming, by all accounts, normalised. Small wonder then that transgressors lost sight of the way their actions would be construed by 'outsiders'.

No matter which slant on the events speaks more loudly to you, a common thread emerges. And that is that, living in their 'bubble', the key players became cut off from basic ethical, legal and moral touchstones. They were either wrapped up so completely in a toxic culture that they cared not about their own wrongdoing, or miscalculated so completely the magnitude of their crimes that they were caught unawares by the outcry when they were exposed.

Whether their moral compasses became warped by self-interest, desensitized by over-exposure, corrupted by arrogance, distorted by a misguided sense of 'right-doing', thrown awry by peer pressure - or all of the above, is a question for others to answer (or at any rate, for a different blog).

But one thing that was clearly lacking here and could have made a real difference - if not to the behaviour itself, then to the subsequent 'mis-steps' in owning up to it - was objective outside advice. Akin to a giant magnetic pole, the right advice can unfailingly indicate where the 'due north' of acceptable legal (at the very least), ethical and moral conduct lies. This in turn can better prepare one for owning up and ultimately, one hopes, making amends.

Because the fact is, even for those with the best of intentions there's real danger in making judgements using only the sounding board of one's own peers. Consulting only those whose interests are closely aligned with your own is a great way to get the answers you want. It's also a great way of cementing yourself into a giant, artificial bubble which, when it bursts - as bubbles do - is likely to create one giant hell of a mess.

The morals of the story are many. But I am highlighting just one. If in doubt, don't close ranks. Instead, throw open the doors to objective counsel and trusted 'outsiders' who can provide fresh perspectives. At best, they can help you stay a 'due north' course. Should the worst happen, they can help you minimise the mess.

Sniff the 'Rotten heart of finance' at http://www.economist.com/node/21558281

Mis-step with Barclays and the FSA at
http://online.wsj.com/article/SB10001424052702303612804577528852646272314.html?mod=wsj_share_tweet'

Become an instant LIBOR savant at www.accountingdegree.net/numbers/libor.php


Kaitlin Walsh is BlueChip Communication's Director of Client Strategy & Content

Looking at social media? Then start with an internal media conference

By guest blogger Michelle Ryan

Recently my colleague, Carden Calder - BlueChip Communication founder and social media aficionado - posted a blog about social learning. It looked at the benefits of sharing knowledge and experiences in and out of social media, with a special focus on financial services firms.

Rather than give you the complete low-down on the post, you can read it for yourself here, but I did want to expand on one of the points it contained.

Top ways to kick off social learning...

In her blog, Carden listed three key suggestions to help financial service firms, that want to give social learning a try, get started. 

One of those suggestions was to hold an internal social media conference.

What is that, you ask? Allow me to explain ... in 140 characters or less. No, kidding, I will need a few more words than that, but here is a brief outline.

Get started on social learning by running your own internal social media conference...

An internal social media conference involves presenting relevant information about social media, stimulating ideas and inspiration among staff members. It's a safe, fun, social media training ground, that ideally should work as a springboard for lively discussion. It's also a great opportunity for staff to get their hands dirty and have a 'play' with various social media platforms before they launch into the 'real' virtual world on your company's behalf.

Five steps to hosting an internal social media conference

1. Decide on the topic and develop some guidelines for content
• Be very specific about topics you want covered. Choose, say, a social media channel, concept or service.
• Choose a topic that is directly relevant to your staff and your social media goals - if you're not going to use Facebook, don't go there, but if you are launching a Twitter handle at a conference, you need to get your staff across the who, what, when, why and how of this before you launch it.
• Invite staff to send questions ahead of time so speakers can tailor their presentations or run Q&A sessions if appropriate.
2. Find an external speaker and brief them
• A quick search online for social media buzz words will show you a number of people who purport to be, or in fact are, experts in social and digital communication. Ask around, check references and other bona fides to be sure you get the real deal.
• Use your conference topics as starting points in your search and look for an external speaker with direct capabilities or experience in this area.
3. Get staff involved and have them present
• Yes, engage the speaker, but don't overlook the capabilities of your own staff.
• Do you have someone already on staff who can share their knowledge and experience? If so, do what you can to encourage peer-to-peer, or social learning - for example, appoint that person as a champion or ambassador of your social media campaign. This is a great way to fast track results and keep the all-important conversation alive in the office once the internal conference has finished!
4. Review
• Ask your staff and any external speakers to rate the conference so you can improve or build on its lessons. A quick Survey Monkey questionnaire (incentivised if you are serious about getting a response) will allow you to get this information quickly and easily.
5. And rebook
• Once you have the feedback - use it! Book in another session (perhaps aim for one a quarter) to discuss a different topic and to hear from different 'experts'. With social and digital media changing constantly, you'd be unwise to believe you have heard or learnt it all before.

Michelle Ryan is an Account Manager for BlueChip Communication

Social: saving lives by building a better GP

And how far behind is financial services?

If anyone you know is still wondering about whether social media has commercial worth, here's one to shout from the rooftops. 

News from a medical study today is a huge signal to the medical establishment about social tools for Australian doctors and patients. And a harbinger of what's to come for our banks, insurers, wealth advisers, financial planners, credit card companies and financial services providers as they serve us on our own personal journeys towards better financial futures.

Listening to ABC Radio 702's breakfast show this morning I heard something everyone should know. 

The Medical Journal of Australia is going to develop a collaborative social tool (a wiki) to help General Practitioners (GPs) deliver the best possible care to patients. At least that's the summary version I've gleaned from news media and the MJA website. 

Why? 

Almost half of Australian patients don't get "recommended care"

Because a recent study suggests adult Australians are receiving "appropriate" (read 'good enough') GP care at 57%. That leaves a whopping 43% of GP care in the sample group of more than 1,000 who did not receive "appropriate care".

The potential extrapolation to the Australian population (think in particular regional or social-economically under-served communities) is frightening.

Now while there will be headlines in those stats, here are some realities:

- GPs are among some of the most overburdened in our health care system

- They have limited time and resources to diagnose (and often treat) thousands of diverse conditions

- No medical  professional is omnipotent...and we're unreasonable if we expect them to be...which we often do!

So how does a busy GP ensure (ie be certain or near enough) they're doing better than getting it right half  the time? Use a wiki that, overseen by experts, provides a "dynamic, centralised and inclusive platform — openly available to all to contribute to and use — that will help empower clinicians to deliver the best care."

It's a huge leap for practitioners, who for sometime have been complaining about "Google Doctor", but have, on occasion, been well behind the eight ball when faced with an intelligent, curious and well researched patient.

Personally I use healthy caution when it comes to Google Doctor. I have the words of my late grandfather, a specialist and pioneer in his field, that a little bit of knowledge is indeed a very dangerous thing. 

Personally? Google+ motivated parent > GP

But, and it's a huge but, I have used Google twice to identify and correctly diagnose rare conditions affecting my children.

After failing to arrive at answers to serious questions in several consults, I was forced to look for answers myself in the only medical database I have access to (imperfect as it is) - Google. 

After that, and with the germ of an idea I went to yet more doctors to be told (on occasion) I was wrong. And then, upon persisting, finding advice from more specialised doctors in particular fields, that I was right.

OK so that's probably an unusual example. Still, it suggests a worried parent with Google, some basic biological knowledge and the ability to use Boolean search terms beats 15-30 minutes with a busy GP or paediatrician any day. 

And that's just wrong. 

Simple access to information is putting medical professionals, and their patients (most of us!) at a huge disadvantage.

Why? Because many doctors, while great professionals with specialist diagnostician skills, don't have the time or tools (here's where the wiki comes in) to get the right answer. In some cases, they may also lack the humility or intellectual curiosity to get the right answer, but that's another, and thankfully, less common, story.

The God-complex revived: in a wiki

This signals a very real application of social tools to one of the most important ares of our lives - our health.

Here are a few key lines from the excerpt in today's MJA abstract covering the study, which was designed to measure how well we deliver “appropriate care” to patients in Australia (doi: 10.5694/mja12.10510). 

"The researchers were aiming to reproduce a landmark 2003 study that found that only 55% of patients in the United States received “recommended care”...findings are essentially the same — that almost half of patients are not receiving appropriate care....

"...challenge that practitioners regularly face — how to access reliable, updated and credible information about appropriate care, and how to make clinical decisions in the absence of this information.

"...Runciman et al suggest a way to achieve national agreement on clinical standards...we (the MJA) are already working with the Cancer Council Australia to deliver a “wiki” guideline tool on our website...a dynamic, centralised and inclusive platform — openly available to all to contribute to and use — that will help empower clinicians to deliver the best care."

We can't reasonably expect our GPs to be God, or even close to omnipotent, but we can expect that when such a tool exists, they can use it to improve their diagnoses.

Still wondering about social media in financial services?

Here we have a wiki - a social, collaborative tool - that may well lift the standard of GP care in Australia. Well used, that means savings lives, improving quality of life and lower health care costs as we improve prevention and treatment. 

How long before such a wiki helps financial planners, and their clients, arrive at better decision about long term financial planning? Or helps you make better decisions about the cheapest and best credit card? Or when to flick the mortgage provider and change banks? Choose a super fund? Or how to really cost the services the bank provides? 

Sooner than we think.

Hopefully such solutions will be made possible by joint industry efforts, collaborating with consumers, to develop social tools that give us all access to better financial decisions.

It would seem that whether we seek to be healthier, wealthier or wiser, the democratisation of information long predicted through social is reality. 

Social learning: buzzword bingo winner or simply better education?

Experiential, collaborative and common sense

Once upon a time, as a postgraduate research student, I learned a lot about research methodologies. One was "action learning". It was as it sounds like - learning through action. At the time I thought some flaky social science academic had made that up to justify a lack of empirical data in their thesis. And they may well have.

But as time (frighteningly some 20 years) as elapsed I've come to value "scar tissue". Things that can only be learned by doing. Actually by failing and re-doing until we learn painful lessons.

And decades on from the horror of the group assignment, it's clear to see why we (and generations since) were made to do them.

Because the process is sometimes as important, or more important, than the outcome.

And because in any organisation, big or small, collaboration is key to success. And through collaboration a whole new horizon opens up - the opportunity to learn from the experiences of others. It's an opportunity to learn from three, three million or three billion.

And finally action learning, particularly collaborative action learning, makes perfect sense.

Definition?

Tony Bingham, President and CEO of the American Society for Training and Development (ASTD) defines social learning as "learning that happens outside a formal structure or classroom ... the way people have always learned from each other. Social learning centres on information sharing, collaboration and co-creation."

Social learning is learning with and from others. It happens at conferences, cafes or online - with or without social media tools.

Why is it important?

Maria Ogneva, Director of Community at Yammer, says, "If your goal is to increase customer satisfaction, perhaps the impact metric you are looking for is the increase of speed of a response to a customer, and how collaboration helps you do that. For any social effort to be successful, it has to tie to a business objective."

So in short the team who learns together, works better together.

And in social media or social business working (fast) across distance, division and medium is a basic survival skill.

Who is talking about it?

Mashable: http://mashable.com/2012/05/19/social-learning/

Who is doing it well?

Nokia

Using social media as a tool to learn about their products http://www.blinkx.com/watch-video/nokia-5800-xpress-music/debj4Te6N8GtUR5-UhXTRA

Developing mobile educational products (Nokia Education Delivery, Nokia Life Tools and Nokia mobile mathematics) Nokia reaches out to those who may not have had learning so accessible to them. http://www.nokia.com/global/about-nokia/people-and-planet/impact/social/social-investments/

Some useful links:

100 examples of using social media for learning http://c4lpt.co.uk/social-learning-handbook/100-examples-of-use-of-social-media-for-learning/

An info graphic ... not great resolution but some good facts on social and online learning http://interactyx.com/social-learning-blog/infographic-the-state-of-digital-education/

Top three ideas for financial services?

1. Try a social media internal conference

Use both staff and external speakers and share experiences - with careful content curation it will lift everyone's social expertise

2. Get the C-Suite into a "social sandpit"

Over breakfast or lunch, have every senior executive in front of a laptop or tablet with their own Twitter, a Facebook account and a Pinterest login. This is about safe, anonymous learnings by doing

3. Social superheroes

Everyone wants their five minutes of fame ... a quick employee survey can reveal untold social talent. Given guidelines, secret social superheroes can teach everyone else a lot, and feel rewarded along the way

The real story behind the CEO Sleepout

Financial services bigwigs, political heavyweights and diverse CEOs shared one big concrete mattress last night in Sydney.

All in a good cause, we participated in the Vinnies CEO Sleepout along with 1,046 other Australian CEOs.

Let me be clear. This was not a networking event. It was a night where people without titles lined up for a cup of soup, organised their three sheets of cardboard, heard from people with personal experiences of homelessness then tried to get some shut eye. It was also a night that raised almost $5 million for Vinnies to use in helping the homeless in Australia.

For us it was just one night. For Australia’s homeless it’s much longer.

And it was the Australians with a direct and personal experience of homelessness who stole the show. Not the corporate bigwigs braving a single winter night in the outdoors.

So this post is dedicated to the kindness of strangers, and the power of narrative.

A personal story

Familiar streets look strange this morning. I’m looking at them from the “street level.”  Last night I felt almost queasy at the thought of sleeping outside in winter. Today all I can think about is how many people worry about that every night, and the fractures in their lives that have led them to have no place to call home.

Last night, thanks to three people who shared their all-too-real experience of homelessness, of having no keys, of having no place to go to, I rediscovered the power of narrative. Three people told hundreds of CEOs their story in Sydney last night. Real stories, real tragedy, real pain.

Megan’s story

Megan looks like many other women in a suit. She is well spoken, attractive, in her 40s and has just finished her Master’s degree. Her siblings are a business owner and a lawyer. Her mother is a professional; an expert in her field. Megan told us of how she became the inconvenient reminder for her family of earlier abuse. This meant that when, as an adult, she left a violent relationship with two children, she had nowhere to go, no one to call on, no one to bail her out.

Megan nearly lost her own daughter as their difficult family circumstances led her young teenage daughter to increasingly stay away from home. Megan gave up her job to find her daughter, and in so doing lost the roof over their heads as well as her income. Eventually, it was Vinnies who helped Megan get her life back on track through providing the simple things that most of us take for granted. Beds. Somewhere safe to stay. A meal. People to help her through this time.

The untold story of Australia’s homeless – and the kindness of strangers

We often assume people on the streets are older, male, and have substance abuse or mental health issues that led them to become so dislocated. Some are older, male, and have significant challenges with alcohol and/or drugs. Almost all, it seems, have personal experience of terrible tragedy, of abuse, or of life-fracturing events. Often, it’s many such events that led them to become homeless.

And so this morning, as I headed home in the dark to my three children and my husband, and my warm house, I have rediscovered not only the power of storytelling, but also the power we each have to make a significant difference in someone else’s life.

The power of a nod, and a hello to a homeless person on the street.

The power of a donation to help someone who doesn’t have anyone else to help them.

And the power of allowing people to tell their own stories in their own voice so they may be truly heard.

What will your story be? Will you help with a ‘hello’, a donation or a friendly ear?

Before

After...

uVent: what happens when financial services brands don't listen

If you haven’t heard of uVent, stop what you’re doing and pay attention.  It might affect your job, your employer or your business. And if it takes off it will certainly affect reputations.

uVent is a consumer complaint platform allowing people to complain about products, service or poor treatment they receive from business.

It kicked off last month. The first time I looked PayPal and AAMI were copping it. Now the opening home page tab has a bunch of finance brands, and their number of vents, listed.

Importantly, the complaint stays on the site until it is resolved – which means the business has to take action or suffer the continual indignity of a semi-permanent public airing of the complaint.

Ouch. 

While the site hasn’t been live long it managed to attract a whopping 11,000 complaints in it’s first week.

A side note: the business model is interesting. It allows businesses to have premium access not only to respond to their own complaints but to gain leads from complaints about competitors. At least that’s how I read this StartUp Smart interview with founder Anthony Mittelmark.

uVent has been designed as a sort of neutral complaint resolution centre. The problem big financial services  businesses face is that they’re hampered by internal red tape (also known as compliance ie obeying the law) when it comes to resolving client complaints.  The slower they are the more their reputation will be damaged.  In fact, it’s the lack of response which drives consumers to sites like uVent in the first place.

In the old days clients would complain by phone or letter.  Now they do it in a public forum.

If you think public complaints don’t make a difference, consider this. 

Cadbury chocolate developed a new recipe for its chocolates which involved the use of palm oil, a product that has been linked to deforestation in Indonesia.  A swelling of objections on Twitter and Facebook forced them to abandon the plan.  

GASP clothing store lost its reputation and its customers after their poor service was discussed all over the social media, ending up with spots on the major current affairs shows.  The store at the centre of the kerfuffle closed its doors. Mind you if you saw the footage you might have gleaned a sense that their spokesperson..well...lacked credibility.

But wait, there’s more... Qantas PJs, Domino’s Pizza (ugh), Nestle and even Virgin. 

Social media makes it easy to damage a corporate reputation. At least online. One comment, another comment and then the snowball effect kicks in. So what’s the response?

In many ways uVent is the symptom not the cause. It’s not uVent and sites like it we need to worry about – it’s the way we care for  customers and how we handle negative comments on social media.

No brand is perfect.  And fortunately almost no one participating in social media expects it to be.

What they do expect is speed – a response time that can’t wait for three levels of compliance.  So a good first step is a social media issues management policy and procedure. 

Whether dealing with uVent or other online commentary “winging it” won’t cut it. What can help is listening – and a prepared approach to issues resolution and customer care. 

Knowing what you can do and say, and how - before it happens, is a good start.

The gloomy boom: a self-fulfilling prophecy?

A guest blog by BlueChipper Aideen McDonald

We continue to read in the media and hear from the banks that Australians are saving more than ever. This is a good thing, right? Apparently not, especially if you are an Australian business owner. Whilst we are all too aware of the effects over investing can have on the economy (think asset price bubble…and burst), the outcome of under investing has not been discussed so much.

BlueChip sponsored a CEDA event in Sydney today about Australian business credit – are we prepared for the cost of under investment?

Chairing the event, Carden, MD of BlueChip, cited businesses firing, rather than hiring; businesses saving rather than spending and paying down debt rather than borrowing…all leading to historic low levels of business credit.

The first of the two panellists, Joseph Healy, Group Executive Business Banking with NAB believes it comes down to the current market confidence (or lack thereof) businesses and business owners have in the Australian economy. Or, for short, so-called ‘animal spirits’, that perhaps have business owners more spooked than they need to be.

Healy acknowledged that whilst the Australian system has issues, it is a remarkably resilient, fundamentally strong economy.  A context that makes for golden opportunity – at least if you’re a business owner who is realistic about risk in the current environment, and confident when facing the challenges. Otherwise, he suggested a lack of business investment would lead to longer term problems like a weakened economy, higher levels of unemployment and a cycle that repeats itself.

Panellist, the Hon Patricia Forsythe, Executive Director at the Sydney Business Chamber, addressed the current accessibility of lending to businesses, highlighting that levels of lending collapsed during the GFC and have remained weakened ever since. Citing Sydney Business Chamber research, Forsythe suggested lowered access to business loans has stunted the growth of business investment.

Forsythe believes current government has a central role in supporting businesses during a time of low confidence and weakened lending levels, suggesting a review of the political scene in Australia to de-risk the system and highlight specific sectors that are in need of investment support.

Both panellists agreed Australian businesses need to focus on digital opportunities. BlueChip has advised clients on the social media and digital space over the past few years and is increasingly helping purely online businesses with both traditional and online PR & communication. Referring to Sydney as the key digital hub for Australia, Forsythe encouraged all businesses to embrace the movement into the digital space.

Healy cited an example BlueChip mentioned in a previous edition of PRognosis of Kodak: the demise of a leading brand in the world of technology due to their inability to adapt to a changing and growing world.

The bottom line is this: business owners and business people in Australia should take heart from positive economic signals. But while we all hang back on the edge of the pool, borrowings will stay low – and the overall economy, our customers and our people stand to lose.

If we get carried away by gloom rather than looking, carefully, for boom opportunities we actually risk creating a self-fulfilling (and negative) prophesy.  

Informed leadership will win out for those brave enough to dive in rather than spectate. 

The event was hosted by Angus Armour, MD and CEO of the Export Finance and Insurance Corporation and member of the CEDA  NSW State Advisory Council