You may have alignment in your business, yet still risk losing vibrancy. When risk is poorly managed, long term vibrancy is not possible.
Aligned, not vibrant.
Decision-maker hubris combined with stakeholder fear can create an untenable situation. I expressed similar words in Pivot to Clarity about the failure of Lehman Brothers, and CEO Dick Fuld. We’ve just seen this again with Silicon Valley Bank (SVB), and it’s former CEO, Greg Becker.
Look beyond your workplace.
From appearances, employees of SVB were happy and perceived alignment throughout the organization. If you look at Glassdoor, a site for reviews of companies by their employees, you’ll find many positive reviews. In 2022, SVP even gained mention as one of the Best Places to Work (#44).
SVB and Lehman Brothers had aligned workplaces. Customers trusted the companies. Not all stakeholders trusted these companies and noticed a separation of leadership action from true alignment. The leaders were taking on too much risk.
For Lehman Brothers, regulators saw how risk had been (not) managed and determined Lehman to not be stable enough even for a bail out loan.
In the case of SVB, it was a vocal and revered venture capitalist, Peter Thiel, who started a wave of distrust with a recommendation to pull deposits. Word spread quickly about SVB given the speed of communication amongst digitally connected entrepreneurs with large deposits at SVB.
Alignment must include you, the leader.
One thing about values alignment before I move on. You may read articles about Greg Becker, the CEO of now-collapsed Silicon Valley Bank (SVB) being transparent and pointing to this as a negative. Transparency is a positive display of integrity, one of SVB’s stated values). I see a red herring in these articles, because I don’t see that Becker was always transparent. What I see are hubris and inappropriate risk-taking.
Yes, Becker transparently acknowledged that SVB had experienced large losses on bonds (they sold bonds to Goldman Sachs for a $1.8 billion loss) and were looking for a capital infusion. In that same SVB report you will read, “We are experienced at navigating market cycles and are well positioned to serve our clients through market volatility, with a high-quality, liquid balance sheet and strong capital ratio.”
Given what we know now, the health of SVB was not fully transparent. Hubris is.
Employees may not be as happy today, given that many had a large portion of their compensation tied up in stock. Also, Becker sold a large number of shares, as if he knew what others didn’t. And, SVB was without a chief risk officer for months showing an unusual comfort with unmanaged risk.
Certainly employees envisioned for themselves a greater vibrancy than was real. Alignment at the top is also now suspect.
Check in with yourself.
You may perceive that alignment is enough to stay vibrant. A vibrant business is a great place to work, but not only that.
To stay vibrant, be aware of risk, and manage risk. Give risk the same attention you give to growth. Be “chary,” prudently watchful and discreet in the face of danger or risk, to remain vibrant.
Your best next step
For “Your 1 Best Next Step,” envision your business and life today, and what you might do if you were being chary. Perhaps do this also thinking of awe. Then choose where on this spectrum your business or life will thrive.