Future Bank Managers
5 May, 2018
Bank Managers, living with the ideal of the Threefold Social Order within them, will ask different questions of businesses than they do today. Today, the questions asked of a borrower from the bank are based on establishing whether the borrower has enough assets to secure the borrowed money to the bank, then lender. Their logic is, somehow this business, the borrower, has come across some assets and needs more funds in order to expand or improve production assets or its trading finance. Will the existing assets provide security for the new funds required? If they will, the lender will generally fund the borrower in today’s logic. Secondary level questions are asked about market conditions, the order book level, competitor activity, any supplier problems or quality problems and so on. The lender will look at historical financial trading statements to see trends of turnover, margins, and fixed cost levels. All this is what we experience today from the banks. So why is it like this and why would the future have the possibility of being more real?
I refer here to my paperclip example. A paperclip, as simple a device as it is, can only be understood if all relevant concepts are linked to its simple form. The concept that is not easy to see in a paperclip is the torsion concept in the middle bend of the paperclip, with the levers on either side of this bend. Without being able to link all the concepts required to understand a paperclip, one will simply not really understand it and hence talk about how it works in a false way, perhaps convincing, but false. Bank managers of today understand the concepts of bad debts, interest, cost of money, security cover, how complex people are and how devious borrowers can be, uncertainty in markets and so on. T hey understand income statements and balance sheets and trends and more. So what is it that they don’t understand? What concept are they missing that is absolutely necessary to understand their role better? Let’s try to answer that.
The financial statements that they are looking at are historical. The asset base that they are looking at has come about historically. Nothing about nature has changed during the time period over which the asset base was built or the trading was done. For example, the properties used on which these business activities took place are in the same place and gravity still works there, rats still live there; birds still nest there and the seasons still affect daylight hours and so on. If one were to withdraw the people from the business premises, nature would start to ‘re-inhabit’ the space that people have made into a business. The income statement of the business would start to look rather awful as the people have left. The assets would deteriorate. Interest and capital payments to the banks would stop. This is an extreme example but relevant to highlight that only people can create these things that we call businesses today. People are more than animals in that they can think, plan, design, organise, assess, re-evaluate, meet, converse, measure, respond, and so on. This human element, that is more than animal nature in us, is what a business depends on. It is this humanity in us that is the forming and co-ordinating ‘agent’ that keep a business in form and function and operating within nature but in a nature that we give it.
With this concept of the humanity in us now added to the conceptual framework of bank managers of the future, the liberty sphere somewhat understood by them, they will be able to ask questions quite differently and much more pointedly to enable them to address their real issue. They will ask questions like:
• I see your historical income statements, what was your thinking and planning around the sales figures? How did you co-ordinate your sales staff’s training and development to be able to share the value of your products to others in the market? Who was the real leader in all this and what lived in them that enabled them to effect this interaction with the market? Are they still here? Could we talk to them and find out what their motivation is to stay still?
• Who selected your manufacturing technology? Why did you choose this technology? How have you been able to maintain it? Where do the numbers in your income statement show us that the technology choice was right? Are you thinking about any changes and if so why? Who will be able to pick up this area of skill and experience if Jack leaves?
• What does your income statement tell us about where you failed to deal with issues? What are you going to do to try to make sure that the income statements going forward reflect your thoughts in this regard?
• How are you going to keep the excellent people that you have in key positions? What are your human development plans?
The gist of these questions is that the business will look like what the people are inwardly as human beings, in their humanity qualities. Historical numbers are historical and are only relevant to the extent that they are grasped as a reflection of what people were able to achieve as the humanity in them. Future numbers will also reflect this. The lenders depend solely on our ‘humanity’ to get repaid. It is only us who can plan, design, meet, communicate, reconsider, measure, report, analyse, synthesise and so on. Bank Managers of the future will know this deeply and be much more attuned to assessing the humanity in their clients. Current computer analysis of funding applications will fail the banks if it is all that they rely on.