I just commented on a post by Scott Berinato over at washingtonpost.com (here). Per my comment, it was a strong, link-rich post that pulled together a lot of threads.
As promised, I did take a closer look at Umair Haque’s piece on “Saving Strategy from the Strategists” (here). I still think he’s seeing a strategy disconnect that isn’t there, but with an additional twist. Yes, the expanded definition of “too big to fail” made inflating the bubble a perfectly rational (if not legitimate or public-minded) approach for many players.
The twist is that the security blanket the Feds provides infantilizes financial industry strategic thinking — especially during serious easing cycles. As the feeding trough gets crowded and frenzied, a firm’s strategy becomes very basic:
- Push hard to get your snout in.
- Lobby hard to ensure you’re not the one institution the Feds will make an example of.
- Settle in for a long meal.
As I said before, what does “the long run” mean when much of the financial industry expects Uncle Sam to keep filling the trough, even if/when things went south?
Filed under: Leadership, Strategy Management | Tagged: banking, financial industry, Harvard Business School, mortgages, Scott Berinato, subprime, Umair Haque, Washington Post
