Denial, anger, depression, bargaining, adjustment: put the banking crisis behind us

Ladies and gentlemen, where are we are the path of psychological recovery after learning, not only that our country is not only flat broke, but that our prosperity in the last ten years was a house built on sand?

Denial?

Anger?

Depression?

Bargaining?

Adjustment?

Denial about the banking crisis is over

I believe we are out of denial.  Do you agree?  Not everyone understands the extent of our financial woes, or the rate that they are getting worse, but we have grasped that when we wake up in the morning, the problem will still be with us.

Anger about the banking crisis . . . still with us?

Much of the citizenry is still very angry about the financial crisis.  We are still looking for someone to blame and somebody to hurt back in return for the hurt we have suffered?

Am I right so far?

Depression . . . the politicians are depressed about the crisis?

Politicians, to a man and woman, seem depressed about the crisis.  They are busy having meetings and telephone conference calls.  But by-and-large, they are being busy.  Of course, they are busy. They are ‘shaking the tree’ or in the parlance of a domestic household, looking down the sofa for small change to pay the rent.  That doesn’t put anyone in a good mood.  But their gloom is the result of more than penny-pinching and cash flow management.

Do you think they are acting with a positive sense of the future or just getting-by?

Bargaining  . . . what does bargaining look like?

What does bargaining look like anyway?  I don’t really know.

In other countries and other crises, I have seen people protest a country’s position ‘between a rock and a hard place’ by going on ‘fasts’ (not, hunger strikes, ‘fasts’ or ‘pacts with God’).  The country didn’t move forward very much but the fasters did get very slim and they learned to get up early in the morning.  I can say that for their methods.  Whether their lives improved in other ways, I doubt.  Unsurprisingly, they did very little work.  Their electronic diaries were pristine with the exception of their prayer schedules.

The secular equivalent of keeping one’s head down can be just as dangerous, by-the-way.   It normally involves being very busy doing-the-boss’-bidding while he or she sits out of harm’s way- a bit as Carne Ross described in talk at LSE this week on life as British diplomat.

Does satire play the role of bargaining?  Does laughing about ‘their idiocy’ without taking action not perform the same function of reducing emotional concerns without moving forward?  Resignation rather than adjustment which is really a form of bargaining?  If I laugh, then it will be alright?

Is writing this post a form of bargaining?  I guess it is.  I am being an observer of ‘them’.

Adjustment . . . is it possible?  Can we just adjust and get on with it?

If I don’t really understand bargaining (as much because we think this stage of recovery is a delaying tactic rather than useful), I do know what adjustment is going to mean.

Adjustment is accepting that we were all part of the mess and are all part of the mess.

Adjustment rests on a foundation of “who we are”.  Who are we loyal to?  Who is ‘me and mine’?  Until we really feel solidarity with each other and are willingly to form a new social compact based on that solidarity, then we aren’t going anywhere fast.  We will ‘lurching from church to school’.  I’ve no idea where the expression came from but it conveys the idea.

Our solutions will be in direct proportion to our solidarity.  While we hate each other, our solutions will be correspondingly mean and inadequate.

Getting to adjustment in a country that is in trouble

Getting to ‘adjustment’ when a country is severe trouble is a tough one.  The psychological key is our own good temper, or whatever kernel of good temper that we can find.

When we identify what we believe is good in Britain, when we can point to what is, rather than to what we want to be (usually through someone else’s efforts); until we believe the something is sufficiently good that we are willing to get out of bed to work on it, whether or not anyone else is working on it, we – I mean you, I mean me – are not going anywhere very fast.

The questions, to me, are three fold:

  • What is, right now, is so good that it fills me with awe?
  • What is, right now, that I can bounce out of bed to look after and nurture?
  • What am I willing to do right now, whether or not you support me or not, but which can include you if you want to be included?

Keeping my good temper intact

So here I am writing a post ‘about’ Britain – and in a way about what is wrong with Britain. Here I am apparently procrastinating and avoiding doing some work which has shards of pleasure and the sharp edges of tedium.

Am I being a hypocrite?  Or am I saying that I like to process the news and know what I think and feel?  Am I saying that I like to read between the lines and see the big events that might be affecting us all (the government is looking for small change down the sofa)?  Am I saying that I like to use the heuristics I have gathered over the years to think economically?  Am I saying that I think people like Carne Ross (apostate diplomat) are right?  Change in UK will not start in Whitehall. It will start at street-level with small matters, with whatever we care about executed, not an angry, contested manner (even when that is concealed under do-goodery), but in a respectful, collaborative manner that demonstrates democracy in the minute detail?  Am I saying that I like Web2.0 (blogs etc) because they minimally give me a neat place to store my thoughts and writings and a place where others can read them if they choose?

And having cleared my mind, I can get back to work, because work is like hoovering the carpet – it’s not much fun but the results are pleasant.

And for every moment I spend doing work that matters, I might be building a foundation for future solidarity.  And from there we might find solutions to build a Britain fit for the next 50 years.

So here ends my thoughts on where we are psychologically in making sense of the financial crisis using the well known heuristic of the grief cycle – denial/not us,anger/blame, depression/loss of direction, bargaining/magical thinking, action/affection.  The kernel of your good temper is Britain’s future.

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Are we done ‘bargaining’ about the financial crisis? I wish, but I don’t think so.

Denial, anger, bargaining, depression, action & the financial crisis

This time last year we were definitely in the first of the five stages of grief.  Denial: we couldn’t quite believe that the bankers had blown a hole below our a waterline.

A year later, economists at least, have moved on.

The Governor of the Bank of England said

The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy.

To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.” (Governor of the Bank of England, in a speech, 20 October, 2009. )

Yes.  One trillion pounds sterling, 66% of the UK’s annual GDP of 1,4 trillion pounds has been put aside to mend the hole, lest it sinks the entire ship of state.

I don’t think the man and woman in the street quite grasps the size of the hole.  If they did, they would have stormed thelife-boats.

Professional economist are beginning to look at alternatives

The economists are beginning to debate seriously though.

Do we cut back hard to pay down our national debt – for which you and I must read – government debt?  Should the government stop spending like we might when we’ve just had an overseas holiday and put too much on the credit card?  Cut out all the luxuries till we have paid off our excesses?

Or do we need Keynesian economics to get out of this?  That is, should we spend money from the center to create a ripple effect?  For example, should the government spends 100 pounds on a new school, who pays the builder who pays the suppliers and who pays their suppliers who pay the supermarkets and who ultimately pays me.  All of us take part and we all pay tax and don’t claim benefits?

Ann Pettifor’s talk on Keynesian economics is 20 pages long.  If you are not an economist, put aside a couple of hours to get through it. It is worth the time.  First, it is clearly written.  You will understand the issues. Second, it is well written. It is nice to know that someone in England can still write a great speech (though she appears to live and work out of the States now).

Where are economists on the grief cycle?

So the economists are beginning to look at the facts.  What stage of grief are they in?  We need to know this so that we have a sense of how long the dilly-dallying will go on.

  • None are really proposing action.  The actions of others, yes, but not their own.  But they are along the track.  I would say the independent economists are around the bargaining stage – if we do this, it will be alright!
  • The Governor of the Bank of England, though admirably witty, seems to be further along around the depression stage. I do hate writing that.  It feels like tempting fate.  It’s relevance is this. It’s important to have a sense of when we will move collectively out of the state of shock and deliberation.  And it is important for younger psychologists reading this to store away a sense of how long community’s take to recover psychologically from extreme shocks so they are better able to lead when shocks happen in the future as they surely will.

We are gathering ourselves for action

We are still waiting for the leaders whose plans are not contingent.  We are still waiting for the leaders who say this is what I am going to do. This is what I am wholly committed to doing ~ so much so that I don’t have to say I am committed.  You see it in my eyes. You see it in my focused attention.  You see it in my invitation to join me.

We have a way to go.

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6 questions that I ask professional career coaches

Where were you the day Lehman’s crashed?

I had spent a long day sequestered in an office building in London. Coming out into the dark evening, I was surprised to see a serious story in the free newspapers handed out at the entrances to the Tubes.

The 158 year old bank, Lehmans had declared bankruptcy and 10 000 financiers, bankers, clerks and support workers who arrived at work on the prestigious Canary Wharf were told they must cease trading and clean out their desks.

Our response to abrupt crisis

Abruptly losing your job and your livelihood is not a disaster but it is certainly a crisis. Some of Lehman’s employees may have taken the first plane out to a sunny beach, but most of them would have sat around the next day wondering what to do. The day after would have been a day of rumination. What went wrong? Could it have been avoided? Who is to blame? And, ultimately, what should they do to retain the same income, status and meaning in life.

Career coaches and people in career crisis

Many career coaches will see erstwhile employees from Lehman’s and may have seen some already.

Proxy career coaches in the form of doctors, bank managers and employment agents will see them sooner. What is the best advice that we can give Lehman employees and all others whose way of life comes to an abrupt, surprising and juddering stop?

What it feels like to be in a career crisis

The first thing we need to remember is being laid off is a rude shock. Having had no preparation for the event,

  • Ex-employees do not know what to do
  • Ex-employees panic
  • Ex-employees want it to be ‘all OK right now!’

Our task as career coach

Ex-employees may have no experience or training in damage control. They may be have no experience in managing their own emotions and attention. This is our task if we are to help them succeed. We must help them to

  • Regain emotional equilibrium
  • See the solution
  • Regain control

What we will achieve as a career coach

We are not, though, going to make it “all OK right now”. Our clients will want us too.

A year ago when Lehman’s crashed, even the pundits thought we might spring back to normal like a new elastic band.  But, for most people, the early teens of the 21st century will be a time of enormous transition. A country with a GDP of 1.4tr cannot dole out 1.0tr without having to make some adjustment.

Yet there is a flip side to a bad situation.  When your house has burnt down so to speak, there is little point in building one that is exactly like the one before. We build a better one.

Our challenge as a career coach

In the early stages, when our clients want everything to be OK, when they are in the first of the five stages of grief – denial – they will not want to work through the long hard slog of rebuilding.  They will want everything to be bounce back. We have to work with them even though they are in no mood to work.

Helping them find any foothold as they work through their grief is important. Listen to them. But also help them keep moving. They have a lot of rebuilding to do and every small step will be important when they emerge from the emotional turmoil further along the line.

The career coaches that we need

Coaches who can do more than say “aha” are needed now. We need coaches who can help people take baby steps while they are overcome with emotion.

6 questions I ask professional career coaches

It is amazing that this is not taught on work psychology degree programmes.  These are the first 6 questions that I ask professional career coaches.

  • How do we work with people overcome by grief?
  • What practical steps can any of us take when our career and life has fallen into an untidy heap?
  • How long does it take to rebuild a career mid-stream?
  • How soon can we introduce the idea of rebuilding a better career to a client overcome by grief?
  • How many people really do rebuild a better career after such a disruption?
  • What distinguishes those who begin that project from those who don’t?

Positive psychology and an adult response to the financial crisis

The day I crossed the Rubicon to adulthood

It was a hot, in October. The rainy season was approaching but had not yet arrived. A fan was going full tilt in my office. Behind me, my windows were shut. Below my window, our lorries belched diesel fumes as they queued to exit the factory gate and take flour and maize meal for hundreds of miles around.

My phone rang and in the brisk and formal business culture of Zimbabwe, I answered it promptly: “Jo Jordan. Good afternoon.”

My caller came from outside the company. We had been at university together. And she had a lot to say about the local psychological association. I agreed. And said so.

Then I drew myself to a halt. I was the Secretary of the Association and had been for 3 months. If there was anything that needed to be done, it was my job to get it done.

And hence, I crossed an important Rubicon. I was no longer teenager/student/young adult . I was a citizen fully responsible for the way we ran our affairs.

When did you make the transition from adolescent to adulthood?

Some people never make that transition. Forever, everything is someone else’s responsibility.

Today, something in my feed caught my eye and jolted my memory of when I grew up on a stifling hot and dusty day when we were waiting for the rain and for the new agricultural season to begin.   The story was about the general loss of respect for employers in the wake of the banking crisis.

Employment is not a private activity

A feature of employment law is that the manager, representing the owner, knows best. It is an absurd assumption but some people insist upon it. When we do, we take on a mantle of responsibility, not just to the owners, but to people on whom we imposed our judgement. And to deliver, we have to manage events not just inside the company but outside too.

We cannot manage the rains, perhaps. But we are responsible for responding adequately to the weather, whatever it brings.

Our outrage at the bank failures and MP expenses

The reason why the bank failures and the MP scandals have shocked us so is not the professional errors themselves. Few people understand exactly what happened in the banks or the mysterious absence of accountants and auditors in the Houses of Parliament.

But we do understand that both groups claimed status that put their judgement above ours. And they weren’t able to deliver on their promises they made when they arrogated status about ours.

We are hearing arguments from bankers and MPs that the privileges of office must be sufficiently high to warrant the responsibility they carry.  So they do understand what they promised!  But their arguments are back to front, of course. First, they need to show they can carry out even the basic responsibilities of public office before we worry about awarding privileges!

All public office, being a prefect at school, being secretary of the sport club, and for that matter, being a director of a private company carries the same basic responsibilities.

Implicitly, we promise to

  • Speak up when something is blatantly wrong
  • Live up to the procedures of contract and documentation that our culture has worked out over the centuries
  • Understand where the world is going and make adequate provision for the range of events that might occur
  • Show uncompromising loyalty to the people we represent and presume to order about
  • Represent the whole team without whining and making excuses

There is a big difference between nitpicking and exercising our office responsibly

You may feel my argument is completely wrong

It may be that you see no connection between the behaviours I listed and things going right or wrong. If you don’t, I’d be happy to see a rebuttal but experience tells me that you will not advance a logical argument. You may argue that no one will notice any way. You will probably just dismiss me with contempt.

You may dislike nitpicking implied by rules

You may also have an inherent distrust of nitpicking. Exercising judgement and compassion, I would argue, is different. People who exercise judgement and compassion don’t hide behind rules. They judge the situation and manage it so that we achieve the outcome we want and help the person we assisted grow into a leader themselves – responsible, thoughtful, effective, loyal and with good moral & practical judgment.

You may feel you have no responsibility to anyone but yourself

It is also possible you see your job about looking after you and your own rather than every one around you and beyond. You are likely to have made up your mind on this point quite early in roles that you held at school, college and university. Early on, you will have decided how you would execute collective responsibilities.  Is the group there for you, or you for it? Did you speak up when things were plain wrong.  Or did you allow rubbish to accumulate thinking you would be out of the picture before the results became evident.

All that is necessary for evil to triumph is for good men to do nothing

You will know your own opinion, of that I am sure, and you might tell me here.

But it is likely that I have divided opinion. One group will dismiss me with contempt and pity.

They other would like to know more about acting responsibly and would like to work in environments where responsibility is more highly valued.

Is it too much to agree with Edmund Burke that we all allowed the system to drift into such disarray?

Where are doing exactly the same thing – keeping our heads-down because we believe so little in the people around us that we don’t believe they will listen or care?  Where are we speaking up contentiously and carping and whining rather than engaging on matters that we are responsible for?

Should we begin by ticking off parts of the system that work well and doing more of them?

The ONE big reason why I am not worried about the banking crisis

The banking crisis is bad and a lot worse than most people think.  But I am not worried.  And this is why.  On front after front, scientists and science-based professions are making enormous technological advances.

As I am a British resident, I am interested in this:

Who and where are the top scientists and technologists in UK?

Juan Enriquez talking on science at TED (via YouTube).

UPDATE July 2010:  The science appears to be out there but business seems to be sitting on its hands  . . . or on its cash rather.

Business isn’t moving spare cash from old industries to new.  The failure to allocate capital to new productive industries would be catastrophic at any time.

In the midst of a financial crisis, not funding growth will bury us.  Couple the removal of cash from the economy by business with the austerity measures in Europe and by state governmnents in the US, we have a recipe for  a depression – not a double dip recession – a depression.

It’s time to find businesses that are going somewhere and going somewhere despite impending chaos.  Get behind them.  Put all your skill and connections into making them work.

From anger to effective action

Anger: Stage Two of the Banking Crisis

Today, senior bankers fronted up to a Select Committee to make their apologies.  Shortly afterward, BBC ran a chat show and asked the public whether apologies were enough.  The public had a lot to say and the BBC presenter was clearly testing the depth of our anger.

Anger is Stage Two in the FIVE stage process of receiving bad news: denial, anger, bargaining, depression, acceptance.

So what does acceptance look like and how do we get there?

David Whyte, corporate poet, tells a good story that helps us understand the beginning and end of the five stage process, what we have to do to move from start to finish,  and why it is so difficult to take the first steps.

Whyte was trekking in Nepal.  He had left his friends and came, alone, on a ravine with a rope bridge in poor state of repair.  He was horrified.  It was too dangerous to use the bridge and too late to turn back and rejoin his companions.

So many situations are similar. We are stuck. It is too dangerous to do what we want to do and we cannot immediately see a way out of our predicament.  We are overcome by a mix of frustration, anxiety, shame and fear, and are in Stage One and Stage Two.  We are ‘all emotion’, and reasonably so.  After all, we are in trouble.

But in that funk, we cannot think clearly and cannot find a way out of our dilemma.

Tomorrow, I’ll break the situation into psychological terms and point out what we have to do if we are ever to move on.

Come with me!

You know, that credity thing

A young female of White-fronted Capuchi Monkey...
Image via Wikipedia

With apologies to a London cab driver, what do I want to know about the credity thing?

I’m very interested in understanding the financial crisis, the meltdown, the credit crunch, or whatever you want to call our current predicament.  There is a lot of talk about managers’ bonuses and  the USD70 cost per hour for a worker who makes my car (is that a lot?), and surprising little talk about the role of legislation and the culpability of Company Directors.

I would like to know a lot more about the cost break downs in companies currently in the spotlight, and in our vision for Britain in the next 50 years.  Who will do our work?  Who will deliver our letters and our babies?  What work do we want to do and what is it’s price on the world stage?  I would like conversations about all these issues.

Curating clear presentations

For now, I am collecting straightforward descriptions of the crisis and posting them on one page.

Many of you may be familiar with Peter Fryer’s work on emergence in organizations and his concept of Trojan Mice.  If you don’t subscribe to his monthly newsletter, you should.  It’s packed with quotations and links and if you read nothing but his newsletter, you would be well served.

In December, Peter included a magnificent description of SHORT SELLING which will help you explain it to anyone, regardless of their education level.

It’s good for a weekend smile.  Here it is.

Once upon a time, in a village, a man appeared and announced to the villagers that he would buy monkeys for £10 each. Seeing that there were plenty of many monkeys around the villagers went out to the forest, and started catching them. The man bought thousands at £10.

As supplies of monkeys started to diminish, the villagers ceased their efforts. The man then announced he would now buy at £20. So the villagers renewed their efforts and start­ed catching monkeys again. Soon the supply of monkeys diminished even further and peo­ple started going back to their farms. The man increased his offer to £25 and the supply of monkeys diminished to the extent that it was an effort to even see a monkey, let alone catch one. But the man now announced he would buy monkeys at £50!

However, since he had to go to the city on business, his assistant would now buy on his behalf. In the absence of the man, the assistant said to the villagers: “Look at all these monkeys in the big cage that the man has collected. I will sell them to you at £35 and when the man returns from the city, you can sell them to him for £50 each.” The villagers thought that was a great idea so they collected all their savings and bought all the monkeys.

They never saw the man nor his assistant again. But they had plenty of monkeys Now you have a better understanding of how the stock market works.

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.

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A casestudy of good HRM from Africa; and now from UK please

Giraffe Manor, Nairobi, Kenya

 

Image by Danny McL via Flickr

To keep our heads when those around us are losing theirs

We are living in calamitous times and it is not surprising that people are using strong words.  The essence of the credit crisis seems, for now, while we wait for a thorough post mortem, a bad case of “emperor’s clothes’.   What irony then that we act with scant regard for the technique of our respective professions, or the decorum we expect from people who wield influence.

Using African ‘names in vain’

Yesterday, I was shocked at the language used on Twitter to describe the detention of Corsi in Kenya.  I am not closely acquainted with the case but it seems Corsi arrived in Kenya to promote a book highly critical of Obama, who as you know was born in the USA of a Kenyan father.  Though I am not closely acquainted with the facts of the Corsi case, the accounts seem odd.  A) Would the profit on sales of a book in Kenya even cover the cost of the visit (are any books even on sale there?)  B) Kenya has just recovered from massive and murderous unrest and someone visits to provoke controversy? C) A US citizen arrives on business in a country he does not know well and he hasn’t requested prior assistance from his embassy (or has had his request declined)?

I have no idea which of these is true, if any.  What shocked me was the alacrity with which Tweeters referred to Kenyans as Obama zombies (@SmoothStone) and to the place where Corsi was being questioned as Torture House (@susan_s_smith).  Looking at their home pages, the first tweeter is Republican and the second Democrat.  I suggested to both that they apologise to African tweeters and only @susan_s_smith replied, unless I missed the other.  She was bemused at what might be offensive.

Emperor’s clothes

Returning to the times we live in, there are huge question marks about the way we are managing large powerful companies.  The Economist today summarized an article in Harvard Business Review suggesting managers should be held accountable for the effects of their management, in the same way we hold doctors, lawyers, architects and others to account for their professional competence.  It is time we lifted our game. Not to do so will lead to the equivalent of the credit crunch in other sectors too.

What we can we do

We are all guilty to some extent.  In HRM and related professions, we persist in muddling through and disregarding what we know to be the acceptable standards of our profession.  To link back to the Kenyan theme, follow this link to a newspaper article on HRM happenings in Nairobi.

Note the willingness of the newspaper to call the incompetence.

Note the ability of the newspaper to tutor its readership on what should be done.

Note the coherence and depth of the recommendations.

And above all note the temperate and professional language.

To those that way inclined, please desist from using cheap racist tactics of ‘dis’ing’ someone by invoking stereotypes of African incompetence.

To those of us who care about the professionalism of HRM, let’s move on to use the sound research done by our universities, and run our organizations in ways which we would make us all proud.   The Kenyan newspaper article sets a standard we can meet, should meet, and have no reason not to meet.  It is an excellent example for a university classroom and I have put it into my intranet.

I would like to add British case studies of equal professionalism that model for students

the HRM that we should be

HRM that adds value

and HRM that offers leadership in these distressing times.

If you have a case and you are not a blogger, I’d be most happy to host your article here, and even to write it with you.  If you are a blogger and you have a case, let me know and I will deep link back to you!

Have a winning day!

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