Where Did the Honesty Go?

CM2016_10_honesty.pngOn Thursday afternoon last week I went to take some money out of an ATM. I had to wait in a queue, but when it came to my turn I saw that the person ahead of me had forgotten to take the cash with him.

I took it, and turned looking for the guy, who had by then crossed the road. I shouted, but my voice was lost in the traffic. I made my transaction and raced after him on my bike. I couldn’t find him and after about 15 minutes I gave up and went home.

It wasn’t a small amount, so I contacted the bank via a twitter DM. Based on that discussion I went into a bank branch on Friday to hand in the money. I had to wait. No big deal, I simply read a book, until a very grumpy man began shouting at me (not kidding), I didn’t understand what his problem was but offered to move “Yes move” he shouted. I moved, other customers were as astonished as I was.

It was pretty busy, and the bank staff came to check on what everyone needed as a sort of triage to help people faster. I explained; “Please wait” I was told

I waited.

My turn at the desk came, and it took a phone call and a bit of searching to figure out what to do, apparently this is not a usual situation. I gave them all the info I could, including my own transaction information so that they might be able to track down the poor guy who missed out on his cash.

The bank gave me a small thank you gift in appreciation – super kind of them and certainly not expected.

Now here’s the bit that really struck me. Everyone I encountered was surprised at what I was trying to do. The initial messages on twitter begin with “Wauw” (Dutch for “wow”), the clerk I spoke to reported that the previous customer had heard my statement and commented that “she’s still here having been yelled at trying to do the right thing – we need more people like her”, the clerk herself thanked me and when I said it was what my mother taught me added “we need more mothers like yours”.

Here’s the thing; the money wasn’t mine.

A million years ago I found a watch on a public path, my parents took me to the local police station to hand it in. Some months later the watch hadn’t been claimed and it was returned to the finder – ie; me. I don’t remember what happened to the watch after that, it was a large, man’s watch and not really my style. But the lesson was learnt, if it’s not yours you don’t just take it, you try to get it back to the owner.

So I tried to return the money, and apparently this is so unusual that people are surprised. It’s the honest thing to do. Indeed to me it was the only thing to do.

Does this mean that any of those other people would just have taken the money? Would you have taken it?

Do we really need my mother out there teaching people about being honest and not taking things that aren’t theirs? She’s up for the job I promise you.

When did honesty become so surprising?

Image: Untitled  |  Jane Cockman  |   CC BY-NC 2.0

Ethics and Company Culture

…the bankers of course deserve their [fair share of the blame] too, but it’s not healthy for us to continually berate them, not all bankers are bad. You might never hear a banker say “I’m just building up some money so I can build a state of the art homeless shelter where tramps can live in peace, safety and comfort”. But then you’d probably never hear a doctor say that either. The bankers that got us into this mess deserve to be attacked but banking on the whole is still vital to the UK economy and not all bankers are evil. Those who have been tasked with sorting out the mess deserve our support…. I don’t know who people expect to be running RBS these days – Alan Titchmarsh?

Finally some balanced commentary. Where did I get this from? Well it’s a transcript from Friday Night Comedy on BBC Radio 4. Yes Matt Forde a comedian commentating on the state of banking.

He said “not all bankers are evil”; and yet as story after story breaks of improper deals, questionable morals and shoddy treatment of customers it’s easy to doubt it. In the week of Matt Forde’s riff we’d seen the latest “exposé” from Greg Smith who denounced the corporate culture of Goldman Sachs.

But I remained convinced that not all bankers are evil; I should add a disclaimer here – I work for a bank, although not as a banker. We’ve had plenty of mud thrown at us over the last few years – not all of it justified – and the company has changed. It’s more humble and more straight-forward, I know it’s not easy to see that from the outside, but it’s very evident from the inside.

I recently downloaded a copy of “Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right” and when I read chapter 8 “Mabel Yu and the Vanguard Group” a lot of what I’d been thinking fell into place. (There’s an HBR article summarising this)

Mabel Yu was not the most experienced, highly expert financial analyst in the world. But she asked a lot of questions, the right questions, and when she didn’t get satisfactory answers she refused to invest. Her decision meant that the company she worked for, Vanguard, did not buy mortgage related bonds despite their AAA rating. The managed to steer around the whole sub-prime mess, and preserved value for its clients in a time when the sharemarket was diving.

What is clear from the book is that although Mabel Yu is unusual in making the right call amongst the thousands of analysts around the world her behaviour is “business as usual” for Vanguard. Their company values are taken seriously;

  • Every employee is taught that “it is a privilege and an awesome responsibility to be entrusted with the financial hopes and dreams of its customers”.
  • There is a strong recommendations that analysts and portfolio managers do not invest in financial products they do not fully understand
  • Vanguard promotes the view that “one person can make a difference”

These three values in particular meant that Mabel Yu felt responsible to the clients who were trusting the company with their money, motivated to fully understand the products being offered, and ultimately able to state her concerns and advise the company not to invest.

It wasn’t the first time the companies analysis was “off-trend” but ultimately proved correct; in the early 2000s the company had resisted the temptation of the technology bubble – because Vanguard does not aim to “time” the market for short term gains.

With that corporate culture set out – with the customer focus, the expectation of professionalism, and the faith that you can make a difference – it was easy for Mabel Yu to dissent, and dissent was the right decision for the clients and the company.

So how do you build that? It starts at the top. As a result of the publicity her managers expressed pride in her work, but commented there were other similar examples in the company that had not made it to the media, emphasising how normal thorough analysis and dissent are at Vanguard. The company hires for ethical attitudes, and sets out a company culture and investment practices that support that culture.

In another telling example of the frugality of the company John Bogle, the company’s founder, took Mabel Yu to lunch to thank her for her work on the mortgage backed bonds. He used the $5 reward voucher system they use to commemorate birthdays and successes within the company.