An anti-globalisation duet: Trump & Corbyn

Why domestic bank M&A is set for a boom

As Donald Trump and his toupee continue to ride high in the US presidential opinion polls, I find myself musing on his fellow jockey, UK Labour Party leader Jeremy Corbyn.

Mirror images of each other on the political spectrum, they will never lead their respective countries. Yet the unelectable duo are worth listening to, for they represent large elements of the population that are opposed to the globalised world we live in.

Take their attitude to free trade. Trump calls for a 15% tax for outsourcing jobs and a 20% tax for importing goods, and sees trade deals as “killing American jobs.” He believes trade negotiators are a bunch of “saps” and says he would appoint corporate leaders to do the job properly. Corbyn warns that TTIP, the prospective trade deal between the EU and the US, is nothing but a capitulation to “greedy bankers and multinationals.”

His refusal to campaign for Britain to stay in the EU has, ironically, withdrawn a major weapon from the Conservative government’s armoury for its future referendum. Corbyn and his allies, who embody the discarded remains of the Left’s 1970’s euro scepticism, see the EU as representing the interests of big capital. Rather paradoxical, given that big business sees the EU as excessively defensive of workers’ rights and the progenitor of too many regulatory burdens to protect citizens.

Trump and Corbyn, one 69 years old and the other 66, both fail John Maynard Keynes’s three imperatives for a balanced government. The economist and statesman wrote: ““The political problem of mankind is to combine three things: economic efficiency, social justice and individual liberty….the third needs, tolerance, breadth and appreciation of the excellencies of variety and independence, which prefers, above everything, to give unhindered opportunity to the exceptional and aspiring.”*

For Corbyn, social justice can be achieved without economic efficiency and individual excellence. This would result in a country with not enough profits to pay for a safety net for the disadvantaged. The reality for Trump, who would lay claim to both economic efficiency and individual liberty, is a country where protectionism kills efficiency and individual liberty applies to some, but not all. And certainly not to the roughly 11 million illegal immigrants who water his many lawns and serve in his many restaurants.

Just as surprising as their similarities, are their allies in the anti-globalisation movement. Joining them in the stop-the-world-I-want-to-get-off gang, are financial regulators on both sides of the Atlantic.

The European Central Bank’s post-crisis conventional wisdom is that geographical diversification of multinational banks does not protect against risk and adds a layer of complication. Long gone are the days when banks followed their corporate clients abroad and then proceeded to buy local entities and grow. The European Central Bank “comes out in a rash” when a Spanish bank mentions buying bank assets in emerging economies, affirms a bank CEO. The Federal Reserve in the US takes the same position, according to most accounts.

Regulators learned a lesson from the last financial crisis. It may, of course, not be the right lesson, for every crisis is different – the drying up of wholesale bank funding markets in 2007/2008 was very different from the run on the deposits of 37 banks in the Japanese Empire in 1927.

With foreign expansion off the cards, cost cutting reaching its finale, new digital entrants threatening the traditional business and financial supervisors breathing down their necks, banks will focus on local acquisitions to grow their profits. A domestic M&A boom is forecast for 2016.

Regional movements like those in Cataluña and Scotland are part of the anti-globalisation trend. Allied to the sense of alienation from their existing rulers is an almost blind belief that raising the barriers will lead to paradisiacal economies with full employment.

To these misguided idealists I would add proponents of Brexit, the exit of the UK from the European Union. The world is moving into ever larger trade groupings. Being outside is not a reasonable option for a major country – unless there is an appeal to being emailed instructions from Brussels without having a seat at the table. Norway pays a heavy price for its nominally freestanding position since it is forced to incorporate EU legislation into its own.

In 1944, Keynes warned in the House of Lords against “little Englandism” which pretended that “this small country” could survive by a system of bilateral and barter agreements or by keeping to itself in a harsh and unfriendly world. His words continue to ring true.*

Both Trump and Corbyn remind me of the rutting impalas I saw in Zambia this summer. A fresh male impala, the handsomest and most macho, fights off the others to breed with the herd of females. After around three weeks of non-stop sex, with no time to feed or groom himself, he is weak and easily taken out by a challenger, a young buck from the group of male impalas. If he’s lucky, the exhausted male impala might then re-join the all-male herd or, just as likely, be eaten by a herd of lions.

The only question about the future disappearance of fraternal twins Corbyn and Trump is whether they slip back into their old lives or are gobbled up by the forces of globalisation.

*Universal Man: The Seven Lives of John Maynard Keynes by Richard Davenport-Hines

Six Steps to Retaining Your Promising Female Executives

686 Lord Mayor Fiona Woolf advises

The City of London retains its ranking among the top two global world centres, but Asian centres are snapping at its heels. The City is only as good as the talented workforce that joins, grows and leads it. The fact that too many promising female executives drop out is a problem that must be addressed as part of the ongoing work to boost its international appeal.

Dame Fiona Woolf, 686th Lord Mayor, instituted the Power of Diversity programme in her 2013/14 term, a strategy followed by subsequent Lord Mayors. Here are her six practical steps to retaining women and supporting their rise.

1. Think of it as Talent Development

I ran a survey a while ago that delivered the unsurprising answer that the quality of supervision and personal development were the top factors that would keep people in a job. Next came the quality of work – everyone wants access to the top jobs. In people businesses (and most businesses claim that they are), success depends on recruiting, training and deploying the best talent so that it gets better all the time. When I ask how many of us have been trained in on-the-job talent development, very few hands go up. We should teach managers how to develop skills and create an environment where everyone learns from on-the-job experience. Regular “what went well, what went less well” conversations would be good. I am a fan of sharing individual development plans. Transparency about the way work is allocated will help to deal with unconscious bias, such as the assumption that a woman with a family will not want to get involved in a big deal, without asking her.

1. Identify and Motivate the Keepers of the Talent Pipeline

Many of the keepers of the executive talent pipeline are managers at mid-level who are busy doing the work, generating the income, looking for new business and trying to go home at night. They may not realise that they are responsible for talent development and that they will really benefit from it. There is a saying that you are only as strong as your weakest link. So it follows that these keepers of the talent pipeline need to be motivated to value and invest time in talent development. They need to be a part of a workplace culture that regards it as mainstream in the day job and do a little of it every day. The senior leadership can do a lot of messaging but also lead by example and be seen to monitor and celebrate promotions and vibrant teams. Understanding the costs to the business of losing and replacing someone is key. More positively, remember that the attractiveness of someone who is developing well to a client is a terrific marketing tool (and if they go and work for the client they will return as a client)!

1. What Gets Measured Gets Done

I have not come across many organisations that actually measure individual performance in talent development and reward it, but there are some. Diversity and inclusion is often a soft, but important value rather than a performance indicator. Income generation and new business acquisition as performance indicators are easier to measure and reward. We are now working with Business Schools and firms to find ways to monitor and reward talent management and development looking at the outcomes. An obvious example is to measure the number of people who leave a manager each year and to understand the reason through exit interviews. Another is the number of promotions and lateral transfers.

1. Senior Leadership Commitment to a Concerted Culture Change

In a survey that was part of what is now the continuing Power of Diversity programme, we discovered that 84% felt that their senior leadership were doing the right thing to create diversity and inclusion but only 27% felt under any pressure to do anything about it at their level. There are clearly many good initiatives like affinity networks, unconscious bias training, mentoring and sponsorship schemes but none of them will work unless they are embedded in a big change programme involving everyone. Think of it more like a campaign, led from the top but full of excitement in the big middle that then becomes the new normal!

1. Develop Support for all Rising Talent

My motto is “Get lucky and say “yes”!” because everyone these days wants women to succeed and we will be supported. We all need support when we take on something new (however senior we are) and we can be smarter at asking for it and giving it. It is not a sign of weakness. So often, we adopt the “sink or swim” approach, “dumping“ rather than helping, in the hope that people will figure it out for themselves. The same applies to returners after a career break. We should be seeing a growing market in “returner courses”. Mentoring meetings on a regular basis are good, but what about asking for someone to go to who can give you the background or a quick second opinion on what to do next?

1. Recruit and Promote on the Basis of Intellectual Capacity and Transferable Skills, not just Experience

Is it a stereotype that, unlike men, women are reluctant to apply for jobs and promotion unless they tick all the boxes? Some people do recruit and promote square pegs to square holes based on all the “previous experience” boxes. I have always hired on the basis of intellectual capacity, motivation and transferable skills. I was seldom able to find people with directly relevant experience and turn them into international electricity lawyers, so an excited engineer working in South Africa who spoke Russian was a good answer! I was not taking much risk in hiring or promoting bright people with transferable skills, nor did I have to invest excessive time in supporting them. They learned very quickly, brought new ideas and make a great contribution. Women can do this too and we should not worry about moving from a square hole to a round one!