This week I listened to an interesting investigation into the changes in culture and practice that led to the downfall of the banks. The presenter talked about the personal relationship that he used to have with his bank manager who agreed loans for his first car and his first home. He then went on to describe how all this changed when centralisation took place, computers took over and the selling culture became king:
all staff had targets to hit in selling personal protection insurance, which turned out to be mis-sold on a massive scale, but with huge profits for the banks as the margins were so high!
There are now genuine questions about how we got to this position when the model that had worked for centuries was perfectly fit for purpose and was delivering good outcomes for the customer. We moved from a situation where customers knew and trusted their banks and local bank manager, to a situation where they have become big anonymous machines where you can’t talk to a human being, unless they are selling you something you don’t need.
The irony is that the questions about the banking crisis seem to go on in relative isolation to the changes in culture that seemed to have gripped the rest of the public and corporate sector.
I was interested to see in the weekend newspapers that SERCO is now in a favourable position to win a contract to deliver the National Citizen Service in partnership with a number of charities. Although there had been good feedback about the delivery of NCS, there were concerns that current providers were not able to scale up to deliver the contact nationally.
BUT, what is the cost of scaling up?
Big contractors like SERCO have the infrastructure to put the bid together, but will delivery improve and at what price for the charities involved? On the one hand we are told that localism is the answer, but then huge national contracts are put together risking just the same pitfalls that the banks have encountered. The little guys are likely to get squeezed to the point of extinction and once they are gone we can’t go back.
We have moved from a nuanced locally-based approach to a bland, one-size fits all where the customer has very little influence in the process and profit is the driver…. I feel a sense of deja vu.