The financial crisis: wir haben es allen gewust

With my apologizes to our German friends for adapting this somewhat unfortunate sentence. It was used by number of German people, after the second world war, when they were asked whether they knew about the holocaust.  And their answer was: wir haben es nicht gewust. We did not know it, we were not aware of it.

With the financial crisis, of course years later now, we get a remarkable turn of that sentence.  Economists, managers, management professors all seem to have seen the crisis coming. Everybody forgot to tell so, but they all saw it.  Yesterday I read an article in the Dutch newspaper De Volskrant, written by Hans Labohm, who said that everything is to blame for the crisis, but not our liberal capitalism. Of course, according to him, the banks have played an important role.  Of course rating agencies have, and the bonus system in general has invited managers in the financial sector to take too high risks.  Then we have short selling (gambling) and securitizing, but all that, it seems, has nothing to do with our liberal capitalist rules of the game (or has it ?).  According to Labohm, the real cause is the simple bankruptcy of two major American mortgage banks.

Yesterday, I took also part in a panel of French Business Schools, in fact, to inform potential new students.  One of the students asked whether any of us had changed their programs after the crisis.  And there, one of my colleagues gave the famous: we have seen this coming, I don't understand what the problem is. We have always given courses dealing with responsible management, it are only some managers that have misused them.  No we have not.  We have all preached a short term orientation, an almost exclusive focus on the shareholder value, a very reductionist managerial style of mananagement by objectives, supported by bonusses that were only reinforcing the optimisation of each and every individual's behavior.  We did not bother about any systemic approach of the company, and/or of management; we did not bother about the stakeholder.  Of course, if we would have done so, or at least have understood it, we could have seen coming it. But we did not.  Let us be humble and indeed, maybe, avoid reinventing capitalism, but rather come up with a somewhat more systemic view on markets, countries, companies, etc. We owe this to future generations. 

For ideas, go to the readings page of this blog (in the little window, upper right corner). 

Comments

[Emmanuelle M.]

It is always so much easier and comfortable to find consistency of what happened after it did. It is easier because we have been educated to think looking back instead of analyzing and looking ahead. And it is comfortable because it makes us feel like we know and are/have been able to take control.
It reminds me of this video which was inserted in one of the post in this blog about management dogma's: Steve Job's commencement speech at Stanford graduating ceremony in 2005. It looked so easy and comfortable for him to outline the consistency of all the erratic things that happened in his life. This is all what growing old is about, I guess.

[SImon]

Now to the German "we-know-it-better" habit:

The German phrase is:
"Wir haben es alle gewußt." The Germans interviewed after WW2 did say:
"Nein, wir haben es nicht gewußt."