Moshe’s Blog

Overlooked Fundamentals That Lead Businesses like SVB into Collapse: Three Steps to Avoid The Same Mistakes

Two Traps That Cause Failures Like SVB

“If we really maintain enough of a financial cushion to withstand a crisis, we’ll lose out on investment opportunities that would make us all more money. No need for that, we’ll be fine.” This is the seductive rationale I imagine the executives of the recently collapsed Silicon Valley Bank (SVB) would use with stakeholders about the bank’s investment strategy.

While explanations for failing banks like SVB abound – not enough government regulation, banks misrepresenting the risks of their investments, history of no consequences for the bailed-out bank executives – I think there are two deeper and more fundamental traps: 1) Forgetting why they’re in business. 2) Missing love (i.e. “amare” or energy that uplifts and connects).

As a leader, you are constantly faced with investment choices. If your starting point is always that your organization, like all businesses, exists to improve society and make life better for people; and that the way you do that is by being a love-powered organization, seeking to uplift and connect at every opportunity, then your decisions will always be aligned with the greatest good and your long-term success.

1. What are your core beliefs about why businesses exist?

2. What is your fundamental starting point for investment decisions?

3. How does the idea of being a love-powered business sit with you?

3 Amare Steps For Not Falling into Failure-Causing Traps

1. Make your investment decisions easier. Commit to those two business fundamentals – improving society and putting love to work – as your starting point for all investment decisions. Put it in writing, share it with your team, give examples. For more practical guidance, check out the seven Amare Way principles that are based on these fundamentals.

2. Challenge your commitments. Brainstorm with your team 5-10 likely investment scenarios (re: money, people, resources, etc.) that will challenge your organization’s commitment. Play out the whole conversation, both sides of it. Add time pressure, make it as real as possible. Close by asking what it will take to unconditionally honor your commitments.

3. Cultivate pride. Set the tone by showing how proud you are of your organization’s commitments. Call out and praise when you see others exercising those fundamental commitments in their decisions. Make alignment with those commitments part of your recruiting and people-management process.

As a leader, when you make any kind of investment decision, you always have a choice. Stick to the fundamentals of improving society and putting love to work as your guideposts and you’ll never have to rationalize or lie your way through dubious choices that may put your entire organization at risk. This is the Amare Way of highly successful and enduring love-powered leaders.

Help Create the Amare Leadership Handbook!

I’m creating a how-to handbook for love-powered leaders based on the last three years of this newsletter, and am now building a team of co-creaters and reviewers. Requirements: passion, honesty, commitment, a little time (not much). Interested? Contact me here.