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Saturday, 8 October 2016

“The Small Club” and the macro effects of micro decisions.

One of my all-time favorite comic book artists AND writers is the Dutch legend Marten Toonder, writer of the Tom Puss and Olly B. Bumble comic series.

Next to a truly genius cartoonist with outstanding and timeless ink drawings in black and white, he was a raconteur par excellence, who painted a whole fantasy world, crowded with animals behaving like utterly human people. 
Each of these different animals had its own flaws and weaknesses and sometimes even wickedness and arrogance to offer, but also smartness, sheer kindness and love. 

The ‘winner’ in Toonder's stories was not the brightest and smartest figure (i.e. Tom Puss), but the very humane, slightly dumb and clueless, but nevertheless very goodhearted and generous Olly B. Bumble; he always stumbled upon the solution with his ‘young friend’ Puss, who on his behalf was “the puss with the plan”, as well as the “inspirator of last resort”.

In a few simple words: Bumble was the archetypical anti-hero of the story, turning hero after all, but he never realized it or boasted about it. To the contrary: he started the next story with the same ignorance, dumbness and goodheartedness as the last one, without learning anything anywhere.

Marten Toonder invented new Dutch words and expressions that became staples in the language, like ‘denkraam’ (i.e. 'window of thought'), ‘kommer en kwel’ (akin to ‘doom and gloom’), ‘Tom Poes, verzin een list’ (i.e. ‘Tom Puss, pull a trick‘ ) and many, many others. Many Dutch people use these words and expressions without knowing were they originally came from.

One of the inventions of Toonder in his books was ‘The Small Club' of Rommeldam (i.e. “Rubbleton” town), a gentlemen’s club consisting of notables from this comic city in which most Tom Puss adventures take place.

The mayor of Rommeldam, a local marquis, a few ruthless industrials and other notables of the city were members of this small gentlemen’s club of wealthy and elitist, but also clueless, arrogant and ignorant people. Oh, and of course Olly B. Bumble, who is hardly accepted and respected by his peers as a member of The Small Club, as they secretly despise him and envy him for his almost unlimited amount of money, coming from an inheritage.

A meeting of a few members of The Small Club in Olly B. Bumble's castle residence
Picture created by Marten Toonder and printed courtesy of: the Marten Toonder estate
No copyright infringement intended
Click to enlarge
I had to think strongly about ‘The Small Club’ of Rommeldam, when I read an article in an older Volkskrant newspaper from a few weeks ago, starting with this already “classic” sentence:

In a beautiful castle in Voorschoten, they talked about the ‘wealth gap’ in The Netherlands: CEO’s and other representatives of large Dutch companies, who were invited by ING Bank and Allen & Overy [i.e. a sollicitor’s office - EL]. They exchanged thoughts about the emergence of populism, the coming elections in The Netherlands (Geert Wilders) as well as The United States (Donald Trump), and the worrisome consequences of these circumstances for global free trade.

In spite of being only one paragraph in length, this snippet is a tell-tale signal about the state of “Corporate The Netherlands”. A few captains of industry and sollicitors, together strongly akin to Marten Toonder’s “Small Club”, sit together in a castle(!) to discuss the situation with respect to populism and populist politicians. The captains of industry and lawyers all fear that the populist politicians want to make an end to free and unlimited global trade without borders and boundaries: the holy grail of the early 21st Century.

To be frank: the article was very informative and there were some sound conclusions in it, about the growing wealth gap between the well and the not-so-well educated people in The Netherlands.

Duivenvoorde Castle in Voorschoten
Picture courtesy of:
Click to enlarge
Nevertheless, for me it was almost impossible to take those captains of industry and their worries serious anymore. This was due to this castle [probably Duivenvoorde Castle; see the picture above - EL] of which the hosts undoubtedly serve excellent food from leading Michelin cooks to their VIP guests. 

A place where probably loads of security people were present and where there was a near-zero chance of unwanted encounters with normal, common people, to whom the decisions of these captains of industry could have far-stretching and even devastating consequences.

The result was that – while reading the remainder of the article – I always envisioned the Small Club of Rommeldam’s notables, talking about ‘the plebiscite of their city’ from a distance, while wining and dining in their ivory towers.

I slightly forgot about this article until last Monday, when CEO Ralph Hamers of ING bank – the co-host of this very castle meeting – announced that this system bank would fire 7000 FTE’s (i.e. full time equivalents) globally. This meant that 7000 full-time bank employees or many more part-time jobs would vanish in the coming few years. Of these 7000 full-time jobs, 2300 FTE would be cut in The Netherlands and no less than 3500 in Belgium.

Slightly to my surprise, the response from the workers in the Dutch banking industry and from the involved Dutch trade unions was not much more than lukewarm (“Yes, we know... The digitization and robotization of the banking industry and the emergence of fintech are forcing the banks to take these painful measures. Consequently, this was an inevitable step that we saw coming blah blah blah...”). This lackluster reaction was probably a result of these bank employees and union workers already being shellshocked from the nearly endless series of reorganizations that went through the Dutch banking industry in the past decade and the many more reorganizations that seem to be underway within the next decade. 

However, the people in Belgium were in a state of shock and nearly ready to organize a large scale uprising against this “feudal Dutch bank”.

Please understand me properly: I have worked for many years as a tester at ICT departments in the financial industry, where most of the innovations and new developments are taking place. In those years I saw the banks morph from being companies with numerous ‘offline’, brick-and-mortar bank offices with shedloads of personnel, into nearly ‘online only’, digitized and robotized companies with only a 'skeleton crew' to keep things running and dozens of information architects and engineers to further robotize the core banking activities. 

During this time banks became companies where the battle for the highest margin became nearly synonymous to the battle for the lowest expenses, as the interest margin was not sufficient anymore to do the job alone.

Banking has remained an indispensable industry for The Netherlands and the whole world, as a matter of fact, but one in which there still is massive anger and envy among customers and the population as a whole about the ‘2008 mess-up’ that caused this global financial crisis. And an industry in which the role of the national and supranational supervisors (“Basel”) has intensified from being laid-back and even ignorant ‘supervisors from a distance’ into bloodhound-like, hands-on inspectors, who are guarding the strongly elevated thresholds for solvency, liquidity and risk-appreciation with their lives. 

These supervisors don't scare away anymore from taking the harshest of measures upon 'banks under jeopardy' that violate the Basel rules, when the situation requires that [hence: Deutsche Bank - EL]. This means that the banks have to walk on eggs these days and yet must do their utmost in order to meet the capital requirements of their shareholders and providers of funding.

And I, as no other, also understand the extent to which emerging fintech companies are threatening the classic banks in The Netherlands: fintech companies which don’t carry the financial and ICT legacy of over a century of banking activities and that can do ‘cherry-picking’ with respect to their customers, services and products.

It is so much easier to start a new online bank that only aims at the profitable customers, services and products of banking, than to strip down a classic, broad service range, brick-and-mortar bank and change it from being an indolent oil tanker into an agile, modern company with a well-balanced payment, lending and financial services package.

Therefore I am the first to understand that the regular banks need to be ‘lean and mean’ to win the battle with these new fintech companies, which have nearly unlimited resources (in some cases) and don’t carry the burden of a long past and an excessively large organization, with thousands of very expensive workers. And unfortunately enough, this means that many of the steady workers – especially the ones working in the old bank offices all over the country or with jobs that are easy to robotize – will inevitably lose their jobs and enter into a very uncertain future: a one that I know all too well. Therefore I feel very sorry for everyone of them.

Nevertheless, in spite of me understanding many of these changes within the banking industry, I hope that the bank executives will finally start to get rid of their own ivory towers; the brick-and-mortar ones, as well as the mental ones, clouding their vision and empathy towards their workers.

In order to really understand their often very loyal and understanding employees and the relatively tough times that these are going through, these executives have to abolish:

  • their ‘castle-meetings’, like the one mentioned in the Volkskrant article;
  • their occasional habit to complain about the limited height of their remuneration and the lack of variable bonuses in it, only days before they put thousands of workers on the street;
  • their separate, guarded office entrances at which they never meet their common employees unvoluntarily;
  • their normal behaviour in which they hardly speak and interact with common workers outside their inner circle, due to their mental and physical blockades against doing so;
  • their video conferences in which they can broadcast their speeches to their personnel, without being confronted in real life with the (angry) reactions to it;
  • their announcements of large job cuts made to large investors and share- and stakeholders first, instead of the people to which these announcements are applying.
And last, but not least, they have to deeply understand that all of these 7000+ workers in The Netherlands, Belgium and outside now see their sheer future at stake, without knowing what they should do in the coming months. And that is not something to think lightly upon!

If they fail to do so, these executives will be little more than the arrogant and ignorant notables of ‘Rommeldam”, which are so exquisitely described in the unforgettable books of Marten Toonder. And their workers will be little more than Rommeldam’s plebiscite, who suffer under the quirks of their ignorant bosses.

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