Banks Have Arrived At A Gazpacho Moment

A few years ago, I went to a reunion of my Cass Business School MBA class. Immediately on seeing me, one of my former classmates started laughing. I was, of course, puzzled and asked him what was so funny. He apologized for his outburst but confessed that, in the past several years, he had, on several different occasions, taken great pleasure in telling some of his friends a joke about me.

I will share that joke with you.

It was 1992 and after the blood, sweat, and tears, our MBA was finally over, and we were having our graduation dinner at the very, very classy Ritz Hotel in London. It was of course, a black-tie affair. My memory is slightly hazy, as this was almost twenty years ago now, but I do remember that there was some delay, and by the time the food was served, I was feeling really hungry.

It so happened that we had a set menu and first up was gazpacho—cold tomato soup. I honestly didn’t think that my stomach was up to having cold soup at that point in time, given how hungry I was, and therefore, I politely asked the waiter if there was a warm alternative.

“No,” came the curt reply, at which time I was also reminded that it was a set menu.

I accepted the waiter’s reasoning and then calmly asked him to warm up my gazpacho.

Now if you were a waiter working in one of the finest establishments in London, if not the world, and a black man with a Jamaican accent told you what you needed to do with your gazpacho, you would not be pleased—if you catch my drift.

To say the very least, the waiter was perplexed; but it is more likely that he was horrified. I could tell with absolute certainty that never before in the history of such an elegant and august establishment had anyone made, what would have been in his mind, such a heathen request. This no doubt accounts for the fact that, while he did maintain his composure, he quietly suggested to me that gazpacho is a cold dish and that is how it was always served.

I was equally adamant. Yes, I had had gazpacho before and I knew what it was, but in my culture, when one was as hungry, as I was at the time, cold tomato soup or any cold soup for that matter was a definite no-no. I insisted that he take my gazpacho back to the kitchen and have it warmed up.

The waiter departed in a huff. Yet, I can confirm that warm gazpacho is quite okay, and on that particular occasion, it hit the spot that I needed it to.

As we reminisced and laughed, I assured my former classmate that he had my permission to tell this joke as often as he wished.

Okay, my Gazpacho Moment was neither awe-inspiring nor earth-shattering. However, that is not really the point. The real issue here is one of character and attitude—the willingness to be unafraid and to disregard or put aside the conventional when the conventional is no longer fit for purpose.

A Gazpacho Moment is having the passion and belief necessary to make a fundamental change when it is clear that the conventional is no longer valid.

This was what Henry Ford did when he introduced the moving assembly line and resolved to double the wages of his workers, despite criticisms and predictions in the press that he was sure to go bankrupt. Nevertheless, Henry Ford and the Ford Motor Company went on to become one of the single most important organizations in the history of modern industry, as Ford gave birth to the era of mass production.

Similarly, the founders of a struggling motor company in devastated post-war Japan faced a Gazpacho Moment. When Eiji Toyoda and Taichi Ohno visited Detroit, they did so with the hope and expectation that they would learn from the much vaunted mass production techniques of America, which at that time was known as the Arsenal of Democracy—the same Arsenal of Democracy that had played the leading role in overcoming both Japan and Germany in World War II. However, they were singularly unimpressed; they thought what they saw was too costly and too wasteful.

Toyota turned away from mass production and went on to invent what they called the Toyota Production System, known throughout the world as Lean Production or, as James P. Womack, Daniel T. Jones, and Daniel Roos called it in their 1991 book of the same name, The Machine That Changed The World.

It was the kind of moment faced by Bill Gates and Microsoft some twenty or more years ago. Microsoft had leveraged its relationship with IBM to dominate the market for desktop computers. However, when Gates realized that Microsoft could not share IBM’s vision of the future (IBM wanted OS2; Microsoft wanted Windows), he decided to part company with IBM, and Microsoft set off on its own.

That is the position in which bankers find themselves right at this very moment. They are faced with a situation where they know the same old same old is not going to work. However, they have not yet determined how they should make a fundamental break with the old approach. If the cycle of failure is to end, then they will have to.

Banks and bankers have arrived at their Gazpacho Moment.

The above is an extract from the book Clearing The Bull, The Financial Crisis And Why Banks Need A Human Transformation (iUniverse) by Jonathan Ledwidge

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