Ernest Hemingway once said that where you start is rarely the beginning and where you finish is never the end.
That thought came to mind in looking at the recent self-inflicted travails of Deutsche Bank. When did it start coming apart at the seams?
Probably the minute it decided to could somehow run just one foot ahead of the wave of regulatory, cultural and market forces that were lined up against it.
|Jürgen Fitschen and Anshu Jain have resigned as co-CEOs at Deutsche|
Pre-crisis, the great Deutsche stood toe to toe with the now atrophying Barclays, as the European universal bank capable of competing with the Americans in the investment banking world.
And then as the world shook, the Basel boys demanded more capital, less riskier assets; the prosecutors finally woke up to Libor and the cultural force of Deutsche Inc reminded the bank that its first purpose was to support the national industrial and service machinery.
So what do you do when you find yourself like the pig being eaten one knuckle at a time?
You design a grand, sweeping strategy to convince the world you’ve woken up to the realities of the world around you.
And thus in April – with that customary German stylish-but-reserved fanfare – Deutsche brought forth Strategy 2020. And that brings us to the role of the corporate communications professionals in all this.
The comms world at Deutsche has always been a bifurcated one – with the switched-on, high-energy folks in London and New York and the more bürgermeisterly types in Frankfurt.
But whatever your mein, this was not an easy world in which to live.
Bombarded by queries of strategy, performance and Libor rigging, the comms team must have felt rather picked apart without – I assume – a lot of direction from the senior management, which was seemingly struggling itself.
|Strategy 2020 is a study in how to obfuscate and |
overwhelm reality in a way that simply didn’t add up
At times such as this, a comms person needs to go heavily into tactical mode, insisting that whatever was going out the door to press and analysts – as well as internally to the staff, who must themselves have been bewildered – be honest, cogent and logical.
I’ve been reminded myself and have reminded others that PR people are not magicians. We can’t turn chocolate into vanilla; we can’t make beautiful what is permanently disfigured.
And so when Strategy 2020 was announced, one can only assume they weren’t genuinely involved in its preparation – or if they were, their objections were dismissed or perhaps they didn’t object at all.
Why do I say that?
Because Strategy 2020 is a study in how to obfuscate and overwhelm reality in a way that simply didn’t add up.
No bank can retain its universal status, compete with the City of London and Wall Street, and serve the needs of in-country retail customers while raising its leverage ratio and shedding assets that might be considered risky, but in the end have been profitable.
You can’t grow and shrink at the same time.
The resultant press coverage from Strategy 2020 proves the point. The cynical press had a field day, but more importantly the outlets that tried to be supportive looked rather clumsy in trying to explain it all.
Tough as nails
And that brings us to Jain, who like many people at the top of his game in investment-bank land, is far more than his parts combined.
Intelligent, erudite and gracious when the mood takes him, those that work with him say he can also be incredibly aggressive, unrelenting and some would say downright tough as nails.
For Jain, Strategy 2020 was an attempt to draw a line under the problems – both regulatory and strategic in nature – and avoid a scenario similar to the downfall of Bob Diamond, only this time at the hands of the German nomenklatura.
But it didn’t work and while whole forests will fall to supply the paper needed to analyze his demise, I would suggest the answer is simple: not all Gordian knots can be untied; you can’t convince people you can fly if you don’t have wings; and under no circumstance can you damage the integrity of a bank that the German nation looks to as the bedrock financier of its economic growth.
Now here’s the weird irony at play: Jain must feel rather wounded at the moment and it’s fair to say he’s not getting any senior banking jobs in Germany anytime soon. Nonetheless, he still has a decent reside of brand equity left in the rest of the financial services industry.
At some point, big banks are going to stop cringing about the Libor-scandal; at some point big banks are going to stop trying to ‘Out Herod, Herod’ in placating the regulators. And when that happens, Jain could well be back in a top job.
That’s assuming he’s got the stomach for more of the public scrutiny that comes with it.