RETURNING JOY TO BANKING

I am always looking for books and articles as inspiration for my writings. Over the last twenty plus years, I have written on various books and articles that had some applicability to the banking environment. Many readers sometimes question the connection. Through The Directors’ Compass I often focused on how directors can be better directors and better humans as they lead their banks into the future. If we are able to improve the individual, we can improve the director. If we can improve the director, we can improve the board. If we improve the board, we can improve the bank. It all starts with small steps.

Over the past few years, I’ve wondered where the joy is? For many there has not been any joy. I have just recently reread, The Book of Joy: Lasting Happiness in a Changing Word, written by his Holiness the Dalai Lama and Archbishop Desmond Tutu with Douglas Carlton Abrams, Penguin Random House LLC. I encourage this read, as it provides an interesting foundation from two exceptional individuals on how to find joy in a very difficult and changing environment. I often reread certain books (something that the Stoics recommend). “Books remain the same,” the writer Italo Calvino stated, “but we certainly have changed, and this later encounter is therefore completely new.” The poet Heraclitus also said, “no man ever steps in the same river twice, for it is not the same river and he is not the same man.”

In fact, when most bankers think about the banking industry over the last decade, they see there has not been a lot of joy, but rather significant challenges. Frankly, when I look back at the last decade, I think there are number of things to be joyful about. There are also a number of opportunities that are present that can continue to bring joy in the future.

Many readers are probably wondering, why talk about joy? What does that mean to the bank? Why now? My answer is simply, why not now? Why shouldn’t what a bank does and what bankers do for their community, customers, staff, and others produce positive feelings and joy? In a time when many banks are vilified, and bankers have been pushed hard by the regulators and the world, is there some way to find joy in what we do and how we relate to others? For those banks that want to be around for a long period of time and truly make a difference to all of their partners, they must be able to find joy in what they do and how they relate to others. If you cannot find a level of joy in banking -- then why do it? Those who cannot find the joy of banking are short-term players at best. In this first reflection, I will be writing about finding joy within banking.

In The Book of Joy, the Archbishop and the Dalai Lama discussed what joy is, how we find joy through the various pillars to joy, and what the obstacles to joy are.

What is Joy?

In The Book of Joy, the authors note that various different emotions and feelings are identified with joy, which include: pleasure (of the five senses); amusement (from a chuckle to a belly laugh); contentment (a calmer kind of satisfaction); excitement (in response to novelty or challenge); relief (following on another emotion such as fear or anxiety or even pleasure); wonder (before something astonishing and admirable); ecstasy or bliss (transporting us outside ourselves); exultation (at having accomplished something difficult); radiant pride (when our children earn a special honor); unhealthy jubilation (relishing in someone else’s suffering); elevation (from having witnessed an act of kindness, generosity or compassion); gratitude (the appreciation of a selfless act of which one is the beneficiary); rejoicing (in someone else’s happiness); delight or enhancement (a shining kind of contentment); and spiritual radiance (a serene joy born from deep well-being and benevolence). The emphasis is that joy certainly does not embrace all of these human experiences, but lasting joy -- joy as a way of being - - is, for the Dalai Lama and the Archbishop, probably closest to the contentment of a calmer side of satisfaction or the spiritual radiance born from deep well-being and benevolence.

The purpose of The Book of Joy is to explore joy and what makes human experience satisfying. Both the Archbishop and the Dalai Lama emphasize that joy is something different from happiness. Their focus is ultimately the greatest joy is found when we seek to do good for others. We have long emphasized to directors that when you take actions based upon individual goals, it may bring shortterm happiness. But when you take action that brings happiness or does something for the benefit of all of the partners that touch your bank, whether the shareholders, other directors, management, customers, community, regulators, or vendors, that brings a concept of balance and true joy for the bank on a consistent basis.

In 2015, I wrote about The Little Book of Clarity, by Jamie Smart and the concept of “Toxic Goals versus Authentic Desires.” Jamie Smart defines the two as follows.

“Toxic goals diminish a person’s quality of life from the moment they set them. They reinforce the outside-in misunderstanding and encourage people to exchange a rich experience of the present moment for contaminated thinking; an idealized future concept.” We have seen too many bankers state, “if I can only make a certain ROAA or ROAE, then I will be happy and joyful. If only I can land this account or get this bonus, then I will be happy.” These types of toxic goals produce short term experiences, most often at the expense of long-term joy.

“Authentic desires are an expression of your innate clarity, wisdom and well-being. They’re part of your curiosity and fascination, things that you want for their own sake. As a result, there is no sense of angst or lack of authentic desires, not sense of striving or I’ll be happy when…. When it is an authentic desire, you know you will be fine whether you achieve it or not.” That concept was a foundation of many strategic planning meetings conducted the last several years. The foundation is being the best that you can be and really delivering a positive experience for all partners.

Obstacles to Joy

It is fascinating to understand the obstacles to joy, and how with an understanding of those

obstacles, one can push through. Some of the obstacles identified by the Archbishop and the Dalai Lama are: fear, stress and anxiety; frustration and anger; envy; and suffering and adversity. While there are more obstacles identified in The Book of Joy, these obstacles have an impact on the banking environment, and I would encourage you to think about how these obstacles have impacted your Bank’s ability to truly push through to true premier performance and lasting positive performance.

Fear, Stress, and Anxiety

The Archbishop emphasizes that we all have fears. Fears and anxiety are mechanisms that help us to survive. For most bankers and directors, we suspect that there is quite a bit of fear of the regulatory agencies. We recently became aware of a management team who sold a significant amount of performing commercial real estate loans because they were concerned about what the regulators may say in the next examination but had not really discussed it with the regulators or the board before acting. While fear is important, the problem comes when the fear is exaggerated or provoked by something that is really quite insignificant. At such time, the fear becomes an obstacle to obtaining joy.

One of the quotes from Nelson Mandela’s book, Notes to the Future, is on courage. “I learned that courage was not the absence of fear, but the triumph over it. I felt fear more times than I could remember, but I hid it behind a mask of boldness. The brave man is not he who does not feel afraid, but he who conquers that fear.” Archbishop Tutu also emphasized that “courage is not the absence of fear, but the ability to act in spite of it.” One of the basic principles of The Findley Companies is the concept of “Loyalty, Courage, and Honor.” We have long stated that courage is not the lack of fear -- but the ability to push through the fear with an open heart, open mind, and dedication to the bank and others.

When we think about the last several years, we recognize that a number of decisions were based on a perception of fear when the regulatory action was quite insignificant. If we base our decisions on fear, then are we really in control of the bank?

The Dalai Lama continues to discuss what often comes from fear, “stress and anxiety often come from too much expectation, and too much ambition. When you do not fulfil that expectation or achieve that ambition, we experience frustration. Right from the beginning it’s a self-centered attitude I want this and I want that - often we are not realistic about our own ability or about our objective reality. When we have a clear picture about our own capacity, we can be realistic about our effort then there is a much greater chance of achieving our goals. But unrealistic effort only brings disaster, so in many cases our stress is caused by expectations and our ambitions.” How true that the banking industry has often set too high expectations, or not the right expectations, leading to stress and failure to perform. If we truly know our capabilities and have confidence in ourselves, then we can conquer fear, stress, and anxiety.

Dealing with stress has a lot to do with perspective. When we turn a threat into a challenge, our bodies respond very differently. Do we have the ability to look at the past ten years and the threats of the regulators and economy as opportunities? We see several bankers and banks that have taken those threats as challenges and have done spectacularly in delivering financial performance numbers. An important question is, how do you move threats to actual challenges and deal with them accordingly? If you can change the perspective, then you can eliminate an obstacle.

Frustration and Anger

The Dalai Lama emphasizes that while fear and anger are two quite separate emotions, “where there is fear - frustration will come. Frustration brings anger - so you see the connection between fear and anger are very close. Typically, frustration and anger come from being hurt. We want something that we did not get, like respect or kindness. Or we get something that we did not want, like disrespect or criticism.” Underlying this anger, the Dalai Lama is saying, is a fear that we will not get what we need, that we are not loved, that we are not respected, that we will not be included, that we do not belong. Psychologists often call anger a secondary emotion, because it comes as a defense to feeling threatened. When we acknowledge and express fear and how we are feeling threatened, then we are often able to sooth the anger. But we also need to admit our vulnerability. Since most people are ashamed of fears, if we can have compassion for ourselves and acknowledge how we feel afraid, hurt, or threatened, we can have compassion for others, possibly even for those who provoke our anger. An interesting question for bankers and directors is, how often do the actions of others lead to frustration or anger? It is important sometimes to just understand where those actions were coming from and why. It’s also important not to act out of anger, but rather to act out of understanding. The most successful strategic plans are not reactive,

but rather proactive. They are well thought out and based upon understanding the expectations and interests of all the partners that touch your bank. These plans are most often inclusive, where they bring the partners in and make them part of the process.

Envy

Envy often comes from too much comparison, but comparison is indeed a human element. Envy can become a source of great satisfaction. The Dalai Lama emphasizes that “envy is often an upward comparison. We find that upward comparisons are particularly corrosive to our well-being.” Envy doesn’t have room for joy, and coveting what others have is not the right approach. Rather, maximizing what you and your bank have though your efforts is the right approach. The Archbishop emphasizes that a powerful remedy for envy is gratitude. “I think that one of the best ways you can begin to counter it is the old one of counting your blessings.” It raises an interesting question for boards and managements: do we often count our blessings, or do we continue with upward comparisons? How much is enough?

There’s also an effective remedy for envy from the Archbishop, which is based upon the concept of reframing. “The very best is being able to ask yourself - why do I want to have a house that has seven rooms when there are only two or three of us - why do I want to have it? … How much is enough?”

We have long emphasized in our strategic planning meetings not to take every dime off the table but rather reinvest in the future and in your partners. Those banks that believe that they must maximize performance in the short term in order to compare to another bank often have problems in the long term. That is what we have referred to as a toxic goal which does not bring joy. Both the Archbishop and the Dalai Lama emphasize that envy comes because we are too focused on material possessions and not on our true inner values. “When we focus on experience or knowledge there is much less envy, but most important is to develop a sense of concern for other well-being. If you have a general kindness or compassion, then when someone gets something or has more success - you are able to rejoice in their good fortune.” How often do we really appreciate what others have been able to accomplish and learn from their experiences, rather than show envy? While we often compare ourselves to others as a measure of success, maybe the real question is how well are we doing as it relates to our own potential and expectations? Often, we tell boards that the market value of their stock is not an indication of success, since it is too volatile and is often tied to the sale of a few hundred shares. Rather, look at what is being done to build true value within their bank through core earnings a respectable ROAA and ROAE and what really makes a difference to customers, community, staff, and shareholders. We are best comparing ourselves to our own potential and not others.

Suffering and Adversity

Suffering and adversity often become obstacles to achieving joy. Both the Archbishop and Dalai Lama emphasize even a tragic situation can become an opportunity, and it’s possible to experience joy even at times of suffering and adversity. Both the Archbishop and Dalia Lama talk about their past experiences with regard to an apartheid or exile. What is fascinating is that, even though both of these individuals had significant adversity and suffering, they could find joy, “not just a case of in spite of their adversity, but because of their adversity they have found joy.” Possibly those experiences of suffering and adversity can also be perceived as challenges and opportunities to learn and create new experiences for all of our partners going forward. Suffering and adversity are also the basis on which we develop compassion and understanding of the expectations of all the partners of the bank. Thinking about how what we have been through the last ten years in the banking industry and in our lives has been able to shape our experiences both now and in the future.

This reflection is about the obstacles to obtaining joy. In the next two reflections, I’ll write about the eight pillars upon which we can find ongoing joy, both as individuals and as leaders of our banks. These eight pillars are broken into two categories: Mind, the pillars of perspective, humility, humor, and acceptance; and Heart, the pillars of forgiveness, gratitude, compassion, and generosity. We encourage you to read The Book of Joy. Although this is a reread, there are definitely life lessons that can help shape the direction of you and your bank. I often find that the individual items that we often discuss help frame the recommendations for the best course of action, as well as set the guiding principles for action for our banking clientele. Next month, we begin looking at the eight pillars of joy and how to move into a much more joyful experience in our banking environment. We need more joy!

-Gary Steven Findley, Editor