BGN Entrepreneur

The modern organization has no boundaries. Organizations are ecosystems of human assets: employees, managers, customers, suppliers and the community.
How well these human assets perform will depend on both their individual capabilities and their ability to work together in pursuit of their shared mission. Analysis demonstrates how this caused the near collapse of the banking industry:
1. Employee incentives prioritized short-term profits and bonuses.
2. Management placed too much faith in financial risk management and complex mathematical models.
3. Banks did not pay sufficient attention to the financial security of their customers.
4. Small banks were suppliers of ‘no income, no job’ loans for securitization.
5. Rating agencies were less-than=credible suppliers of financial information.
6. Some institutions generally failed in terms of their responsibility to the community.

In each case, human assets were diminished by an absence of the right values. Poor values resulted in poor human assets that, in turn, resulted in poor performance.
Values are integral to the economic sustainability and performance of organizations. The travails of Citigroup indicate why it is important to ensure that an organization’s values encompass every single aspect of its business.

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