The Greatest Unmanaged Risk in Fintech

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We often think about the ‘upside’ of social impact data—how it can show that an investment is doing more than a typical investment, because it generates both financial and social return.

But what about social impact data as a way to protect financial value?

This is the unique opportunity that presents itself today in fintech, an industry that is growing exponentially and that has huge potential for creating social value, but also potential to make things worse for vulnerable populations.

I wrote a piece for the Fintech Times on just this topic. Here’s the opening, click here to see the whole thing.

The global fintech market was described in a recent HBR article as investors’ “Goldilocks dream”. This is thanks to its promise of big investor returns and positive social impact. In 2021 a total of 113 new fintech “unicorns” were created. They had the potential of bringing the world’s 1.4 billion unbanked customers into the financial mainstream.

However, while financial access is increasing at a blistering pace worldwide – in Kenya 82.9 per cent of the population had access to high-quality financial services in 2019, up from 26.7 per cent in 2006 – access to digital financial products is neutral from a social impact perspective. Some products have a significant positive impact on customers’ lives. Others though, simply meet an immediate need (to make a purchase or pay off a debt). This results in people being left worse off.

(Keep reading)

 

Learning from Imperfect People

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We do it all the time. Ariana Huffington, Clayton Christensen, Nandan Nilekani, Ngozi Okonjo-Iweala…we have something important to learn from each of them.

And yet, each of them may be flawed in some (or many) ways. This doesn’t mean they have nothing to teach.

And yet, when we encounter non-famous, also flawed people, we are often quick to judge. We instinctively treat them as people we have little to learn from.

They also have a lot to teach us.

There’s something they are great at, something that comes naturally to them, something that makes them special—if we’re open to it.

If nothing else, we can learn from how we find ourselves reacting to them—having a quick mind is one thing, being quick to judgment is something else entirely (and yet they often go together).

Generosity of spirit is a better way to go through the world for so many reasons. One of these reasons is that it helps remove our blinders, allowing us to learn from the person standing right in front of us.

The one who, despite his flaws, we haven’t written off.

Walking Backwards

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One of the best ways to protect your knees, to strengthen weak hamstrings and to heal your feet is to walk backwards. By flipping our direction, we enlist our muscles, ligaments, tendons, and nerves in new ways: our hamstrings are suddenly in charge, our anterior tibialis plays the supporting role our calves normally play, our glutes take on more work, and our feet and fronts of our ankles have to find stability with a new set of inputs.

Other than a new form of physical therapy that you can do on the treadmill (our outside—be careful!) we can take some lessons from this flip in orientation.

Some of our most important work is done in teams, and these groupings are like our muscles. Every time a group comes together, we take our familiar roles: a person who speaks up more, and someone who likes to listen; a person who always wants to move things along, another who’s uncomfortable if every angle isn’t explored; an agenda-setter, and a bunch of agenda-takers.

A powerful choice we can make on our own is to switch our roles. If we’re a talker, we choose to listen. If we’re a “yes, but”-er, we become a “yes, and” -er, if just for a few hours. And so on.

Or you can take this a step further by explicitly setting new roles for your team for a meeting (or longer): consciously ask a new person to set the agenda; have the person who always sees the flaw or the risk play the role of pushing things a step further. Ask the big talkers to sit still and be quiet.

The first benefit of this is to identify everyone’s tendencies, as perceived by everyone else. You are then able to ask when playing your expected role helps the group, and when your influence is limited because “that’s what he always says.”

As important, doing this as a group builds new interpersonal muscles. A person who’s never set the agenda out loud says “this is what I think we need to talk about.” A talker has to stop thinking about the next thing he’s going to say and, instead, just listens. A person who always pushes the group forward has to verbalize the risks. And on and on.

All of this will serve as a valuable exercise in both empathy and group dynamics. It’s also a reminder that being a one-note team member minimizes your effectiveness, and it hamstrings (ha!) the groups that you’re part of.

Can Can’t Will Won’t and 3-D Management

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In Danny Meyer’s interview on the Tim Ferris podcast, Danny shares the world’s simplest 2×2 for how to think about who on your team to invest in, and how much of your time and energy to give them.

The CAN / CAN’T describes the person’s skill. The WILL / WON’T describes their will.

This gives us a shortcut to understand the people on our teams, those who:

  • CAN and WILL: highly skilled and highly motivated. Your top performers today.
  • CAN’T and WILL: people who don’t have the skills but are highly motivated to learn them.
  • CAN and WON’T: people who have the skills but are unmotivated / have a bad attitude.
  • CAN’T and WON’T: people who have neither the skills nor the will.

How to Spend Your Time?

The first question Danny poses is: how should you spend your time as a supervisor? His answer (which I agree with) is that he has the most time for the people on the top half of the chart, those who:

  • CAN’T but WILL: people who are super-motivated to learn, but just don’t have the specific skills today. It’s hard to teach motivation, dedication, professionalism and pride; it’s much easier to teach skills.
  • CAN and WILL. In some ways it’s easy to just “leave these people alone” because they’re crushing their jobs, but this is exactly the wrong thing to do. Give them attention, praise them, nurture them, both for the impact this has on them directly and because of the positive multiplier effects this will have on your culture.

Then we get to the bottom part of the chart. This is where moving decisively is important, around those who:

  • CAN and WON’T: folks who have the skills but are unwilling or unmotivated. These individuals are likely a drain on your culture, though it’s easy to get tricked into thinking you need to keep them, because they are so skilled. This is a trap.
  • CAN’T and WON’T: a simple category, and where you need to move fastest. These people drag down any organization.

From 2-D to 3-D

Now, there’s the 3-D chess version of this, which is where things get really interesting.

This is another way to illustrate the concept of situational leadership, which is one of the most useful approaches to managing others with the world’s worst diagram.

Here’s my take on how to illustrate this:

The idea is that each person cannot accurately be plotted on a 2D graph of skill and will.

Instead, each job requires a collection of attributes, and each person will plot to a different point for each attribute. For example, a member of your team might show:

  • High will and skill doing analytical tasks
  • High will but low skill in drawing cross-cutting insights from those analytical tasks
  • High skill but low will in checking others’ work for errors
  • Low skill and low will in client relations

How to Manage in Each of the Four Quadrants

In my version of the chart, above, you would mentally plot each of these four skills—analytical tasks, insight generation, checking others’ work, and client relations—on one of the graphs, and, as a supervisor, you’d work with your team member differently on each of the tasks. The supervisor’s job is to be:

  • DIRECTIVE for low skill, low will tasks
  • COACHING for low skill, high will tasks
  • SUPPORTING for high skill, low will tasks
  • DELEGATING for high skill, high will tasks

This is what’s explained in the terrible (but useful) standard illustration of situational leadership. Each quadrant describes three things: the employees’ skill, her will, and her bosses’ desired behavior when working with her on a task in each of the four quadrants.

Pulling it All Together

Our job, then, is to have a mental model of how we think about the skill and will of our employees and use that to determine, in the broadest sense, who to invest in and how much time to give them. This is what Danny Meyer is talking about, starting in minute 50 of the podcast.

And, at a more granular level, both employees and their supervisors have a nuanced job to do as they show up to work each day:  diagnosing different requirements of the job across skill and will; communicating this diagnosis to one another; and then using that mapping to partner differently in support of the execution of tasks and the development of these various skills.

It becomes clear pretty quickly—especially as we think about this over time—what a gross simplification it is to talk about “good” and “bad” employees; or to talk about whether it’s better to be a “hands on” supervisor or one who “gives lots of freedom.”

The reality is that people are a collection of attitudes and abilities for different things: we might love sitting in front of a spreadsheet and hate managing teams; love building relationships and hate writing a budget. Our skills, our willingness to deploy these skills, and the collection of skills that make up our jobs is constantly evolving.

The one constant that bridges people through all of this evolution—from one role to the next and to the next; from one set of skills to the next and to the next—is the willingness to keep on doing one’s best and to continually learn.

And the best bosses are the ones who realize that there’s no one-size-fits-all approach to management, just as there’s no team member who has mastered all the skills she could possibly learn.

The Oldest You’ve Ever Been

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Is how old you are right at this moment, of course.

It’s likely you are also the wisest you’ve ever been, and the most experienced.

But what about the strongest, the most durable, the most resilient, the most courageous?

So much of how we experience today comes from the stories we tell ourselves.

Be careful not to talk yourself out of your potential

Why We Need to See One Another

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Last week I had the chance to hang out with Trevor Noah at the Mastercard Inclusive Growth Summit (OK, we were in the same room, but that still counts, right? You can find Trevor at 1:37 in the video)?

The Summit was an amazing few days, though I admit that, at first, I found it more tiring than expected.

My recent experience with conferences feels like a post-pandemic reverberation: we’re returning to (more) normal professional routines (including time in the office and in-person gatherings), but these routines feel new enough that (a) They’re more tiring than they used to be; and (b) We can look at them with fresh eyes. This caused me to ask myself:

What is the purpose of seeing professional contacts in person?

More specifically: we’ve managed to build strong new relationships over nearly three years of a global pandemic. Might it be that all the social niceties were just a distraction? That we can get business done just fine, thank you very much, without ever meeting in person?

To me, the answer to these questions is both “yes” and “no.”

Yes, we can absolutely get much more done remotely than we thought.

Now that we’re less bounded by outdated norms, we can close new clients, raise capital, and build new, meaningful partnerships without ever getting on a plane. This is more efficient for everyone involved, and I’m surprised that more isn’t written about the positive social dividends of tens of millions of people working from home.

In fact, this all works just well enough that we could be forgiven for thinking that nothing of value happens in person. That, also, is a mistake.

We also need to invest, in person, in our most important professional relationships.

Our professional relationships are a series of interactions, leaps of faith, and surprises (both good and bad). To the extent that these relationships stay within well-grooved pathways, we can successfully manage them through a combination of Zoom, Slack and email.

But there’s a layer underneath that also must be nurtured.

It’s tempting to call this layer “trust” but that is just one outcome of being in relation with others.

Let’s unpack what it means to be in relation with others. It means we both create and discover shared experience in both present and past; develop an understanding of each others’ shared stories (both personal and professional) and common heritage. We weave together overlapping moments of identity, glimpses of one another’s motivation, and understanding the specifics of our  shared humanity. Because of how our brains are wired, these specifics are much more powerful than generalities.

All of these things tap into our basic, human sense of how we understand one another.

Now, think about what happens when something surprising occurs in one of our relationships (and nothing should surprise us any more since everything eventually happens).

One person tells the other the bad/surprising/complicated news. The other person has to figure out what to do with what they’ve just heard.

The information Person A told Person B is a tiny part of everything that’s just happened. And the question to ask is: how will Person B fill in the blanks when told this news?

Absent any relation, the answer is: randomly. The blanks will be filled in based on that person’s perspective at that moment on that day, absent any real anchor or points of reference.

But for two people in relation with each other, two people with a strong interpersonal foundation, those blanks will be filled in with shared narrative, shared experience, shared expectation, shared identity, all of which come together into what we clumsily call “trust.”

Ultimately, this feeds into the resilience of our relationships.

Because we know that curveballs are (always) coming.

The question is whether our relationships will be strong enough to withstand them.

I’m not saying it’s impossible to build resilient relationships without ever meeting in person—but it sure is harder.

Daring to Care

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One of our professional values at 60 Decibels is to “take the work personally.”

We define that as “We take pride in the work and deliver work that hits the highest standards. Anything we do reflects the best we can do.”

Because we’re a mission-driven organization, I think it’s easier for folks to take the work personally. Most of our team is here because the mission speaks to them. And, if we achieve our ambitions, the world will have changed: we will center the people who are the “beneficiaries” of social change work—whether done by nonprofits or companies, whether as customers, employees or suppliers—in the conversation about whether social change is happening. It’s rare to get the chance to be a part of something with this type of ambition.

But the idea of taking the work personally is bigger and more fundamental than any organization’s mission.

It’s a stance that we take.

A daily choice to care.

A daily choice to show up as a professional.

Which means deciding on living our own version of the U.S. Postal Services Creed, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.”  Lots of things we don’t control will go wrong. Nevertheless, we will do our jobs.

A daily choice to honor the accountability we have to our colleagues.

Because we respect them and want to see them succeed. We do our work in partnership, as part of a collective.  The work I do will either lift others up or pull them down. And this ripple effect plays out across our organizations, our clients, and the world.

Of course, this is all a lot easier to see when the people in charge remind us, when they connect the dots for us, when they help us draw a line between our role and organization’s mission and strategy.

But the connection exists either way, a direct line between:

Daring to give a damn.

The quality of what we produce.

How others feel when they interact with us.

And whether we are strengthening our culture and organization.

Every group is just a collection of its people, the stories they tell themselves and each other, and how they choose to act.

What choice will you make today?

The Most Meaningful Gift

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Is not on a birthday or anniversary or Hallmark holiday.

It’s not the one that comes with a big milestone attached, and it’s probably not the same gold watch that everyone else got.

It’s the one that comes on an otherwise unremarkable day at an unexpected moment.

The one that says, “I’ve been paying attention. I see you and I see what’s important to you and what you’re working towards. And I support it with this gift, and in so doing I support you.”

Most of us don’t need more trinkets.

But all of us carry a little fear, doubt and worry about the thing we’re striving for and may not reach.

Supporting that moment of courage and vulnerability is the most meaningful gift we can give.

Mirroring

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The best way to learn a foreign language is to mirror a native speaker. Listen, pay close attention to the sounds they make, the words they group together, and then try to match it: their phrasing, pronunciation, sounds…even the movements they make.

We are social creatures, and this sort of behavior comes naturally to us. It’s called “speech alignment,” and it’s been shown to facilitate communication and mutual understanding. Even more interesting, how much speech alignment we engage in is often a function of how much we agree or disagree with what’s being said. (We also speech align less with AI than we do with people, at least for now).

These effects can be short term (I thought a 60dB team member had an American accent in English until a heard her in a Loom video—100% Brit!!) or long term (my wife losing her Southern accent when she moved to the Northeast).

While mirroring can help us do everything from learn languages to get into verbal sync with someone, its unintended consequence can be that we amplify negative tendencies we come across in others.

As in, we:

  • Meet someone who acts socially awkward and mirror that social awkwardness, making it harder to connect
  • Come across a slow / uncommunicative (potential) client and find ourselves responding slowly / being uncommunicative
  • Match unprovoked aggression with more aggression.
  • Join a group that is consensus-oriented and start tamping down our willingness to share our opposing point of view
  • Etc.

Everywhere we go, we take in the behaviors of the people around us. It’s as natural as breathing.

And, just like we can take a moment to notice our breath (or drop our shoulders, or relax our face…try it now) we can bring our speech alignment into our consciousness.

It’s one more chance to become aware of, and take control of, our natural responses, and, if we choose, to zig when others zag.

Mikey Likes It

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One of the most successful, long-running ad campaigns of all time, was the “Mikey Likes It!” commercial for Life Cereal. It ran from 1972 to 1986.

In it, 4-year old Mikey, who “hates everything” is given a bowl of Life cereal to taste by his reluctant older brothers.

Here’s the beginning of the commercial:

Brother 1: What’s this stuff?

Brother 2: Some cereal. It’s supposed to be good for you.

Brother 1: Did you try it?

Brother 2: I’m not gonna try it. You try it!

Brother 1: I’m not gonna try it.

Brother 2: Let’s get Mikey. Yeah! He won’t eat it…he hates everything.

Mikey, of course, likes it, he really likes it.

When we’re trying to sell a new product to a group of skeptical potential customers, we’ll inevitably knock on a lot of doors and look for lots of feedback. And it’s easy to think that the feedback we’re getting, whether on the product itself or in terms of early sales, is an objective answer to the question “do you want this / does this meet your needs / do you like this?”

In reality, the search for a lot of ‘yeses’ to something truly new is often futile. When we try to get to a broad base of yeses, at the beginning, from lots of folks, we’ll likely find ourselves on a road to nowhere.

Instead, we need to find Mikey, we need to make sure that Mikey likes it, and we need to make sure that Mikey’s brothers can see that he likes it.

Who’s your Mikey?