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Putting Out Fires
Over the next several days and weeks, the situation at Silicon Valley Bank will be analyzed and assessed, but the U.S. government has taken HUGE steps to keep the situation from spreading.
“The Biden administration announced Sunday night that all depositors at the failed Silicon Valley Bank would have access to all their money on Monday morning, approving an extraordinary intervention aimed at averting a crisis in the financial system.” ~ Jeff Stein, David J. Lynch, Tony Romm, & Tyler Pager, Washington Post
When there is an emergency, the primary focus should be on keeping the crisis from getting worse. If a structure is on fire, we have a fire department come put it out to keep the flames from spreading to all of the structures on the block. Yes, there will be damage and loss from that one building, but we have kept the damage contained.
As leaders, it helps to pre-think solutions to the crises we might face. Consider the business staple—the SWOT analysis. The “T” is for “Threats.”
Best case scenario: we can identify potential threats and prevent them from happening in the first place. For example, if your business requires a lot of electrical power to run computers or equipment, we can make sure we upgrade the wiring and power supply to safely handle our usage. We can have backup generators or batteries or uninterrupted power supply units where we need them. We can prevent many power losses or even an electrical fire.
But we can also plan for the things we might not be able to prevent. Large buildings have fire doors that close to limit the spread of a fire. They have marked fire exits to give people escape routes. We have insurance that covers damage from fire. So, we can make choices that limit the damage. It looks like the U.S. government made the choice to prevent accountholders from creating runs on many other banks across the country. While the cost of keeping Silicon Valley Bank’s depositors whole might be expensive, it’s MUCH less of a hit to us all than a national or global financial crisis would be.
When the building is on fire, the focus is on putting out the fire and keeping it from spreading. The focus is not on placing blame. It is not on holding responsible parties accountable. It’s not about figuring out whose fault it is. That comes later, and it is important to find out what happened and hold people accountable for their actions (or inactions) so that they don’t start more fires down the road.
But aim and use that fire extinguisher before you point fingers.
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