There's no real info in the article. One thing I'd speculate is that if the company really has a culture of making excuses like this, that's probably a sign of the kind of cultural problems that would have led to a failure.
I've seen this a lot in government and large organizations. Most people do next to nothing, but everyone is an expert at explaining why it's not their fault, and something outside their control (usually understaffing) is to blame. It's a culture of defeat and avoidance, and the same kind of thing that would absurdly blame remote work for risk management decisions.
SVB failed because they dumped most of their liquidity into 10 year bonds before the Fed started hiking rates, essentially locking in those assets for 10 years. No company would buy a bond for next to no interest when a new bond can be had at 5% now.
They failed to diversify and that seems a top level decision that has nothing to do with WFH.
Additionally a lot of their depositors were companies with accounts well over the FDIC insurance. Arguably the werent a consumer bank and the repeal of Glass-Steagall allowed them to act like they were when it suited them, and act like an investment bank when it simiarly suited them.
Arguably this would be an example of why repealing GS was bad, from my very limited understanding.
And the whole WFH seems a red herring at best to try and avoid any actual accountability for the real decisions that led to its run and collapse.
This seems like a propaganda move to "get people back in the office" by management types. There doesn't appear to be any connection at all between remote work and the kind of malfeasance that created the conditions for SVB's failure.
Agree. I have my own opinions on WFH, especially for certain sectors and types of workers, but that is regardless of this article and totally irrelevant.
The Axios article references, but does not link to, a Financial Times report from Thursday that's pretty much the entire substance of this "blaming" of remote work. This appears to be the article in question (and should arguably be the article linked by the OP): https://www.ft.com/content/6e23a2fb-484e-418d-b309-bf558b3a6...
But there's not a single quote that backs the claim that employees blamed remote work. A professor does, and one former executive complains about training on social justice matters, but no employees are quoted mentioning anything about remote work itself. They instead complain of this:
> However, insiders complained as the bank grew at breakneck speed, its top management became inordinately focused on social issues and overly reliant on the use of expensive consultants to explore new strategies, when they should have prioritised management of the bank’s expansion and properly hedging against its interest rate risk.
> SVB hired BlackRock’s Financial Markets Advisory Group in October 2020 to analyse the potential impact of various risks on its securities portfolio. It later expanded the mandate to examine the risk systems, processes and people in its treasury department, which managed the investments.
> The January 2022 risk control report gave the bank a “gentleman’s C”, finding that SVB lagged behind similar banks on 11 of 11 factors considered and was “substantially below” them on 10 out of 11, the people said. The consultants found that SVB was unable to generate real time or even weekly updates about what was happening to its securities portfolio, the people said. SVB listened to the criticism but rebuffed offers from BlackRock to do follow up work, they added.
Remote work is in no way responsible for an entire year's worth of executive decisions to ignore such a damning report.
Please submit the original source. This blogspam mentions (but does not link to) what I believe to be this story from the FT[0].
Update: It does link to it further down in the article, instead of the perfectly-reasonable place where it first mentions it. It is this article they are referencing.
Yes, it's very clear what FT reveals about SVB, and it's not at all what Axios learned from their article:
"However, insiders complained as the bank grew at breakneck speed, its top management became inordinately focused on social issues and overly reliant on the use of expensive consultants to explore new strategies, when they should have prioritised management of the bank’s expansion and properly hedging against its interest rate risk."
And yet today's article from the NYTIMES[0] shows that the Federal Reserve was aware for more than a year that SVB was using the wrong model for risk. Despite giving the bank several warnings, they did not fix its 'vulnerabilities'.
This news just came out today, so perhaps the WFH rationale wouldn't have been given press had this been known?
Remote work is not for organizations whose management do not have clear way to measure employee objectives. In other words management has to be good at their job of tracking and measuring to be successful with remote work. If instead they are more accustomed to fear mongering and influencing then it’s not gonna work.
SVB made the fatal decision in 2021 to make a bigger-than-average bet on long-dated securities at the same time it embraced a working structure that meant its executives were scattered across the US, even while aggressively pursuing an expansion to become a full-service bank.
“It is harder to have a challenging call over Zoom. It makes it harder to challenge management,” said Nicholas Bloom, a professor at Stanford University who has studied remote working extensively. “Ideas like hedging interest rate risk often come up over lunch or in small meetings.”
My experience working at a bank during covid is that management is way more likely to fire the most competent person - who know everything about how and especially why stuff is done a certain way, who have all contacts at every level in both infra and cybersec teams, who push his team to stop working Friday afternoon to share what he knows - after he called their ideas dumb (with kinder words ofc) in person than on zoom.
I've seen this a lot in government and large organizations. Most people do next to nothing, but everyone is an expert at explaining why it's not their fault, and something outside their control (usually understaffing) is to blame. It's a culture of defeat and avoidance, and the same kind of thing that would absurdly blame remote work for risk management decisions.