Sunday, March 19, 2023

Living in two worlds


MORPHEUS:  You take the blue pill... the story ends, you wake up in your bed and believe whatever you want to believe.  You take the red pill, you stay in Wonderland and I show you how deep the rabbit hole goes.

After decades in banking, I thought I'd seen everything. But last week, with a jolt to my system, I was unfortunately proven wrong. This would turn out to be one of the worst weeks in my life. I kept thinking I must be dreaming this!

I'm used to working within my banking matrix with some level of control. If I needed to help a client with something, normally I could find a way. In this circumstance, that wasn't the case. I should have taken the blue pill to wake up in bed, in control, and believing what I believed. But I took the red pill and didn't like the reality that I awoke to find.

I was inward for that one fateful Friday when the bank was taken over. All I knew was I'd lost a substantial amount of money in the bank's stock, and the FDIC had given me a 45-day contract to work for them. That will make anyone nervous. 

But the next day I grasped the truth, that this altered state of reality had impacted an ecosystem of relationships that is extended and complex - the most important of whom are our clients. This solution wouldn't be about me finding my next job. I needed to solve problems for everyone else, and my situation would sort itself out by helping others. The next day, I was blogging and engaging to open lines of dialogue.

There's been an avalanche of news and commentary about my former employer SVB. Whether true or sensationalized, none of it has been easy for the employees or clients of the Wine Division to digest and has led to confusion within the wine industry. I can tell you what caused this crash, but I'm looking for solutions today, not assigning blame.

Double vision

Finding clarity in a crisis isn't easy, but I've learned to depend on the values I've developed over decades to run my business life. For instance, when it comes to customers, I consider myself an investor and not a banker. I want to do things that are good for their business, not just loan them money and collect payments. I tell those employees I get to develop, it's about staying on the same side of the table with your customer.

Another tenet is transparency. Relationships are built on being clear. Because of that, I've tried to be as transparent as possible through this ordeal with everyone. I never want to surprise a client partner, and I ask the same in return. This situation didn't turn out that way. The wine division and our clients found out about this at the same time. 

One more value I hold: You represent your firm in your client's eyes. So acknowledge when your firm screwed up, and then do what you can to fix it. 

The saying goes, "success has many parents, but failure is an orphan." While there's nothing I could have done to change this existing outcome, it's hollow sounding to just say I'm sorry. Actions will speak louder than words over the next 6 months. I feel the responsibility to help repair this mess for clients, employees, and the industry alike. I feel I am making rapid progress.

The Matrix revealed

As this past week inched along, events started to unfold. Sunday night, the 12th of March, the FDIC announced that they were guaranteeing 100% of the deposits of SVB. This was the first sign that the string of occurrences might trend in a better path. It was reported that the FDIC was looking for a buyer for the whole bank, but the hastily put-together auction wasn't successful

The most thorough view of the train wreck phase came from Robert Joseph from Meiningers International. But at this point, I was starting to see a path ahead.

My time over the past week was split between talking to clients, responding to the press, and taking calls from various financial organizations that wanted to know if they could buy the Wine Division. 

In the space of one week, our Division Manager Jed Taborski, and I took a minimum of a dozen calls from seriously interested organizations, and we directed them to the FDIC. That tells us what we've built here has value, and that gives me confidence we will find a buyer and a solution.

The Solution

What will the solution look like? They are being pieced together in board rooms across the United States and Canada right now. 

There appears to be movement at the FDIC after this past weekend following two unsuccessful bids for the entire bank. The press is saying the bank will now be broken up. Those words sound scary, which is what the press does - look for scary words to drive traffic and views. It simply means the FDIC is now going to open the opportunity to purchase different divisions within the bank. From my chair, that is exactly what the Wine Division needs - a new owner.

Based on the incoming calls this past week, I believe there are many financial organizations that will put in a bid for the wine division as a stand-alone entity, apart from other units of the former SVB. There might be a buyer of all the bank, but I like that the FDIC is encouraging all outcomes. 

What does that mean to clients and the industry? It means we will be able to resume our focus on this business, and hopefully along with that, resume the production of thought leadership for the wine industry.


We have had such a strong level of support over the past week. I appreciate that immensely and I ask you to please continue to speak with your social media circles about your feelings regarding SVB and what we do to support the business. That is support for banks thinking about buying us.

I've never been through this before so my timing could be off, but I believe there will be an announcement of a formal solution within the next three weeks. And when that happens, I believe we will be in a better situation than we were before this crisis. 

I know this time of waiting is uncomfortable for our friends, neighbors, family, clients, vendors, spouses, and wine industry employees, but I ask you to hold fast with us for a few more weeks. Let this phase sort itself out. Your vote to support this group of industry professionals will benefit you and the entire wine ecosystem.

Thank you!!!

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