The recent and sudden collapse of one of America$’$s best national and regional banks, Silicon Valley Bank $($SVB$),$ sent shock waves across the globe. Indeed, even a mere few weeks before its failure it was named by Forbes as one of the best banks based on its impressive growth, credit quality and profitability $($Lai$,$ V$.$ and Le$,$ H$.,2023).$ It was only the second such large bank failure in US history. So$,$ what went wrong?

Firstly, there were suggestions that inefficient risk management, lack of depositor diversification and decline in investor confidence with attributing factors $($Lai$,$ V$.$ and Le$,$ H$.2023).$ However, there were also a number of management and human resource planning issues that were also heavily cited as reasons in the mainstream media.

Former employees blamed a combination of remote work and a heavy focus on social issues for its collapse. While the banking industry generally encouraged or enforced a RTO $($full return to office$)$ post$-$COVID, SVB apparently did not. It had been reported that the continuation of hybrid work arrangements caused a lack of communication. People didn$’$t collaborate, work didn$’$t flow, and decisions weren$’$t made in a timely manner.

Employees noted that the management was spread across the country: CEO Greg Becker often worked from Hawaii, President Michael Descheneaux worked from Florida, Chief Risk Officer Laura Izurieta worked from a Washington suburb, and general counsel Mike Zuckert worked from New York $($Knox$,2023).$ Employees were apparently similarly spread out.

Also cited as a reason for the collapse was the leadership$’$s overemphasis on cultivating an $“$empathetic$”$ culture that failed to prioritize risk management. $“$I almost felt like I was at work on a college campus,$”$ another former executive said, recalling the compulsory watching of weekly $“$TED talks$”$ on social issues $($Knox$,2023).$ Additionally, other executives suggested an overemphasis on things that weren$’$t important and not enough on things that are.

The issue of $“$overengineering$”$ came up as well, with employees blaming the financing of expensive consultants on much of the bank$’$s troubles. There was a heavy emphasis on contracting out decision making, even though the company employed extremely experienced senior executives.

For many, hybrid work is a godsend. For others, hybrid work can hurt culture, connection, and collaboration. The experience of SVB serves as a cautionary tale, emphasizing that while the hybrid work model holds promise, it$’$s not devoid of potential pitfalls $($Holeiciuc$,2023).$ While some companies might not admit they have hybrid work issues, there is a growing pattern with large companies to revert back to pre$-$COVID more traditional working structures.

For example, Disney, Starbucks, Twitter and KPMG have mandated more in$-$person days, limiting hybrid possibilities $($Holeiciuc$,2023).$ We have also seen the massive media coverage of Elon Musk$’$s $‘$return to work or resign$’$ email to his employees at Tesla. However, a one$-$size$-$fits$-$all approach can be detrimental, and organizations must tailor their strategies based on their unique operational needs, corporate culture, and employee dynamics.

As per the analysis of the case study what would be the answer to these questions $-$

$1)$ what was the role of hybrid work in the collapse of the company?

$2)$ why do you believe this happened $?$

$3)$ In your capacity as the cheif executive officer, what would you have done to solve the problem?

Answer rating: 100% (QA)

Based on the information provided in the case study lets address the questions 1 What was the role of hybrid work in the collapse of the company Hybrid work which refers to a combination of remote wor... View the full answer