On Meltdown Monday it's Hip to be Square

Last Updated Sep 15, 2008 9:39 AM EDT

As Hurricanes Lehman and Merrill begin to batter Wall Street and beyond, it's good to reflect on a business lesson highlighted recently on Harvard Business Publishing by blogger Bill Taylor.

Businesses that stick to the basics, use common sense, and hold firm to conservative business practices are often the turtles that win the race.

He points to two lending institutions -- Hudson City Bancorp and ING Direct -- that are thriving while the subprime fiasco severely damages many of their competitors. Hudson City, for example, does little more than take in deposits, make loans to people who will live in their homes, and holds on to the mortgages rather than selling them off.

"Imagine the brilliance!" says Taylor. "Take deposits. Make sensible loans. Repeat over and over again, until your market cap approaches $10 billion."
In other words, stick to your knitting, keep it simple, keep it honest. Nothing new in this basic business advice -- except perhaps more people will be willing to listen these days. At least until the next bubble comes along.
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.