On Meltdown Monday it's Hip to be Square
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.