The world watched in shock as Credit Suisse, one of the most established global banking and financial services institutions, collapsed and was eventually acquired by UBS. A significant factor in Credit Suisse’s downfall was its rigid stance on forcing staff to return to the office. This cautionary tale serves as a reminder for business leaders to adapt to the changing world of work and prioritize their workforce’s needs and preferences.
The Iron Fist: Credit Suisse’s Return to the Office Policy
In stark contrast to the growing trend of many companies embracing a flexible hybrid work approach, Credit Suisse took a more traditional approach, mandating that staff return to the office three days a week. According to one banker there, “they’re removing our flexibility, and it doesn’t feel great.”
The bank’s leadership failed to recognize the fundamental shift in employee expectations and the value of flexible work arrangements. Despite several studies and real-world examples pointing to the benefits of hybrid work, Credit Suisse’s top brass remained stubbornly attached to outdated work paradigms.
By forcing staff to return to the office, Credit Suisse demonstrated a lack of empathy for its employees’ wellbeing and work-life balance. This disregard for employee needs resulted in decreased morale, heightened stress, and increased turnover rates. The bank lost talented individuals to competitors that embraced hybrid and remote work, which in turn weakened its competitive advantage.
Moreover, Credit Suisse’s decision fueled resentment among its employees, who felt their preferences and needs were being disregarded. This led to a decline in engagement and commitment, ultimately impacting the bank’s productivity and bottom line.
The Repercussions of a Stagnant Culture
Credit Suisse’s insistence on returning to the office reflects an outdated organizational culture, one that clings to traditional ways of working despite the evidence supporting the benefits of hybrid and remote work. By failing to adapt to the changing landscape of work, Credit Suisse missed out on opportunities to innovate, collaborate, and remain competitive.
This stagnant culture ultimately played a significant role in the bank’s collapse. Its inability to retain and attract top talent, coupled with the negative impact on employee morale and productivity, contributed to Credit Suisse’s weakened position in the market.
As a result of its inability to adapt to the new normal and retain top talent, Credit Suisse’s operations suffered. Its collapse had a ripple effect on the financial sector and served as a cautionary tale for other organizations. The bank’s demise was a wake-up call for leaders worldwide, emphasizing the importance of embracing change and prioritizing employee wellbeing.
UBS’s acquisition of Credit Suisse highlights the stark contrast between a company that understood the necessity of change and one that stubbornly clung to outdated practices. Consider that UBS adopted a much more flexible model of work arrangements, with some roles at the firm 100% remote, while others are a flexible hybrid modality. This approach came from a UBS survey that found 86% of its employees stated they valued more flexibility, including the ability to maintain a remote or hybrid work arrangement. UBS said that as technology enhancements and adoption of virtual work continue, it’s “finding new ways to engage with clients and build trusted relationships.” This is the kind of innovation that Credit Suisse was missing.
A Lesson in Adaptability: Embracing Hybrid Work
The collapse of Credit Suisse highlights the importance of adaptability in the ever-evolving world of work. By forcing employees to return to the office, the bank ignored the benefits of hybrid work and the shifting preferences of its workforce. As a cutting-edge expert in the field of hybrid and remote work, I have seen firsthand the advantages of embracing these work arrangements. Over the past few years, hybrid and remote work have revolutionized the way organizations function, allowing them to tap into global talent pools, reduce operational costs, and improve employee satisfaction. Companies that have successfully transitioned to hybrid or remote work have seen productivity gains and a better work-life balance for their employees.
To avoid a similar fate to Credit Suisse, business leaders must embrace the following principles:
- Acknowledge the changing landscape: The world of work has undergone a seismic shift, with employees now expecting greater flexibility.
- Embrace change: Rather than resisting new ways of working, leaders should be proactive in adapting to industry trends and exploring the benefits of hybrid and remote work. This not only ensures a competitive edge but also promotes a culture of innovation and flexibility.
- Prioritize employee wellbeing: The well-being of employees should be at the forefront of any organizational decision. Leaders must consider the impact of their decisions on employee satisfaction, work-life balance, and mental health, as these factors directly impact productivity and overall company performance.
- Communicate and engage: Transparent communication and regular engagement with employees is crucial to understanding their needs and preferences. By fostering an open dialogue, organizations can make informed decisions on work arrangements that best suit their workforce and business objectives.
- Invest in technology and infrastructure: Supporting hybrid and remote work requires a robust technological infrastructure and the right tools to ensure seamless communication and collaboration among team members. Organizations must invest in the necessary systems to facilitate this new way of working.
- Implement training and support: To help employees and managers adapt to hybrid and remote work, organizations should provide training, resources, and ongoing support. This includes educating employees on best practices for remote work and helping managers develop strategies for leading and managing hybrid teams.
- Regularly reassess and adapt: The landscape of work is constantly evolving, and organizations should continually reassess their work arrangements and policies to ensure they remain relevant and effective. By staying agile and receptive to change, businesses can maintain a competitive edge and cultivate a resilient workforce.
The Collapse of SVB vs. UBS
For readers who may be skeptical that Credit Suisse’s forced return to the office was a significant factor in the bank’s collapse, it’s worth noting the contrasting example of Silicon Valley Bank (SVB), which also collapsed. Many advocates of the return to office blamed SVB’s more flexible remote work policy for its failure due to weaker communication and collaboration.
Well, what’s good for the goose is good for the gander, right? If we blame SVB’s failure on its flexible work policy, the same logic suggests that the forced return to office is to blame for the failure of Credit Suisse. That’s especially the case considering the successful acquisition of Credit Suisse by UBS, which has embraced a more flexible hybrid work model. That contrast further underscores the significance of adaptability and responsiveness to employee preferences in today’s rapidly changing work environment. UBS has demonstrated a willingness to adapt and innovate, adopting remote and hybrid work arrangements to meet the diverse needs of its employees. This approach has allowed UBS to maintain a competitive edge and retain top talent.
In the end, work arrangements explain a part, but not the whole, of the collapse of both banks. We need to be realistic in acknowledging how work arrangements have an impact on performance and operations, but are never the whole story. Still, they are an important part of the story that deserves to be told.
The collapse of Credit Suisse serves as a stark reminder of the importance of adaptability and responsiveness in today’s business world. By embracing hybrid work and prioritizing employee well-being, organizations can avoid the pitfalls of stagnant culture and position themselves for success in the ever-changing landscape of work. Failure to adapt may not only lead to the loss of top talent and decreased productivity but can also result in more severe consequences, as seen with the demise of Credit Suisse.
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Lauded as “Office Whisperer” and “Hybrid Expert” by The New York Times, Dr. Gleb Tsipursky helps leaders use hybrid work to improve retention and productivity while cutting costs. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. Dr. Gleb wrote the first book on returning to the office and leading hybrid teams after the pandemic, his best-seller Returning to the Office and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage (Intentional Insights, 2021). He authored seven books in total, and is best know for his global bestseller, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters (Career Press, 2019). His cutting-edge thought leadership was featured in over 650 articles and 550 interviews in Harvard Business Review, Forbes, Inc. Magazine, USA Today, CBS News, Fox News, Time, Business Insider, Fortune, and elsewhere. His writing was translated into Chinese, Korean, German, Russian, Polish, Spanish, French, and other languages. His expertise comes from over 20 years of consulting, coaching, and speaking and training for Fortune 500 companies from Aflac to Xerox. It also comes from over 15 years in academia as a behavioral scientist, with 8 years as a lecturer at UNC-Chapel Hill and 7 years as a professor at Ohio State. A proud Ukrainian American, Dr. Gleb lives in Columbus, Ohio. In his free time, he makes sure to spend abundant quality time with his wife to avoid his personal life turning into a disaster. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, follow him on LinkedIn @dr-gleb-tsipursky, Twitter @gleb_tsipursky, Instagram @dr_gleb_tsipursky, Facebook @DrGlebTsipursky, Medium @dr_gleb_tsipursky, YouTube, and RSS, and get a free copy of the Assessment on Dangerous Judgment Errors in the Workplace by signing up for the free Wise Decision Maker Course at https://disasteravoidanceexperts.com/newsletter/.