When my daughter was young, we had a “Magic Closet” where we put candy on Halloween night. In the morning, all that candy magically turned into a non-sugary treat, like a book or toy.
After a number of years, she asked us if the Magic Closet was really magic. So I told her the truth: It’s only real if you believe.
Unfortunately, this is true in other places in our lives. If enough people believe something is real and they act on that, it’s quite likely they can transform that belief into reality.
Take the recent banking liquidity crisis. After Silicon Valley Bank failed, several other banks were in danger of failing, too. First Republic Bank was known for offering outstanding service targeted to more affluent customers. The problem is many of those people have accounts holding more than the FDIC insured limit. When those customers began to fear for the bank’s safety, they pulled their money out, which in turn caused the exact effect they were trying to avoid. This past week, the bank was taken over by JP Morgan Chase.
Here’s the problem. When enough people take action based on fear, they feed that fear, which can spiral into a full-fledged panic. Then we’re all in a worse situation than we had before (Another bank is rumored to be in a similar situation today, so the panic continues.). Add in new AI tools that create content that might, sort of, in a way be real (or not) and that just makes things more complicated.
We can’t manage the actions of the masses, but we can control our own responses. Staying cool and calm in the midst of a potential crisis shows true leadership.
How well prepared are you to face potential crises in your industry? Will you be part of the problem or the solution? Can you separate out the fact from fiction? Or, will you be waiting for magic to come in and save you?
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