The Optimist Fails First

Saint Louis Bank CEO, Travis Liebig discusses the PPP program being distributed through the SBA system. We discuss the challenges for getting these loans distributed, how he is directing his employees to work with their customers and what will happen if the program runs out of money. In full disclosure: I am on the Board of Directors for Saint Louis Bank and Travis and I are long time friends. Checkout the full interview here.

VC: So Travis you’re at the helm of St. Louis bank and you’ve already said that the path to hell is paved with good intentions — How are you talking with your employees and what are you talking with them about?

TL: We’re headed into a dark place; I think you need to shoot people straight and let them just acknowledge what it is. Yesterday we had our weekly All Hands call and remember, everybody’s working remotely so we can’t just jump into a room and have these conversations. My biggest concern outside of this program was you know — are my people okay? — You know they’re sitting at home, there’s that isolation and they’re not part of this team environment so that coupled with cranking this thing up tenfold and they don’t have anybody to confide in or lean on at the office much less what is going on in their world so we talked about something and I think a lot of your listeners and most business people at one point in their time read the book good to great and inside of that book which is a great book by Mr. Collins, there was something in there that he talked about called the Stockdale paradox.

The Stockdale paradox is named after Admiral Stockdale who was shot down in Vietnam and was held in a Vietnam prison camp for eight years and abused repeatedly. He had no reason to believe that he was ever going to get out of it, he was there with other prisoners of war and he came out and really was able to share that story of how he survived and it was really about that mental toughness — what are you doing in your mind during the tough times but part of what he pointed out and I’m a very positive and optimistic person you know that but what he talked about in there was when he was asked who didn’t fare well, who didn’t make it out of the prison camps, his comment was the optimist.

“The optimist went first and failed first. They didn’t make it.”

They died of a broken heart because they would be in the camp and they would say alright we’re going to be out of here by Christmas and then Christmas would roll around and then okay we’re going to be out of here by Easter and then Easter would roll around then it was we’re going to be out by Thanksgiving, Thanksgiving rolls around and that process continued and continued and what they failed to do was face and confront the reality of the situation. So Stockdale was the guy that just basically said hey look — you’ve got to have that positive attitude but what you can’t do is lose sight of reality and can face those worst problems that are in front of you right now.

We can’t lose the faith to prevail but the discipline to confront the most brutal facts of your current reality whatever they might be and that sounds drab but I think from the standpoint of what happened with the optimist, they failed to confront the reality of the situation and kind of took the ostrich approach and put the head in the sand. This will pass and we’ll all be fine, but that self-delusion is not how you’re going to get out of this and it’s not going to make it easier. It might make it easier in the short term, but the long term is where I think the rubber meets the road so it’s the balance of both of those items that matters.

VC: I was just talking with my wife this morning about how we really had a good balance going. I took this to the extreme of we need to get prepared ‘go go go’ and she is just like we are going to face whatever comes every single day. Today’s a new day, new information, we’re going to just deal with that and you need to have both of those but I think you’re probably right that the optimists here that are too optimistic and looking for every single sign of hope and when they get it — grab on to it and it doesn’t work out — you start having problems. I think maybe the other side of it is if you are preparing for the absolute worst and you’re getting yourself ready for it you don’t want to be in the position where you’re hoping things burn down. You fill up the freezer, you get a bunch of supplies, you’re prepared then you don’t want to be hoping that everything burns down so that you were right. That’s a bad situation to be into but I really appreciate your Stockdale idea.

TL: I think just to kind of wrap that up, you know Stockdale knew he was in hell and he knew that that wasn’t going to change but he also knew that he would prevail. Later he was asked about that whole experience and he said it was the greatest moment of his life in that it changed the trajectory of his life and who he was. He wouldn’t have traded it for the world so when we were talking to the team yesterday it was just call a spade a spade –

“We know this is a tough situation but we’re a community bank and we always say that we’re here to help the business owners in the community that need us.”

Here’s your chance because they need you now more than ever and you know it will be painful and it may feel like hell but when we come through this we’re going to have helped so many businesses when they needed us more than ever that it will forever change the trajectory of this bank because we were the ones that stepped up and got it done versus the ones that said it’s too much work, we’re not going to do it or made excuses on why it’s not possible. We put people in places to make sure that this was possible. It won’t be a well-oiled machine but it’s getting smoother and faster every single day. I have no concerns that were not going to be able to serve the businesses that have asked us to serve and you know we probably have 10 times the number of businesses that we would normally help with a loan over the course of the year that we’re going to help them within a month so we’re funding loans today we’ve approved close to 20 million dollars of these transactions already. Our goal is to every single day keep getting better and faster and then you know you don’t just stop there you keep finding ways to get faster and better along the way.

Let’s keep the conversation going,

Vance

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