For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 3: Chase opportunities relentlessly and don’t die until death comes to you

the souq must go on. The souq is an outdoor market mentioned in the bible that has been operating for generations. When an operation exists for generations it has gone through every economic up and down the world has endeavored or the souq must go on. There are lessons in how merchants treat customers.

Mr. Roumani worked for a bank. In times of crisis, people want their money back. When more and more people have access to internet banking, it will change how they do it, but a decade ago, most people went to the bank. What should BBSF do? Similar to all banks, there is a desire to avoid a rush to withdraw funds, partly because banks cash is used in loans, there is not a 100% cash deposits in the bank, it is typically less than 5%. What to do? limit withdraws? raise the deposit rate? BBSF decided to stack banknotes next to the glass counters so everyone could see they had enough money. For any client to withdraw 1 million Syrian pounds, they could. The approach, BBSF said was we understood the motives, they are same as ours, but after withdrawing the funds, we made sure to say if and when you feel safer, you can deposit back anytime.

We learned that that to put the customers at the forefront of everything was fundamental to us. After that it was easier to search for opportunities. An opportunity was in many countries, there are people working outside of the country, but send money back to their families. In conflicts, the price of real estate falls because of lack of demand. However, those working outside the country may be able to afford the mortgages because prices have decreased and they want to invest in the country. BBSF offered housing loans and some people took out loans.

In most businesses, there is a Pareto rule which states that roughly 80% of the effects stem from 20% of the causes. Transferring this principle to customers, 20% of your clients would give you 80% of your revenue.  

In adverse times, the rule changes to 95/5 or 5% of your clients would generate 95% of your revenue. 

This implies you have to know which ones are successful and be flexible with your pricing to keep them satisfied in the short-term knowing in the long term the benefit of a long-term strategic partnership is possible.  

In addition to maintaining profitable customers, you need the right information systems that will enable you to break down accurately the profitability per channel, platform and customer.  

Linking to dividend paying stocks, there is opportunities somewhere and with the recurring dividends you have the ability to search and locate the opportunities. Once you see them, the world is better.  

There are more questions than answers, till the next time – to raising questions.