Telling the Covid-19 story today feels unfashionable. Too much went wrong. And yet, at the peak of the crisis, when thousands of British SMEs were thrust into emergency mode, desperately needing support from their banks, very few received it. But one bank stood apart.
One of its clients, a medical ventilator manufacturer, faced a sudden, overwhelming surge in demand. To meet it, they had to place a large order for parts. The standard banking process would have delayed this by several weeks. Instead, this bank processed it in just seven days, working late nights and weekends, at no extra charge. As a result, ventilators reached UK hospitals faster – and lives were saved.
This was no anomaly. During the 2009 financial crisis – when nearly every major UK bank pulled back from SME lending – this bank not only continued lending, it noticeably increased it. Despite holding just 1% of market share, it accounted for 50% of all new SME lending in the UK that year.
Don’t try guessing the name. It doesn’t advertise with flashy institutional campaigns, and its name doesn’t roll easily off British tongues. Many in the UK assume it’s German. It’s not. It’s originally Swedish. Its name is Handelsbanken. And since 2003, it has quietly opened over 140 branches across the UK.
Unconditional service for local communities – and for customers
Why would a bank break from the long-standing mantra of lending only to the wealthy? Some may assume this is a cleverly disguised marketing ploy by a foreign bank seeking British goodwill. That might sound plausible – until you look closer.
Handelsbanken has a long history of applying crisis-time principles in Sweden during moments of economic upheaval. This includes during the 1992 property crash, the 2009 global financial crisis and the 2019 Covid-19 pandemic. While in each case other banks turned to the state for support, Handelsbanken refused bailouts and chose not to request capital from shareholders.
As the bank’s former chief executive, Anders Bouvin, put it: “During a boom period our branch managers tend to step aside…and when the bubble bursts, which always happens, when the credit dips and the other banks go into intensive care and need support from shareholders and governments, then we take steps ahead. We should be an asset to society, not a burden on society.”
A good banker should have the same qualities as a good district nurse
The bank delivers unconditional service not only to local communities and not merely during times of crisis. Since 1973, it has consistently provided this level of service – to every customer, every day. As Jan Wallander, who led the bank as chief executive during this time, once remarked: “people’s financial situation is nearly as important as their health. A good banker should have the same sort of qualities as a good general practitioner or district nurse.”
Handelsbanken is not the only company following such an ethos. Like Darwin aboard the Beagle, we spent seven years observing the business world – studying dozens of companies of various sizes and sectors across three continents. From this fieldwork, we identified a common approach we call ‘the caring company’.
The caring company serves the members of its ecosystem – clients, suppliers and local communities – unconditionally, through its core business processes. In doing so, it enjoys exceptional long-term prosperity. But building one is anything but simple.
Building caring companies
Many bosses still view their role as simply running the company efficiently. A visiting chief executive was once touring Chaparral Steel – then considered one of America’s best workplaces – when he remarked: “I’ve always admired what you do, but I’d never do it. I feel uncomfortable with radical change. I just want to run the company.” Reflecting on that comment, Chaparral’s transformational leader, Gordon Forward, replied: “I’m comfortable with change – I love it. I don’t want to just run the company.”
The visiting CEO’s hesitation was understandable. But it prompts a broader question: in the face of today’s pressing social and environmental challenges, is just running the company really enough? And is a business that maximises profits, pays taxes and contributes socially or environmentally only when margins permit, truly fulfilling its social responsibility?
Many bosses still view their role as simply running the company efficiently
Leaders of caring companies have reached a different conclusion: that unconditional care for customers, suppliers and communities is not the government’s job, nor is it achievable through CSR, corporate philanthropy or ESG checklists. It must be a strategic and operational imperative.
This requires a fundamental rethinking of traditional business processes, which often rest on self-interested transactions. That is exactly what the CEOs we studied set out to do. They didn’t mandate transformation from the top. Instead, they invited employees to reimagine their activities so that they could care unconditionally for all members of their ecosystem.
In Handelsbanken’s case, this transformation took three years but its impact has proven enduring. In Sweden, the bank has delivered a higher return on equity than all its competitors for an unbroken span of 50 years and counting. In the UK, it has ranked first in customer satisfaction for 16 consecutive years and has been voted the preferred bank for SMEs for a number of years. It was also named the UK best private bank, a testament to how deeply this retail bank invests in the care of its customers.
Caring companies don’t just earn loyal customers, dependable suppliers and stronger community support. They also significantly outperform their peers. As paradoxical as it may sound, high profitability can be the outcome of unconditional care, a general phenomenon described by British economist, John Kay, as “obliquity.”
Taking the risk to live one life
In response to our writing and speaking on caring companies, many CEOs have voiced support. But they often ask: how do I begin such a transformation?
Our answer: There is no model. No blueprint. No one-size-fits-all approach. Every company is unique, and transformation must be co-created between the CEO and employees.
We offer only one prompt: do you want to live two lives? A personal one guided by your values and a professional one governed by financial metrics? Or do you want to live one life, where your business actions reflect your personal values? If so, what economic beliefs are you prepared to challenge?
Make no mistake this path involves risk. You may be seen as a maverick. The media might take notice. But not taking that path carries risk too: customers may remain transactional, suppliers indifferent, and communities disengaged. And without a dedicated business ecosystem, your company may never reach its full potential, and in times of crisis, may become vulnerable.
Perhaps transforming a company into a caring one is a worthy risk. One that allows it to serve the common good and to prosper economically. Perhaps it is a path more CEOs are now ready to take.
Isaac Getz is a professor at ESCP Business School and Laurent Marbacher is a senior business advisor. They are the co-authors of ‘The Caring Company: How to Shift Business and the Economy for Good’
Telling the Covid-19 story today feels unfashionable. Too much went wrong. And yet, at the peak of the crisis, when thousands of British SMEs were thrust into emergency mode, desperately needing support from their banks, very few received it. But one bank stood apart.
One of its clients, a medical ventilator manufacturer, faced a sudden, overwhelming surge in demand. To meet it, they had to place a large order for parts. The standard banking process would have delayed this by several weeks. Instead, this bank processed it in just seven days, working late nights and weekends, at no extra charge. As a result, ventilators reached UK hospitals faster – and lives were saved.
This was no anomaly. During the 2009 financial crisis – when nearly every major UK bank pulled back from SME lending – this bank not only continued lending, it noticeably increased it. Despite holding just 1% of market share, it accounted for 50% of all new SME lending in the UK that year.
