Tom Hanks, Mortgage Lending and Canned Fish….Dick Jenkins CEO @BathBuildingSoc

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I don’t think that Tom Hanks ever made a bad film. Thinking back over his classics, Apollo 13, Forrest Gump, Cast Away, Toy Story (As Woody), Catch Me If You Can and Saving Private Ryan he’s had a string of hits that incline me to go and watch his movies on spec, even if I’ve seen no reviews. I even think he made a good job of the Da Vinci Code and in recent years he’s made a particular favourite of mine, Saving Mr Banks. He’s one of a small list of actors and actresses (I’d also include Julia Roberts and Meryl Streep in my shortlist) of “bankers” whose movies you can rely on.

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That said. I bet that over the years he’s been pitched with propositions that have been real clunkers. That happens to all actors as scriptwriters; good and bad, imagine he’d be the ideal person to play their male lead. Whilst I wouldn’t doubt that Hanks is a brilliant actor, there are many others who have done excellent work who haven’t notched up his series of hits.

I think his secret may come in being picky about what he does. His reputation, I would suggest, owes as much as to the movies he politely turned down as to the ones he made.

Which makes me wonder whether we are all limited by our ability to say “no”. I know for a fact that I say “yes” far too easily to things that I don’t really want to do for fear of offending people or hurting their feelings. And in doing so I convince myself that I’m a kind-hearted person, prepared to put myself out for others.

But in the world of mortgage lending you just have to be hard-headed. An excellent loan book is all about saying “no” to the ones which will cause problems, and the margins for error are pretty slim.

In mortgage lending if you get more than about 1% of your underwriting decisions wrong, things start getting difficult. Get up to 5% wrong and you’re in very deep trouble.

It may sound very politically incorrect in this liberal era, but the ability to discriminate is a vital part of doing business. Not obviously on the grounds of race, religion, gender, age disability or sexual orientation. In our case, we discriminate against those who, understandably enough do not have a proven track record of paying their mortgage. But in all businesses you have to screen out (i.e. discriminate against) people you can’t trust or people who can’t perform in the way that you expect them to. Every choice or business decision involves saying “yes” to somebody and “no” to somebody else.

It does of course get very interesting; ethically, when a business’ need to discriminate comes up against some form of socially unacceptable discrimination. This has recently been a live issue in the car insurance market where insurers’ practice of loading premiums for men (because statistically they have more accidents than women) was outlawed in 2012 by the EU who ruled in favour of unisex pricing (which, arguably, discriminates against women). It turns out that five years on, men still pay more for their car insurance, but now this appears to be justified by the swankier cars they tend to drive or the riskier occupations they tend to have, rather than simply the fact they are male.

So being picky is a good trait in building an acting career and a good trait in business. As people of a certain age (i.e. my age) will remember from the TV ads “It’s the fish that John West reject that makes John West the best”. How true.

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