Bank of America recently announced that it had hired writer Malcolm Gladwell, the ubiquitous New Yorker writer, and author of bestsellers
Outliers: The Story of Success, The Tipping Point: How Little Things Make a Big Difference, and Blink: The Power of Thinking Without
Thinking, to deliver a series of three speaking events aimed at small business owners. Cue much gnashing of teeth from journalists, who have long been brewing a backlash against Gladwell. His books have become business bibles for those a bit too sophisticated for Who Moved My Cheese or The Seven Habits of Highly Effective People, and Gladwell has created a whole new, highly lucrative career for himself as a corporate speaker and guru.
This success, along with criticism that, as Megan Carpentier at The Raw Story puts it, “his biggest works are more often than not distillations of other people’s research and ideas… and that they tend to almost exclusively support a consumerist, elitist philosophy,” has made Gladwell a figure of derision among some observers, and his collaboration with BofA, a much-maligned bank coming off a run of bad business decisions and clumsy PR moves -- mostly under the watch of previous chief executive Ken “Hubris” Lewis -- is seen by some ink-stained, much less successful writers as Gladwell’s own tipping point into full-blown corporate stoogedom.
BoA, who could care less about whether Gladwell is seen as a sell-out, are likely just glad for the press their move has generated. The bank, which under current CEO Brian Moynihan is still recovering from its disastrous 2008 takeover of Merrill Lynch, the subsequent $45 billion loan it had to take from the federal government and a list of other missteps, not least the recent debacle over debit card fees, is in the middle of a PR drive touting their lending record, especially to small businesses. It loaned $7.8 billion to U.S. small businesses in the first half of 2011, a 35% increase from the same period last year, according to bank spokesman Jefferson George. But, say many observers, these numbers are being heavily spun by the bank, which, along with all its major competitors, is being pressured by Washington to show more support for small businesses. Hence, heartwarming ad campaigns in California showing the owners of Pink’s Hot Dogs reminiscing over how they started their business 50 years ago with a BofA loan.
The reality on the ground is different, reports the Los Angeles Times:
'Banks are more comfortable making loans to large corporations, but many are flush with cash and may not need to borrow,’ said Bernard Baumohl, chief global economist of the Economic Outlook Group. ‘Small businesses are the ones having the most difficulty.’ […] Loans to small businesses totaled $607 billion in the three months that ended June 30, down from $609 billion the preceding three months, according to data from the Small Business Administration. In Los Angeles, banks have made 2,477 loans to small businesses so far this year; in all of 2007, they made 6,194 loans.
And BofA’s numbers are open to interpretation. The gross amount of credit Bank of America has extended to small business is up, but the net outstanding amount -- the amount of credit those businesses are actually using, and a figure some analysts feel is more reflective of reality -- is down: BoA had $17.5 billion in small business loans (including credit card lines) outstanding at the end of 2010. That number fell by 22% to $13.6 billion as of Sept. 30, 2011, according to the bank’s own regulatory filings.
Proud as Bank of America seems to be about its new celebrity partnership, Malcolm Gladwell himself appears to be slightly confused.
From the Atlantic Wire:
"This is the first I'm hearing of this press release," Gladwell told The Atlantic Wire. "I did a talk about innovation for a group of entrepreneurs in Los Angeles a while back, sponsored by Bank of America. They liked the talk, and asked me to give the same talk at two more small business events -- in Dallas and yesterday in D.C. That's the extent of it. No different from any other speaking gig. I haven't been asked to do anything else and imagine that's it."
"The speech in question was about the history of the rock band Fleetwood Mac," he added.