Serial system failures and the turn to governance (2021)

Could it call a "system problem" a "management problem"?

The core of this decision was that Mizuho took failures that could have been written off as technical defects and shouldered them as problems of management and corporate culture. To insist that the core system, into which it had poured nineteen years and $3.6B (¥400bn), held no defect, while admitting weaknesses in operation and governance and having the top step down of his own accord — this was an awkward way of taking responsibility, different in kind from confessing that a huge investment had failed. Having followed the same rut as 2002 and 2011, it located the cause not in the system but in the culture, and in that lies how far this decision was willing to go.

That said, culture does not change on command alone. The siloing bred by three banks coexisting, and the air in which no one speaks up to those above, remained even after the systems were bound back together. Some 200 remedial items and the lifting of the order stopped the recurrence for now, but whether that amounts to a mechanical fix or a change in the very quality of decision-making can only be confirmed by the next crisis. The completion of an integration is decided not by technology but by people and culture — a question twenty years in the asking, and one Mizuho still carries.