Tipping point at the Northern Rock

by Viv on September 18, 2007

In marketing and change management courses, I have found the tipping point concept (Gladwell) really useful to illustrate how small changes can cause a big effect.
Gladwell’s book is unashamedly US focused. but now we have just lived through a great UK example – Northern Rock.

On Friday as the NR shares plummeted it was still perfectly rational for me and other savers to leave our savings with them. By Monday, inspired by TV pictures of lines of people, it was rational for everyone to take their money out. Only the prospect of a two hour queue prevented me from joining the stampede. That evening peace broke out following the Chancellor’s announcement that the government would guarantee the savings.

This episode shows how people trust the judgment of their peers whilst the pronouncements of those with a vested interest e.g. NR’s beleaguered chief exec get ignored. Once enough people had decided that¬†they would probably¬†get their money back, the tipping point had been reached.

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