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August 24, 2012 by Steve Williams Steve Williams

Getting ‘Gemba’ In Your Blood

Since the PC revolution began 30 years ago, technology has increasingly become a dominant part of the banking business model. Today’s 2012 bank looks wildly different than a vintage 1982 institution – imagine back then a few basic ATMs and absolutely no call center, voice response system, debit cards, Internet/mobile banking, remote capture or bill pay. But how about the way the banking organization is managed?  The difference between yesterday and today is strikingly minimal. Just like 1982, banks still have a CEO, CFO, Chief Credit Officer, Retail Executive and Operations head sitting around a table looking at financial results, complaining about regulators, planning budget initiatives and contemplating mergers.  Like 1982, executives today still strive to operate at a strategic level and stay away from the “operational details.”

But here’s the rub. Value creation has shifted in our industry. These days, revenue growth and value are driven more by the delivery channels, automated processes, real-time analytics and network relationships that are undergirded with information technology. Being naïve about the operational details of the organization should no longer be a badge of honor for bank executives. As banking evolves from a traditional business to a sexy mobile and cloud-based application, design and details will matter immensely. Bank executives need to understand how they can play a role in this value creation process.

120824aSince his death in 2011, Apple CEO Steve Jobs has served as an inspiration for corporate leaders. Walter Isaacson’s brilliant biography chronicled the visionary genius and frequent jerk who “firewired together poetry and processors in a way that jolted innovation.”  Importantly, today’s banking environment requires that executives share Mr. Jobs’ obsessive focus on elegant design and customer usability. There are many famous stories about how deep Jobs would go in the product design process, including:

  • bringing a Cuisinart to a product meeting to illustrate how a Mac should look
  • demanding that no screws be visible on the iPhone
  • drawing out the actual user interface design for Apple’s first CD burning application

Contrast these examples with bank executives today who have little knowledge of their company’s Web presence or how their remote and branch-based customer experiences actually unfold. Cornerstone consultants often sit in meetings when executives are shocked to hear about the gory details of a messed-up process or delivery channel in their organization.

The striking contrast between Jobs’ management style and traditional bank approaches brings up a challenge for the future Gonzo leaders in our industry: how do I get more gritty in the details like an Apple CEO without become an annoying and ineffective micromanager?

120824bThe answer lies in a time-tested concept from the Japanese continuous improvement movement: the concept of going to “Gemba.”  In Japanese, the word “Gemba” means “the real place.” In Total Quality Management, “go to Gemba” means to go to the factory floor to truly understand and fix a problem.

 The Gemba concept recognizes the huge amount of management waste that occurs when we try to assess and plan from the executive suites with translated versions of the truth. Without needing a full-blown TQM program, today’s bank executives need to inject a bit more Gemba into their blood – to more closely feel the grit of their business and understand the details of the customer experience. In fact, top executives need to crack the whip to create this Steve-Jobs-inspired mentality in their organizations. The more banking morphs into a software application, the more Gonzo executives will need to embrace four new management mindsets for the future:

1. A Design Mindset – Banking is one of the few industries that employs virtually no designers. In the software, electronics or automobile businesses, design processes are core to value creation. In banking, we too often throw stuff on the wall and then wonder why it doesn’t get adopted or work effectively. At its core, design is about understanding a problem and finding creative, intelligent and minimalist ways to address the challenge. Today’s bank executive would benefit from studying basic design concepts and then requiring that more upfront design goes into product, process and technology initiatives in their organizations. To put it bluntly, there is too much inefficiency and too little customer loyalty in banking because there is too much bad design.

2. A Demo Mindset – Bank executives often approve a new technology investment or delivery channel enhancement only to hear later and secondhand that something has gone wrong or that an investment is struggling to generate a return.  Gonzo bankers need to take a cue from the software industry and more visibly “demo” new project deliverables at the executive level. Executives can put a healthy lump in the throat for professionals throughout the bank by requiring that brief demos be made as part of all major investments and project roll-outs. Demos are also an important way to get to the Gemba truth about controversial issues within a bank. For instance, if I.T. and Marketing are reporting they have delivered a best-in-class CRM system, and front-line Retail and Commercial executives say the tool “sucks wind” because it’s “cumbersome,” a showdown demo in the executive suites can be an efficient way to avoid two years of crushing politics within the organization. Throw the damn application on the screen for all execs to see and get to the truth quickly. Think how many product demos occur at the executive level at Apple before something hits the market. That’s not by accident.

3. A Release Mindset – Bankers are increasingly investing in remote delivery channels, work flow applications, customer relationship systems and data warehouses that are implemented progressively over many years and are never really completed. This can be frustrating to bankers, and they often lament, “We’ve been working on this for two years and I don’t know what value we’ve gained.”  Strategic investments in technology and delivery channels create the most value when they are managed and cared for year after year in a disciplined way. Otherwise, the techies or marketing team may go off on some tangent that doesn’t drive value to the business. Best practice organizations are getting more formal and serious about the specific functionality that is included in each round of remote delivery, CRM, work flow and business intelligence systems. For instance, a CIO recently communicated that referral tracking and sales reporting would be in Release 1.0 of the bank’s CRM system, with contact management and campaign management in Release 2.0 and mobile CRM in Release 3.0. This allowed management to clearly understand what capabilities to expect and the I.T. group to prioritize its efforts with limited development resources. 

4. A Power User Mindset – One of the most important roles bank executives can play today is championing the value of power users at both the employee and customer level. Today’s software and Internet companies listen to and gain energy from their power users. They demonstrate that a strong system user is not 10 percent but 100 or 200 percent more effective than the average user. In most banks today, the power user of a system is a rare occurrence, and there is no visible encouragement from the top to support the growth of these valued individuals. Instead, users who only half-heartedly try to learn a system can use vendors and I.T. as a scapegoat.

120824cThe PC is now 30 years old and the Web nearly 20 years old – it’s time to demand strong hands-on technology skills among bank managers and employees. In addition, ensuring that front-line employees can help promote and support the growth of power users among a bank’s customer base should be a high management priority. By tracking remote channel and feature adoption statistics, senior management should monitor if power users are growing in the customer base.

Bank executives today face some hairy challenges to grow revenue, improve delivery and increase efficiency. Unfortunately, many are trying to make decisions about their evolving franchises in a bubble of management reports and second-hand gossip. To keep the organization focused on what matters and to diffuse a great deal of useless politics, Gonzo leaders will make the extra effort to “go to Gemba” – to see and touch the work flows, mouse clicks and information delivery that is becoming the heart of our business. Taking this journey can be done without micromanaging, and it just might provide some fuel for a renewed interest in our evolving industry.  Think design, think release, think demo, think power user – and have fun!

120824d“Here’s to the crazy ones. The misfits. The rebels. The troublemakers.
The round pegs in square holes.”
-Apple’s famous Think Different campaign 



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2 Responses to “Getting ‘Gemba’ In Your Blood”

  1. Bonnie M says:

    Great article and so very, very true!

  2. JimB says:

    Well Said,

    It’s been a while coming, but we’re reached a tipping point. It’s no longer a savings-and-loan company with an IT department. It’s an IT company with a savings-and-loan department.

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