Mark Arnold > speaking • branding • planning

Winning Strategy: Exceed at one Thing

Is your credit union or bank still trying to be all things to all consumers? If your answer is yes, you certainly are not alone. Many Financial institutions have resisted the idea that excelling in one area of business is a wise business decision. Instead, their strategies include adding locations and developing products and services which enable them to serve the masses. There’s a theory called the Myth of Excellence which challenges that idea.

The Myth of Excellence: Why Great Companies Never Try to be the Best at Everything, written by Fred Crawford and Ryan Mathews, uses research from thousands of businesses and consumers around the world to suggest that competing in one component of business is what makes companies successful. They advocate a strategy called consumer relevancy, which advocates dominating in one element of business, differentiating in a second and being at industry par
on the rest. There are five components on which to compete – price, product, service, location and experience.

By using The Myth of Excellence approach, companies become successful because they focus on what they do best, based on what is important to their key demographic. When they can focus on the customers/members most important to their business, they can start to find opportunities they didn't realize were there. When they dominate in one area, they can direct more resources to that area and in the process, reduce operating costs, boost profitability and engage in meaningful dialogue with consumers. Companies with that kind of focus have no problem communicating their brand to their customers. The Myth of Excellence simplifies that and is widely used as a strategic planning tool by successful organizations. On the Mark Strategies uses it in our planning sessions with financial institutions.

The first step for credit unions and banks in using the Myth of Excellence is to decide which primary attribute to position their brand around. - price, product, experience, service or location. You should make this choice with the wants, needs and expectations of key customers/members in mind. Do not assume you know what consumers want. Listen to them, examine your organization's strengths and weaknesses and decide where your financial institution dominates in the marketplace. On a scale from one to five, where five is the highest, choose one area where you will score a five.

For the remaining steps, and more insight on how the Myth of Excellence can work for your financial institution, read the latest issue of my e-newsletter, On the Mark.

Your Employees Need to Cross the Line

My lovely wife is a first grade teacher. It’s a challenging job to say the least. Every day she has to encourage her students to learn. To help reinforce the concept that Mrs. Arnold’s Room 138 is a place of love and learning she put a label on the bottom her classroom doorframe. It reads “The Learning Line.” Every day when little first graders enter her classroom that line serves as a visual
reminder that they are there to learn.

It’s no different when we go from first graders to adults. There are also a few “lines” your employees need to cross as well.

Here are three:

(1) The Learning Line. Learning doesn’t stop in grade school, middle school, high school or college. Your employees should be lifelong learners. And don’t just encourage employees to learn—make it a part of their job. For example, I’ve always required those working for me to read business books (hopefully four per year or one per quarter). But it’s not just reading: allow them to attend training sessions, webinars, local learning events, etc. Is it an expense? No—it’s an investment. The reality is the more your employees learn, the more your company earns. Don’t let your staff stay where they are with knowledge: make sure they cross the learning line.

(2) The Sales Line. Many employees are still afraid of the “S” word. Get over it. The reality is everyone is in sales. Rather than fearing sales, we should embrace it. The better your employees understand what sales really is (educating, teaching, serving, etc.) the better they will understand that sales is not a dirty word and something only for the used car lot and late night infomercials. So let’s change their mindset. Train them about sales. Coach them on how to sell. Improved sales won’t happen just with a wish. Don’t let your staff stay where they are with sales: make sure they cross the sales line.

(3) The Risk Line. Many companies (especially credit unions and banks) are risk averse. We are inherently conservative. That mentality can bleed into our employees as well (sometimes to the point where they are afraid to make decisions or offer improvement suggestions). If you (or employees) are not failing every now and then, then it means you are not taking enough risks.
Here’s an idea: encourage failure every now and then. You can take risks with your employees, your strategies, your marketing, and your tactics. Don’t let your staff stay where they are with ideas: make sure they cross the risk line.

Those are three lines you want to encourage your employees to cross.  And if they don’t? You can always do what my wife does when one of her first graders gets out of line: make them stay inside
for recess.

Get Out of Your Bubble

As credit union and banking executives, we tend to live our lives in bubbles. We talk our own language (debt ratios, risk based lending, return on investment, margins, spreads, etc.). The reality is consumers don’t think this way. Nor do they care. As leaders we must get out of our bubbles and look at our financial institutions from consumers and employees’ viewpoints.

Here are some bubbles we need to break: 

(1) Get out of the executive bubble.

When was the last time you talked to a member or customer? Not in a political, glad-handing way but truly engaged them in a conversation (asking them what they like and don’t like about you)? We tend to sit in our ivory towers and think we know what consumers want. A great way to get out of the executive bubble is to spend some time on the front line. Maybe serve as a teller for a day. Perhaps answer the phones in a call center (that will probably give you more information than you care to have!). You can’t market to consumers unless you know them. And you can’t know them if you are in your own world.

(2) Get out of the marketing bubble.

Have you ever looked at your marketing from a critical eye? We all need accountability, including marketing. The reality is the marketing department is probably juggling so many projects they may not be spending time to analyzing their efforts or their pieces. A great way to get out of the marketing bubble is to conduct a marketing audit.

(3) Get out of your management bubble.

Managing people is hard; many times we’d rather complete a project than converse with one of our employees. As leaders, we have projects to complete. Yet sometimes in our project rush we lose sight of our own people. One of the best ways to break the management bubble is talk with your folks without an agenda. That’s right—manage without a list of tasks you want them to complete. One idea is to give every one of your employees 30 minutes of your time each week where they set the agenda. They can talk to you about anything they want (their career, their job, the financial numbers, something personal, etc.). We often talk about empowering employees; one way to do that is to let them control the agenda.

(4) Get out of the policy bubble.

It seems like as financial institutions we have a policy for everything: lending, H.R., audit, social media, etc. You name it and there is probably something in writing for it. Rather than look for ways NOT to do something (for example, make a loan) maybe we should look for ways to make it work. While policies are important, there should always be exceptions. We can become extremely rigid as financial institutions. The best policy you might have is pretty simple: our policy is to help people.

Bubbles protect us. Bubbles insulate us. Bubbles blind us. And ultimately, bubbles prevent us from growing.

Eight Tips From Business Development Experts

This piece first appeared in the Lone Star Leaguer.

As part of the CUNA Marketing & Business Development Council Conference last month, I facilitated an “Ask the BD Experts” panel discussion. In this unique format attendees could ask any questions (strategic or tactical). The panel discussion offered tips, ideas and suggestions from three seasoned business development experts.

Serving on the panel this year were Mia Perez, CAO, Louisiana FCU, Andy Reed, BD Manager for American Airlines FCU, and Sean McDonald, president and founder of the Business Development Academy. Below are eight general tips they offered throughout the question and answer session from the audience.

 (1) Train your ambassadors—American Airlines FCU has an incredibly robust ambassador program (as do many other credit unions). One of the tips Reed offered that makes his program unique is that he actually trains his ambassadors. He gives them tons of information about American Airlines FCU and what makes them unique. In essence, he has turned his ambassadors into an unpaid sales team.

(2) Hire sales people—McDonald constantly preaches this message: “if you are in business development, you are in sales.” He counsels credit unions to stop being shy about sales. Hiring sales people also means paying them well, paying them a commission and holding them accountable for sales goals.

(3) Show value—Perez noted that when it is all said and done consumers and SEGs want value. You have to prove that your credit union brings value to the business you are serving. In other words, it is far more about them than you. Value could mean educating employees, helping them with their finances, sponsoring company events, etc. Value is not bringing donuts to the company once a month.

(4) Drop member incentives to join—Coinciding with the above point, every expert suggested no longer paying cash incentives at company events to get people to sign up to join your credit union. The bottom line is those accounts are extremely transitory and rarely profitable. Someone should join your credit union because of the overall value they are receiving and not the $50.

(5) Use top down to bottom up strategy—You need to work everyone at the select employee group: from the CEO to the janitor. Don’t forget the importance of getting top executives from the company to be your advocate. Sometimes a CEO can open a door when an H.R. executive can’t.

(6) Rank your SEGs—Not every SEG is created equally. Make sure you spend your time with your most profitable companies. It is the classic 80/20 principle: 80% of your production will come from 20% of your companies. And the key is spending your time with those top 20% and not trying to get the others to move.

(7) Use SEG testimonials—A common problem faced by many business development representatives is losing the company contact when the H.R. person leaves the company. If you can gather testimonials from employees inside the SEG who use and love your credit union that opens up doors that might be otherwise be closed. It also makes it easier to reestablish a dormant relationship.

(8) Talk to CEOs about the numbers—What’s the ROI of business development? Do you ever get that question (the panel sure did)? The best way to prove your business development worth is to show your results with numbers (loans, new members, balance sheet impact, etc.). This requires serious tracking and data integrity but some of the tips offered included making sure front line staff understand the
importance of coding members correctly.

Those were the top suggestions from the experts (including a few that came from audience participants). What other ideas would you add to the list?

Don’t Fall Into the Lack of Leadership Black Hole

"The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership."
- Colin Powell

Leadership is an indispensable trait the management of your bank or credit union must possess in order to thrive. The hyper-competitive marketplace and economic volatility demand it. But being a leader isn’t always about grandiose and visible. Often, leaders are called to simply listen to their employees. As the quote above indicates, if your staff has stopped coming to you with their problems, you might be nearing a failure of leadership.

Listening to people express concerns and frustrations over their jobs isn’t always an easy task. Managers that rise to this task, however, help ensure their staff still believes in them as a leader, still sees them as caring and will still approach them as a resource in career development.

Below are a few tips that can help ensure your employees remain comfortable discussing their problems with you.

• Actively listen. There’s nothing worse than a conversation with someone that is obviously listening with only one ear. Make eye contact, use appropriate gestures and posture and ask clarifying questions when going over an employee’s concerns. Remember the ears to mouth ratio. It’s an easy one: 2-to-1. That is, you should listen twice as much as you talk.
• Remain open to new ways of thinking. Don’t close your eyes to what another is saying just because you don’t understand or disagree. Working to see the world from someone else’s point of view can clarify your vision and enable enhanced communication in the future.
• Take an interest in their personal lives. People are generally happier to talk about the important things in their lives (family, hobbies, sports) than about the day-to-day tasks at the office. By showing an interest in their lives outside 9-5, you come across as empathetic and caring.

Listening to your employees’ concerns may not have a place in your daily schedule, but it should. We tend to spend a lot of time (and rightfully so) worried about what consumers think of our organizations. It makes sense to be equally as concerned over what our employees (and number one brand ambassadors) think, be it good, bad or ugly. Practice listening to your employees and use that skill as a way to build confidence in the leadership of your organization.

Modern Leadership Lessons from Hannibal

“Hannibal was triumph. He embodied it as Hercules personified strength and Odysseus cunning.”

Note: The following post was written by Taylor Wells, Communications Director for On The Mark Strategies. 

Let me start by saying clearly, no, I am not talking about Hannibal Lecter, creepy cannibal villain from Silence of the Lambs. I’m talking about history’s greatest Hannibal, the Carthaginian military leader who nearly brought the Roman Republic to its knees (yes, the same Hannibal famed for crossing the frozen Alps with several dozen war elephants). As the book’s authors puts it: “Hannibal was triumph. He embodied it as Hercules personified strength and Odysseus cunning.”

Learning to face the good with the bad and come out on top at the end is the key.

I recently finished a terrific book, Hannibal and Me: What History’ Greatest Military Strategist Can Teach Us About Success and Failure. While we may be talking about a man dead for thousands of years and far more well-known for wiping out legions than leading board room discussion, the book asserts that this legendary figure offers valuable lessons for today’s business leaders.

 

 

 

Key points to take away include: 

The importance of setting goals
Hannibal was tasked with a goal by the Carthaginian political leadership: carry war to the heart of Italy and subdue the upstart Roman Republic. He did not do so rashly or without planning. He spent time assembling men, weapons, provisions and other equipment. He took time to study the terrain of battle and choose what he thought was the best way to win. We can all do the same thing in our business lives. Speed is critical, but not at the expense of quality. Ensure you have the right equipment, training and support to get the job done. And learn as much as you can about your profession and your competitors.

Dealing with setbacks
Even a military genius like Hannibal, despite his amazing list of victories, experienced setbacks. There was dissension amongst some of his troops. Many of his war elephants died while crossing the frigid Alps. He eventually lost an eye in battle and learned to make do with one. There is a lot we can learn from his setbacks. Tenacity is one such thing. Flexibility and knowing how to work with different people is another. Doing the best you can with the resources available to you is also critical. Every day in the business world will not be a walk in the park. Learning to face the good with the bad and come out on top at the end is the key. 

Facing down the odds
In virtually every battle he fought, Hannibal was the numerical underdog. He also fought the majority of his battles on the enemy’s home turf, deep inside Roman Italy. Hannibal routinely used the terrain to his own advantage and slaughtered tens of thousands of Roman legionaries. The modern business leader must also learn to face down the odds and emerge a winner. Facing a tough deadline? Does management expect a seemingly impossible production goal? Are there squabbles and interoffice politics at play that make a trying job even more difficult? Work hard to find ways to beat these odds, surprising yourself, your co-workers and your managers.

Hannibal’s war against Rome forever altered the course of world history. While he was tough, the Roman Republic was tougher and by extraordinary resiliency defeated Hannibal’s genius in a grueling war of attrition. Hunted by the Romans for years, he eventually took his own life rather than face captured. But his life’s lessons of leadership in the face of great odds and setbacks still hold true. While herding an elephant across a snowy mountain may rank as harder than meeting the deadline for your next set of reports, the elementary principles are similar enough so that modern business warriors may learn. 

Does Your Strategic Plan Chase Squirrels?

My 79-year-old mother recently had squirrel issues at her house. But not just AT her house—actually IN her house. She got home one day and noticed there was a hole on the outside of her house. So she called an expert exterminator (I guess a sort of “squirrel hunter”) who inspected the house, plugged
up the hole, set a few traps and assured her the squirrel problem was resolved.

Then a few days later she heard a loud “thump” from the front living room. When she went to see what caused the noise, there was the squirrel: he had eaten through the sheetrock and was right in the middle of the room.

You’ve probably heard of “Man vs. Wild.” This crazy scene now became “Mom vs. Squirrel.”  She chased the squirrel one way and then another, doing everything in her power to keep the scrawny animal in the front part of the house. She knew if somehow the little beast got in the rest of the house, it was over (for her, not the squirrel). She eventually got the front door opened and chased the squirrel
into the yard. Mom still shakes when recounting this story.

Once I recovered from hearing the story (and trying not to laugh uncontrollably), I realized there are a few lessons for organizations (including credit unions and banks), that do strategic planning. Here is what we can learn and three planning solutions:

(1)  You can’t prepare for everything—No matter how detailed your strategic plan is, something unexpected will happen to deter you from it. Something for which you are not prepared. Notice the “squirrel hunter” was ready with traps and baits. He never once thought a squirrel would eat through sheetrock. Planning solution: make your plan flexible to adapt to a fast changing environment.

(2)  React quickly—Instead of panicking and freezing, my mother quickly jumped into action. Our strategic plans are the same way: when a crisis hits (whether financial, H.R., marketing or something
else), we need to be quick on our feet. Maybe we should hire for an unplanned position, fire when a department doesn’t meet its goals or close a branch rather than delay the inevitable. Planning solution: don’t overanalyze everything.

(3)  Keep negativity from spreading—As I mentioned above, Mom knew she had to keep the squirrel in one part of the house; she had to make sure it was contained. When it comes to your strategic plan, not everyone is going to agree with it. You have negative people in your credit union or bank. Keep those “Negative Nellies” from spreading. Even when your plan goes wrong—and it will on occasion—don’t let a negative attitude seep into your organization. Planning solution: stay positive even in the midst of challenges.

So, does your strategic plan chase squirrels? If so, let’s hope you get rid of them as fast as my mother did hers.

Your Real Competition

Every bank or credit union thinks they know their competition: other financial institutions. When making a list of competitors, the usual suspects arise, such as large national banks, other local banks/credit unions and maybe a few Internet or non-traditional sources (like check cashing services). You know who they are: Bank of America, Wells Fargo, Chase, Wal-Mart, Ace Cash Express, ING, and your local market options.

While those are indeed organizations you must battle, they are not your real competition.

Your real competition is yourself.

Your credit union or bank needs to focus on being the best it can be. Don’t try and be better than another financial institution. Be the best you. The better you are, the less competition you have.

Find a unique or lead product you can leverage. Make sure your staff is trained to the best of their ability. Improve your internal processes. Offer a product because consumers want it and not because your competitors are doing it. Develop a true value proposition that details why someone should use your institution.

Yes, you need to know your market competitors. But you need to know yourself even better. While you can’t change your competition, you can certainly change your organization.

The biggest threats to your brand are internal and not external.

Is Multi Tasking Marketing Effective?

As marketers we pride ourselves on how much we are doing.  Ask any marketing executive, manager or coordinator how life is going and the invariable answer is, “Busy; there are so many projects we are doing.” Yes, most marketers are overachievers—and proud of it.

Any good marketer tends to be a multi-tasking expert. And while anyone working in the marketing field must juggle many balls at once, we must be careful not have too many balls in the air at the same time.

John Jantsch, author of The Commitment Engine, says, “The ability, some might say the attempt, to multitask is a curse of sorts. While working on ten things at once may seem efficient, each of those things gets roughly 10 percent of our greatness while we’re doing it.”

This rush to multi tasking is not just a personality or project management thing either. It also affects the way we market our financial institutions. If we’re not careful we can also fall into the trap of “multi-tasking marketing.”

Look at your 2013 marketing plan and calendar. How many promotions are on it? How many products are you pushing throughout the year? Do you rush from debt consolidation loans in January to tax refund deposits in March to home improvement loans in May to summer loan promotions in June to back to school loans in August to new auto loans in October to Christmas loans in November? And wait—what about checking accounts, CDs, mortgages, and youth accounts? We have to throw those in somewhere. You get the idea. If we’re not careful we just throw everything up in the air and hope we can juggle it all.

So how do we avoid multi-task marketing? Here are two tips: 

(1) Move to brand-based marketing. As we noted in the white paper Transitioning to Brand-Based Marketing, “Consumers know Apple. Consumer know McDonald’s. Consumers know Ford Motor Company. But how many can recall specific promotions or commercials of any one of those? An integration of both short-term promotions and brand-based marketing efforts is the more holistic approach towards building long-term credit union brand awareness, member interactivity and success.”

 (2) Prioritize and focus your marketing. When it comes to their plans, marketers tend to add, add, add. Maybe it’s time we cut, cut, cut. Rather than have a list of 6, 8 or even 10 goals for the year it’s best to focus on what is most important strategically for your financial institutions. In all honesty, three to four major goals is ideal (with three being optimal). This requires laser like focus. The more focused your efforts are, the more effective the results are. Focus on your most profitable products rather than all your products. Develop a lead product that differentiates yourself in the market.

Multi-tasking marketing is an easy trap to fall into, but one we should avoid if we want better results.

Did Your Strategic Plan Lose Power?

We will not remember this year’s Super Bowl just for the teams that played, Beyoncé’s halftime show or the commercials. Rather, the most significant occurrence was the 34-minute blackout (power outage) that covered half the stadium in darkness.

The biggest game of the year. Millions of people watching. The players in the middle of trying to win a world championship. And the lights go out—the stadium loses power.

The same thing can happen with your credit union or bank’s strategic plan. It’s an important document (one of the most important you’ll produce all year). Your managers are watching. Your staff is trying to implement it. And if you’re not careful the lights can go out and your strategic plan can lose its power.

Here are three ways to put a “surge protector” on your strategic plan so its effectiveness continues all year long:

(1) Talk about the plan with staff on a regular basis. Communicating your strategic plan and goals is not a one-time thing. In fact, you need to routinely talk about it with all staff (tellers, loan officers, etc.) and not just the managers. I recommend that any time you have a staff meeting (monthly, quarterly, etc.) you spend a portion of the meeting referring back to your financial institution’s strategic plan. If you think you’re talking about it too much, you may just be hitting the mark.

(2) Connect staff jobs to the strategic plan. Every one’s job matters. And no matter what job they hold, your employees must see the connection their performance has to your strategy. Let’s be honest: it doesn’t matter what your strategic goals are if your staff doesn’t live them. The more connection they
see the better results you’ll have.

(3) Conduct a mid-year planning update. The most successful financial institutions today do not just look at their strategic plan once a year. In fact, many do mid-year planning updates with the executive staff, board or both. A one-day in-depth examination of your plan, your environment and adjustments is warranted. Financial institutions using this model are seeing improved strategic results.

If we’re not careful our strategic plans will lose their power. But taking the above steps can make sure you keep your strategic lights on.