Last fall, the Chicago Cubs broke the most famous drought in sports history when they FINALLY won the World Series. It was a feel-good story for many (unless you were a Cleveland Indians fan, of course), but it also started a wave of research and analysis: How did the Cubs change their sorry history and what could we learn from it?
As it turns out, there are many teachable moments from Chicago’s road to the title, particularly for bankers.
Using the excellent book, “The Cubs Way,” by Tom Verducci, as our model, we’ve identified eight key tactics the Cubs applied successfully that should also be put to work at your bank, ASAP. Here are the first four. The next four will be in next week’s blog post.
1) Differentiation is critical
“It’s not about reinvention. It’s about trying to stay ahead of things.” – Joe Maddon, Cubs manager.
The Cubs Way
In the era of “Moneyball” and analytics, the Cubs took a different approach to roster construction than the rest of the league. Chicago put an equal emphasis on the soft sciences of character and chemistry, while the rest of the league remained focused on the numbers.
This led the Cubs to zig in a second way while their competitors zagged. As other MLB teams focused on pitching, pitching, pitching, the Cubs went with position players. They believed that the players who were on the field every day – outfielders and infielders – would have more of an impact on the team and its culture than pitchers, who play in games much less frequently. The approach helped them quickly accumulate their core of stars: Anthony Rizzo, Kris Bryant, Kyle Schwarber and Addison Russell.
Your Bank’s Way
You’ve probably heard the bankerism: “Our money is as green as everyone else’s.” If that’s the case, then how can your bank possibly expect to separate itself from its competitors? It’s not by offering the lowest rate every time. We all know how that story ends.
Rather it’s by changing your thinking – from pricing a commodity product to making pricing THE product. When you emphasize the deal itself – listening to customers, finding out what really matters to them, giving them all the available options, and then collaborating with them to craft a structure that works for all parties – then you offer something that sets you apart from the rest.
2) It’s not computers or humans. It’s computers and humans.
“Talent wins but … it’s like every year I did the job I just developed a greater appreciation for how much the human element matters.” – Theo Epstein, Cubs president of baseball operations
The Cubs Way
Epstein came along in major league baseball on the tide of the Moneyball movement. At the time, he was part of the crowd that believed numbers and hard data were the best way to judge a player’s potential. Epstein and his analytics colleagues were opposed by the old guard in baseball that focused on “the eyeball” test – seeing the players in person before making a judgment. Eventually, Epstein came to realize that both sides were right.
When it came time to decide whether to draft a player (or trade for him, or sign him to a contract), the numbers could be used to narrow things down and to come up with options. But the final layer added on had to have the human touch. What kind of a person was the player? How would he respond to adversity? Would other players want to play with him?
Your Bank’s Way
There’s a similar debate occurring now in banks in the arena of Artificial Intelligence (AI) and Machine Learning (ML). Will all that automation deprive a bank of its humanity? Will machines replace humans?
Again, just like with the Moneyball approach, computers can help a great deal, but they only go so far. The customer interaction is still very much a human one, built on relationships forged through trust. When you think of it as “augmented intelligence,” then it starts to make sense. The intelligence that the computers pump into the sales process augment what humans can do by making them better at their jobs, and helping them provide more value and build stronger relationships with customers.
3) Empower your people and those who manage them
“Any time anybody shows up to work, they need to feel as though they can make an impact.” – Joe Maddon
The Cubs Way
Maddon was describing his approach to his coaching staff. Before he became a manager, he’d always been a confident coach, willing to share his ideas with his bosses about ways to make the team better. When Maddon eventually got the head job – first with the Rays and then with Cubs – he wanted coaches working with him who had the confidence to speak their mind, instead of just taking orders.
There was a similar dynamic between Maddon and his boss, Epstein. Here’s how Maddon described that relationship:
“We include each other in everything, but when it comes down to on the field, in the dugout, the clubhouse, (Epstein) gives me all kinds of freedom.”
Your Bank’s Way
When your relationship managers (RMs) are working on deals, do they have a strict set of guidelines and rules they must follow? Or do they have a target to shoot for and then the freedom to find the best way to achieve it? The former approach produces low-confidence employees with little skin in the bank’s game. The latter produces empowered RMs who take ownership in their work.
Is your relationship with RMs like Epstein’s with Maddon, or is it like Oakland A’s general manager Billy Beane – the pioneer of the Moneyball movement – with his manager? Verducci wrote that Beane “cast his manager as little more than a middle manager, who occupied the narrow space of implementing the will from above.”
4) Communicate. Communicate. Communicate.
“(Gene) Mauch affirmed Maddon’s inclination to create a positive working environment by creating trust with his players, which he believed began with honest, open communication.”
The Cubs Way
Whenever Maddon made a significant change in the Chicago lineup, he made sure to send a personal text to the player, inviting them to talk about the decision. The conversations didn’t always end in agreement, but they did help the player at least understand where Maddon was coming from. It was a transparent approach, one that Maddon felt built trust. The key to it all was to emphasize the importance of communication.
Your Bank’s Way
Do your RMs know what the bank’s overall goals are? Do they know about the current state of the commercial portfolio and how it’s being steered?
When your customers sit down across the table from your RMs, do they understand what the RMs are trying to achieve for the bank and the ways the deal can be crafted accordingly?
If the answer to all of those questions is yes, then you’re building that Cub-like culture at your bank. If the answer is “no,” then it’s time to start communicating.
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Check back next week for the next four reasons why The Cubs Way should be your bank’s way.
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