Is Your Commercial Bank Too Satisfied for Digital Transformation?

April 30, 2018 Maria Abbe

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Dissatisfaction isn't always a bad thing. Hear from Dallas Wells in this episode on why your bank may need some level of dissatisfaction to be successful. 


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Podcast Transcription

Jim Young: Hi, and welcome to the Purposeful Banker, the podcast brought to you by PrecisionLender, where we discuss the big topics on the minds of today's best bankers. I'm your host, Jim Young, director of communications at precision lender, and I'm joined again today by Dallas Wells, our EVP for international operations. The title of today's podcast is, 'Is You Commercial Bank too Satisfied for Digital Transformation?'. It's based off an MIT/Sloan Management review article titled 'The Digital Mandate, Cultivate Dissatisfaction' and the author is George Westerman.
So, Dallas let's just address the elephant in the room here, are you dissatisfied with the purposeful banker podcast?
Dallas Wells: I am, actually, but of course as we'll find out that's a very good thing. So congratulations on that Jim.
Jim Young: Thanks for being dissatisfied with this podcast.
Dallas Wells: Yeah.
Jim Young: So yeah, I was gonna say we're kidding I hope. But the idea here, in this article is that if you're satisfied, and for our purposes we're gonna turn this obviously to commercial banking. If you're satisfied with how your commercial bank is operating, that may not be a good thing. And the flip side of that is if you're dissatisfied, as Dallas is with this podcast, that may be a good thing.
So Dallas, can you explain what George Westerman is getting at here?
Dallas Wells: Yeah, so I think what he's really getting at is that change is hard, digital transformation is really hard, especially in an industry like banking. So it takes some level of dissatisfaction or pain to be there to really drive that kinda change. So it probably goes back to sales 101, that there's a school that says sell all the benefits you have, but really the more successful way to sell it is usually point out all the pain that you currently have. Find a flaw currently, and solve that problem for someone. So find the source of dissatisfaction, and that's where you actually get action from people. The old saying, "If it ain't broke don't fix it," that's a very strong feeling in the banking world.
Jim Young: So yeah, I was gonna ask for your kinda personal experience having been on both sides of this. On the banking side of being sold to, and on this side selling to banks, whether you think he's onto something here. How often when you talk to banks when they're reaching out to us, and that sort of thing, is the driver some form of dissatisfaction?
Dallas Wells: Yeah, it's almost always a pain that causes somebody to proactively reach out to us. It is dissatisfaction with either the results, or just how hard it is to get to the results. And that's what's actually pretty interesting about it to me, which is maybe a deeper cultural issue that we can talk about. But I would expect that the banks that have poor performance, that is pretty easily attributable to poor pricing practices, you would expect those banks to be the ones that would be raising their hands and saying, "Hey, please come help us." And it's actually not. A lot of times instead it's the higher performers who say either, "We see how important this is, and we think we can do better." Or, "We're getting this done, but it's really painful. And it's a struggle as an organization, and we think there's gotta be a smoother way." And I think that constant seeking of a smoother way is part of what got them there.
Jim Young: Yeah, and I think you're kinda hitting on one of the things that honestly threw me off a little bit in this article. You mentioned constant seeking, that's a much softer term than dissatisfaction.
Dallas Wells: Yeah.
Jim Young: And that's one of the things, to me there's a difference between what he's talking about, this type of dissatisfaction that's seeking, and the other type where if you say, "Yeah, at my bank we're always dissatisfied." Most people think that means everyone there is really annoyed, and there's really low morale, right?
Dallas Wells: Yeah, and I think that's what makes this pretty tricky to diagnose is a lot of people grumbling around the water cooler about any and all things at the bank isn't necessarily a sign that you're doing it right, right? It could be symptoms of a lot of other problems. But I think the tricky part is that if you have people who are willing to constantly think about is there a better way to do this? So it's not so much annoyed as it is, I feel like there's gotta be a better way. Surely we can build a better mouse trap. And having kind of the authority, and the ability within your culture, within your organization to be able to say that out loud, for one thing, and to act on it secondarily.
So we hear a lot of complaining in banks that doesn't turn into action because oh that's just the way it is, and the people who built these processes are the ones in charge, so you can't speak up too loudly. That's very different than constantly seeking to improve.
Jim Young: True. I guess one thing I wonder about a little bit, he went into this whole thing of unfreezing things, and then changing, and then freezing them again. But then sort of mentioned that you kinda wanna stay perpetually unfrozen.
Dallas Wells: Yeah.
Jim Young: So that you can constantly be, and I wonder about that part too, which is how do you avoid [inaudible 00:05:39]? And work for work's sake?
Dallas Wells: Yeah.
Jim Young: And let's test this thing again, even though it just worked just fine, let's see if we can build ... You know? We caught the mouse with the mouse trap, but let's see if we can catch the mouse in point two seconds less. How do you balance that sort of need, like you said, anytime to innovate these people that do that aren't people that go, "Oh, this works, it's great." They say, "Could we do it better?" That makes sense to me, but what I would worry about is where do you draw the line between ... 'Cause we talk about it too. We talk about MVP, right? And you know, doing stuff, and just getting it out there, and that sort of a software ethos. But you don't want to be constantly fine tuning something when it's already doing pretty well. So where do you draw that line? If you were heading up your commercial bank division, where would you draw that line to make sure that you guys are seeking, and got that right type of dissatisfaction, but make sure you're not spending too much time seeking?
Dallas Wells: Yeah, well I think there's a couple of parts to that. And it's things that we've seen some banks do really well with, and also things that we just had to learn through some growing pains of our own here at precision lender. So on one side, you need to make sure that if you are tinkering with things, make it as data-driven as you can. So you don't wanna be doing a lot of changes and adjustments by gut feel. So a lot of times the first step in an improvement process is, "Man, it feels like it takes us forever to book a loan." Well, let's quantify that. How long does it take you to book a loan? And you know, if it takes you four months, and we feel like there's real value in getting that to three months, then yes, tinker away, right? Get that problem solved. But we should see where we start, we should know what good looks like, and we should work towards that.
And there comes a point then, where there is the other side of that is there's some diminishing returns. So let's say we get that down to one month, and we are best in class, and we book loans really, really fast. Could we get it from 30 days down to 29? Maybe, if we keep chipping away at it, and maybe that's worth it. But there comes a point where we start to negatively impact the end users, the customers, we're rushing them through too quickly, we take on too much risk because we push the line too far. You have to know where that balance is. And I think the only way you can get there is again, by measuring it, and having a goal in mind with any tinkering that you do. There should be a pretty clearly spelled out outcome instead of just, "This is so obnoxious, I'm gonna change it." Let's define why and how.
Jim Young: Yeah, and I think there's also, not to get super touchy feely here, but there's also a cultural aspect in this too, in terms of how you frame it. I think if you frame things in terms of this isn't good enough, that can be a morale depressant. You need to do it, but if you can frame it in terms of how can we do this better, or can we do this better, that sort of thing, just so you don't make people feel like their best is never good enough. I think that can be an important thing, particularly if you're creating this as a perpetual sort of thing. If each week in your meetings you're measuring things, and talking about it. If you're constantly framing it as that isn't cutting it, this isn't cutting it, then people kinda get tired of rolling that ball up a hill to only have it roll back down every time.
Dallas Wells: Yeah, I think that approach can work if it's a one time, something is really broken, and we just need to rip it out and fix it. And we see a lot of banks take that approach in too many things. So everything is a multi-year, multi-million dollar massive project. When they should be taking it in more bite sized pieces. So if you are doing this kinda gut rehab, one time shot, then you can probably push a little harder and do it that way. But if you really want this to be part of the culture, I think you're right, it has to be the improvements that you make along the way don't have to mean that the prior version was a failure. If nothing else it was a path to get to the better solution, right?
How many variations of things did Edison try before he got the light bulb right? So each of those along the way was a contributor to the final success. So you have to celebrate failure, failure is probably a strong word for it. But you have to celebrate that iteration, and make it okay to build something that's not quite perfect, but it's better than it was, and know that somebody can come along later and make it a little better again. So that we don't always have to come up with the perfect one time solution. We just get a little bit better each time, again, measuring as we go, clear progress towards a goal.
Jim Young: Yeah, maybe not celebrate the failure, but celebrate the seemingly minor improvement.
Dallas Wells: Yes, exactly.
Jim Young: Each time they come along.
Dallas Wells: Yep.
Jim Young: So yeah. All righty. Well that'll do it for this week's show, hopefully this is a slightly improved version on last week's show, and the show after this will be a slightly improved version on that one. But if you wanna listen to more of our purposeful banker podcast, or check out more of our content, you can visit our resource page at PrecisionLender.Com. Or you can just head over to our home page, PrecisionLender.Com, again to learn about the company behind this content.
Finally, if you like what you've been hearing, make sure to subscribe to the feed in iTunes, SoundCloud, Google Play, or Stitcher. We'd love to get ratings, any feedback on any of those platforms. Until next time, this has been Jim Young, Dallas Wells, and you've been listening to the purposeful banker.

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About the Author

Maria Abbe

As a Content Manager here at PrecisionLender, Maria develops the messaging, stories and content pieces for prospects and current clients – showing them the value in PrecisionLender. Her passion for serving others is evident as she leads the volunteer program here at PrecisionLender. Maria’s ability to be organized and constructive, along with her ability to be practical makes her an exceptional addition to our team.

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