Revolution On Demand

aaeaaqaaaaaaaah-aaaajguxmzlhmgi5ltdmm2mtngm2zi04m2e4ltnhyjc3ywflmdjhnqI read an interesting story recently regarding the Competition and Markets Authority requiring banks to open up their doors to innovation.

The story tells how banks need to do better at the nuts and bolts, switching accounts, capping fees, all the stuff that makes banking miserable when banks get it wrong.

It’s useful to see a light shone on this area in the general media, but in this case I think the story somewhat misses the point.  The real battleground in banking isn’t around the ease of switching and clear statements, but around the experience of banking.

For most people banking is an inconvenient necessity, a commodity.  Banks already fight over headline rates knowing that most folks who switch to their account will be retained even when the rates start to creep in a less generous direction.

The real question here is the user experience.  What does it feel like to use my bank?  Does it feel like I have to justify withdrawing cash to a teller who has no business enquiring what I need £500 for, or do I need to queue up and fill in forms?  As people begin to use technologies like apple pay and contactless cards, the contrast between the retail and the banking experience on the high street becomes very sharp.

And the same is true in business banking.  Small businesses in particular want a bank to support and help them – really deliver meaningful help not just sell them “business stuff” at a small discount.

The good news, is that this revolution is happening.  Not because the watchdog is barking about it, but because big banks and challenger banks alike are deploying modern digital technologies to their customers (like our own credithq) and finding that they improve their ability to attract and retain new customers and that those customers do better whilst they’re with the bank – reducing risk and growing faster.

So it sounds great doesn’t it.  Well there’s still a problem or two to overcome.  Banks are big – really big – and really set around doing things in a particular way.  They’ve set things up, and then restructured and then built on the stuff that was originally there until the systems, departments and functions are woven together in a way that’s really hard to change quickly and at scale.

So does this mean that high street banks are doomed and it’s these challenger upstarts with their new IT systems and shiny brands which will succeed?  Not necessarily.  Banking is fundamentally about trust, and that’s one reason we don’t like to change our bank account very much.  Maybe that gives the high street time to catch up.  Only time will tell, but watch this space.

This particular revolution won’t be televised, it’ll play out on your browser, on your smartphone, and in your high street.

Banking tech revolution ordered by watchdog

Real Integrity?

Leadership and integrity seem to be the business buzzwords of the moment, with no self-respecting businessperson claiming anything less. But look closely at most businesses – especially those under stress – and it’s often the case that leadership has fallen short of the mark and integrity hasn’t picked up the slack. Recent examples from the popular press would include banks putting profits ahead of customers’ livelihoods, or energy companies capitalising on a captive market, but it would be misleading to think that it’s only in these extreme examples where the behaviour of individual team members gets out of whack with the organisation’s values and objectives.

In my own experience, I’ve found communicating the values of the company to be among the hardest parts of growing a business. When taking on team members it’s often easy to focus on the nuts and bolts “job to get done” and skip over the true values of the company and the culture of how it’s appropriate to act towards colleagues, trading partners and customers. A few years ago I joined a company which had a particularly poor reputation in its sector. It was seen as a badly-behaved big business that took advantage of its customers with high prices and long contracts. My team had the job of turning around the reputation of the company – a company whose leadership had a genuine care for its customers and wanted to reconnect with them at a fundamental level.

In taking one partner out for lunch, I was told in no uncertain terms that: “I’m fed up with the person in your chair promising that things are going be equitable, only to find out later that I’m being set up to take the hit.” After working hard with that partner for more than six months and delivering a real improvement in the relationship, my counterpart told me: “It all started that first lunch when you paid the bill. No-one I’d met before from your company would have picked up the tab, they’d have expected me to do it.” By extending the basic courtesy and good manners that are essential in any relationship, I’d been true to the headline on our relationship – “partner”, and when I had to justify the expense, it was easy to do among colleagues who each understood that the company’s approach needed to reflect our objectives.

So what can you do to ensure that each team member is empowered to act in a way that’s consistent with where your company is headed?

  • Identify your values. Mission statements are a bit old hat, but being clear about your brand and your values is essential to the success of any business. Find all the ways you can bring those alive in how you run the company and act with colleagues.
  • Set out clear objectives. Knowing what you need to get done in a given quarter/month/week helps you decide what you can’t do – and that’s essential. Knowing what you can’t do means you won’t be over-confident and can pay your bills on time.
  • Keep your word. Tracking what you’ve committed to – in public and in private, in the big things and the small is the only way to build trust. Don’t let being disorganised be your excuse – systems like GTD (Getting Things Done) are your friend.
  • Pay your bills on time. Small businesses suffer at the hands of big companies who don’t pay their bills – so lead from the front and ensure that you pay your bills on time. Not only is it the right thing to do, but your credit rating will improve and you’ll benefit as a result.
  • Say sorry when you get things wrong. Ask for forgiveness and help getting things right next time.
  • Finally, be honest with yourself – and with others – about what you see in the world around you.  This week as the people of Europe and Greece struggle with a situation that many argue should never have arisen, there’s the ideal opportunity to go back to values and think long and hard about the right thing to do.  Whilst I’m not a politician and don’t have a solution to propose, I can also see very clearly that pretending everything’s going to be OK is not a route that will work, because it lacks integrity.

(from a guest post on SME Insider)

Does your business budget reflect your business goals?

It’s worth remembering among all the hype and hurried analysis of the Government’s budget that the most important budget for your business hasn’t just been pulled out of that famous briefcase: it’s the one that’s setting your spending priorities day to day.  Just as we can tell a lot about the government’s priorities and real message from the budget changes, it’s our own businesses’ spending priorities that tell a lot about what our priorities really are.

A great practice for any small business is to take a full and proper look at the whole budget – not just the tweaks and headlines. To do this, you’ll need to ensure that you’ve covered each of the following five areas:

1) Know what you’re spending, and on what. It’s easy to keep a track of spending on big ticket items like salaries, and rent and bills with key suppliers, but while those transactions might be clearly visible,  it’s important to keep tabs on other spending in the business, such as travelling, entertaining, telecoms and IT. These are all costs that are easy to take on without really realising the impact on the big picture and it’s crucial that you have a clear and up-to-date picture of where things are. For most small businesses, keeping management accounts can and should be a simple operation. It might be achievable with a spreadsheet, but more often than not, one of the many bookkeeping software tools around can act as your point of reference for tracking spending and can join up your payroll, invoicing and staff expenses activity in one place.

2) It’s then essential to classify your spending – to know where the money is really going. Rather than just accepting generic categories, make sure that you pick what is right for your business. Sales and marketing might be one budget or might be separate activities needing their own budgets. Team members might originally be allocated to one area of the business but then move to work somewhere else. Ensure that you have the right labels on all your expenditure and be prepared to make judgement calls to represent things correctly. For example, your phone bill might be an admin cost, but if 80percent of charges are from outbound marketing calls, that’s how the cost should be accounted for.

3) Before looking at the results of 1 and 2, you need to look at strategy – what activities and numbers are important for your business? Are you focussed on growing your turnover as quickly as possible, or on maximising profit from your most important product or service? It’s worth thinking about this in budget terms and considering what percentage of your effort you feel you should be pushing to a particular area, whether this be marketing, sales, operations, support or admin.

4) Now comes the moment of truth, where you bring together your priorities and your strategy with where your money is going. The chances are that they won’t line up. All businesses evolve over time as markets change and products and organisations mature. Businesses that can adapt and spend their resources in a way that aligns with their strategy will outperform those that don’t every time.

5) Finally, you have to follow through on all of the findings. Your budget might show that you need to spend less in one area and more in another to ensure the health of the company, but it’s not as simple as waving your briefcase like a magic wand. You will need to engage your colleagues with changes in how the business operates – perhaps quite major ones – and it can be just as intimidating to have ones budget trebled as it can to have it slashed. Your budget might require that team members are assigned to different roles in order for the business to improve its performance, so once you’ve set out your own budget, that’s when the work really begins.

Re-posted from SME Insider 8th July 2015