I was working for what was mathematically and empirically the 2nd WORST bank in the entire state.
This is not my opinion.
This is not my estimation.
It was fact.
I had compiled a ton of research of all the banks in the state using the FDIC's institution database and based on measures like depository growth, loan defaults, loan delinquencies, OREO, oh, and let's not forget those old school measures like ROA and ROE, this bank was without a doubt the second worst bank. Actually, it was quite clear this bank was the second worst, because it was a "very distant second worst." It was very obvious it was in bad shape and the only reason it was second was because there was another bank that was even more spectacularly abysmal than this one.
Unfortunately, I was working for this "second worst bank."
Naturally, because we were in such bad shape, I thought part of our efforts (in addition to cleaning up all the bad loans that were made) would be to restructure the bank, marshal our resources, and then attempt to start growing again. To start anew, and start going after new, but quality business and thusly provide our (very) benevolent shareholders a decent return on their investment. Besides, I was no longer a measly credit analyst, I was now a VP in commercial lending, which meant my job now entailed pursuing new business and expanding our market.
I was fine with this, because truth be told, the underwriting or "credit analyst" part of my job was easy. Also, I was not allowed to repossess, foreclose, liquidate or do anything to clean up our "bad loan portfolio" which meant I had about 6 hours a day to pursue business development.
Just one problem.
I was never given the green light to pursue new business.
You see, all of the higher ranked individuals were too busy dealing with bad loans, decaying collateral, difficult clients, and complying with new federal regulations to approve a business development strategy. They didn't have time to start pursuing new business. Understanding this, and having about 6 hours a day to twiddle my thumbs, I did something spectacularly stupid and should have known better.
I took initiative.
I put together what (in my opinion) was arguably my finest piece of work in my entire corporate American career - an entire marketing strategy for the whole company, based on market research, FDIC data, economic data and so forth.
It was thorough.
It was complete.
It was concise.
And it was brilliantly innovative.
It was also, completely ignored.
"Too busy to read it."
"Gotta deal with the OCC."
"Oh, thanks, yeah, I took a quick look at it, but I don't have time to get back to you on it. Maybe next week."
and other such excuses I received for no less than (are you ready for it?)
And so there I was, like a top of the line F-22 Raptor, mothballed in a hangar. Capable of carrying out a great many things, but the brass was too busy worrying about the paint color on the runway or what to order for lunch.
So there I sat, doing what most corporate cogs do - acting like they're working, when they're just killing time. Matter of fact, I didn't even bother to "look busy." I'd just listen to music, e-mail my friends, facebook and so forth. My "boss" would come in, have something that would take him 8 hours to do because he was old and inept, and I'd knock it out in 15 minutes. I'd take a morning work out break (one hour), then lunch (another hour) and sometimes I'd go for a motorcycle ride just to get some air. However, what constantly gnawed at me was what was substituting my marketing strategy in its stead:
Chocolate chip cookies.
You see, my plan consisted of breaking out of the traditional banking mindset. Doing things differently, innovatively, and creatively. We were small, and thus nimble, and if we streamlined operations, got rid of our bad clientele that consumed our labor resources, we could (I estimated) undercut our competitors' interest rates by .5% and still pull profit. We'd also poach business from our competitors by aggressively targeting their best clients, and we'd get new business by doing fun and creative things like sponsoring barbeque and hotwings competitions, dance classes, and sports competitions.
But no, oh no, we were going to deploy the brilliant strategy of "chocolate chip cookies."
As I was told,
"You see, it's all about superior customer service. It's all about personal service. When Bill walks into the bank, he wants to chit cat, and talk. He likes it that we know his name. And that's why people bank with us. We have cookies on Fridays and offer them cofee"
And so instead of targeting a higher quality clientele, looking for new and profitable business, we were going to be the shucks howdy, gee-whilliker's dandy bank and offer money-losing-customers chocolate chip cookies (but only on Fridays).
The reason I highlighted/bolded the statements above is because this had happened before at the credit union I worked at. We offered "cookies" to our clients when they came in. And when a bank's (or any company's) strategy is "cookies" and "superior customer service" I can gar-ron-freaking-tee you that company's strategy will fail.
The reason why is simple - it's not a strategy.
It's a platitude leaders spew who have no ability to lead, let alone, ideas to offer.
YOu see, if you're going to offer "superior customer service" then the first and primary way you do that is by offering a better product at a lower price. In banking this translates into offering them a lower interest on their loans or a higher interest on their deposits. Free checking and no fees. Stuff like that. THAT is the SERVICE people want. Not f#cking cookies on Fridays (and technically it was popcorn at my branch, only the main office offered cookies).
Additionally, the whole "superior customer service" is a canard in that WHAT FREAKING BANK DOESN'T CLAIM TO OFFER SUPERIOR SERVICE!? Have you ever heard of a bank claiming they offer INFERIOR service? Unless you've hired the absolute best customer service people NO BANK (or company) offers SUPERIOR customer service. You're all the same, you're all providing an equal standard of "faux customer service," while completely ignoring the quality of your product.
The result is obvious - do you know of any bank that is demonstrably superior and better than others? Can you find a single, innovating, mover and shaker bank, busting its ass off to offer you a significantly lower interest rate on your mortgage than its competitors? Or is it that same faux-Minnesota-nice teller at Wells Fargo who is being forced to fake an interest in "what your plans are for the weekend?"
Of course, this lack of any true innovation or ideas is not relegated to banks. Sadly it affects practically all of corporate America. For example this little article here. As further proof corporate America is all out of ideas, food manufacturers are spending their time trying to make their processed food looked more "homemade." Kraft alone, spending 2 years to develop a cutting technique to make their turkey "unevenly cut."
But the primary reason in bringing this up is not to knock the banking industry or the food service industry, but one of serious consequences. The ONLY place any kind of economic recovery or a return to our western countries' former greatnesses is going to come from is the private sector. And the ONLY way we are going to solve our debt problems or enjoy increasing standards of living is through the innovation, creation and productivity of private individuals in the private sector.
But for the Patron Saint's Name of Frick.
If "Friday cookies," "superior customer service," the Wells Fargo teller faking interest in my day, and "uneven cut turkey" is the best our private sector can come up with, we are doomed. Because those ideas, are frankly, so stupid they may as well have come from the public sector.
Aaron Clarey will be speaking at the Liberty Mastermind Symposium in Dallas June 28th-29th. Everybody is welcome to join. You can sign up here!