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Change is in the air

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ou might think this will be about the change of Administration in our nation’s capital. That’s certainly a big change, but, no, we’re looking at the ability to deal with change—political or otherwise. Most people will say publicly that they embrace change, that change is good, or that change is inevitable in any case so we might as well accept it. Privately, however, many resist it, even while trying to convince themselves otherwise. What is it about change that causes so many people—and, by extension, businesses—to freeze in the headlights? It’s not one thing, certainly. Mostly it’s human nature. Many business books have been written on the need to change, yet the topic never grows stale. That’s because every day brings reminders of the never-ending stream of trends and developments that steadily erode the status quo. Herewith a few factors—pro and con—that affect an organization’s ability to change. • You need keen observers. Many trends develop over time, under the radar, then “blossom” seemingly overnight. You need people on board who see patterns developing before they pop and before everyone joins the rush and no one gains an edge. • You also need “inside” observers. These are folks (probably different people from those just described) who have an eye for how things are done within a company compared with elsewhere. Without them you cede advantage to clever outsiders who look at what you do, scratch their heads, and ask, “Why do they make it so difficult? (Bankers will answer, “Regulations!” which, of course, is true, but not the whole story.) • You need quiet time to reflect on what your observers have seen. Such time is hard to come by. You have to carve it out. Remember, however, there will always be naysayers to any proposed change in direction. Listen to too many voices and you’ll end up doing nothing. Careful consideration is good. Hesitation is the enemy. Better to make a mistake than to hesitate. • Be willing to take a calculated risk. Bankers by definition take calculated

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BANKING EXCHANGE

risks every day, of course, but not always in areas outside their “comfort zone.” The fast-moving world of mobility, artificial intelligence, et al, is one such area for many in so-called traditional businesses. One of the toughest decisions in business is to know when to let go of what’s familiar and still profitable. Too soon and you hurt earnings. Too late and you may never catch up. • Get a “driver.” Once a decision is made to change direction, every organization needs drivers. These are the people who make things happen. Drivers are different from leaders. Leaders set the goals and tone, communicate the mission. Drivers get people to move toward the goal. You need both. Drivers, as we know from recent industry events, need proper goals and supervision. But they are still needed. • Be willing to fail. Yes, this is a darling of the fintech crowd (they often call it “fast fail”), but it’s a valid point. For the record, let’s note that it’s easy to extol the virtues of failing when it’s someone else’s money, reputation, or livelihood on the line. Even so, those in charge should encourage subordinates to try new things and not penalize them if they don’t work out. Related point: If you do nothing because you’re not sure you’ll succeed, that’s just a slow road to failure when the marketplace is changing all around you. • Beware success. As John Sculley observes in “Counterintuitive,” page 48, the banking industry overall is very profitable. As a result, he questions whether banks have the incentive to “pivot,” as he says, toward the fintech world in a way that plays off banks’ strengths. He thinks some will do so, but others will be like Kodak—ver y successful until quite quickly it was left behind for failing to change. • Acknowledge the “X” factor. Recognize that even if you’ve embraced all the above, to succeed in executing a major change in direction always involves good fortune, fate, Providence—call it what you will. Many successful people acknowledge this nonquantifiable contributor to success. Doing so helps keep one humble.

December 2016/January 2017

BILL STREETER, Editor & Publisher bstreeter@sbpub.com

One of the toughest decisions is to know when to let go of what’s familiar and still profitable. Too soon and you hurt earnings. Too late and you may never catch up


December 2016 January 2017 Banking Exchange