The Postal Service's recent proposal to drop Saturday deliveries, close offices and add self-service kiosks in grocery stores really struck a nerve.
For years, I've used post offices in examples of corrosive "branch experiences." Nobody wants to be there. And when they are, their goal is to get in and get out as quickly and painlessly as possible.
I've asked bankers to consider the demeanor, body language and facial expressions of customers in their branches. If I didn't know where these customers were, would I be able to distinguish their demeanors while in a bank branch from their demeanor in a post office?
That always gets chuckles, but the answers aren't always so funny.Regardless of how a particular bank answers the question, it is becoming indisputable that what it takes to keep our bankers and branches relevant to customers continues to evolve. The "have-to-use-a-branch" model is vanishing before our eyes.
But whatever new strategies or operating models individual banks choose, a universal challenge is getting teams to embrace (or at least not to fear) the changes they entail. It is difficult for companies' strategies and operations to evolve if employees' mind-sets aren't evolving with them.
I find the current postal service story especially relevant because most folks figure that post offices have been around forever, doing things the way they've always done them. And we'll always need post offices, right? But nobody is immune to change (with the possible exception of the DMV).
One doesn't have to look hard to find industries — both new and mature ones — that have been turned on their ears in the past few years.
Newspapers and magazines must adapt to the seemingly overnight evolution customers have made to electronic media. Huge investments in printing facilities and physical distribution have gone from competitive advantage to millstone.
Apple now sells more music than any company in America. Blockbuster was once thought to have a near monopoly of the DVD rental industry. NetFlix and Red Box were cute ideas. But customers prefer physically shopping big stores with big selections, right?
The first stop for people looking for a house used to be a Realtor's office. Our first call when planning a trip was to a travel agent. Those professions and industries have an almost entirely different operating model than they did just 10 years ago. Closer to home, the Federal Reserve had 45 paper-check processing sites in 2003. Today, there is one. This fact is not a "canary in the coal mine" for bankers. It's a condor. And yet many seem unimpressed with the sea change in customer behaviors. A simple example is that many bankers still question the strategy of placing branches within supermarkets and other high-foot-traffic sites.
But I would respectfully suggest that, in our increasingly Internet-driven world, it makes sense to go where customers are instead of expecting them to come to you. It seems now that even the Postal Service has figured that one out.
Discussing other industries' evolutions with our teams also helps us see changes from the perspective of a customer. When we reflect, most of us cannot believe some of the things we once put up with in order to buy or gain access to our favorite products or even basic necessities. More bank customers are thinking the same thing.
Industries evolve, and the businesses that best evolve along with them prosper. In fact, nothing shakes up entrenched markets so much as tectonic shifts in customers' preferences. These shifts are happening all around us.
Will those who begin adjusting their strategies, practices and models make mistakes along the way? Sure they will. But those who think they can simply stand pat and then magically flip a switch whenever they choose to instantly change their culture, strategies, distribution etc. are kidding themselves.
Companies are not usually left behind by an industry revolution so much as by industry evolution.
How individual banks decide to evolve will vary. Some will redefine the functions of their branches. Some will reduce branches. Some will choose to add branches. Whatever the strategy, the increased role of technology will be undeniable.
I've often kidded with bankers that they should only become really nervous if their leaders haven't modified or changed a strategy in years. And I've suggested to leaders that they talk even more about how and why even small "tweaks" to their strategies are made.
Industry evolution is unavoidable. Whether our teams are energized or terrified by it depends greatly on how leaders communicate with them along the way.
