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6 min read

Two Ways to Get Real Change

“Turn and face the strange. Ch-ch-changes.”
–David Bowie

Ah yes, conference season … that glorious time when executives and board members come back with a honey-do list of big new ideas. You know it. You love it. Especially the “transformation” candy from cheery innovation gurus, caffeinated buzzword generators, and other esteemed members of the disrupterati. Somewhere in that immersion exercise or buried on page 24 of the slide deck, there was a sizzling nugget to take away and implement. But even the pushiest Gonzo bankers found themselves back at their desks in Kalamazoo and Abilene crying into their coffee about who gets it done and how.

OK, sorry to be such a negbomb. Let’s brighten this up with some good news to combat the bad.

Bridging new ideas with harsh industry realities, from the home office in Scottsdale, Ariz., two ways to face the strange and get some real change going:

Change through Portfolio Thinking

Bad news: Let’s face it, the biggest innovation challenges right now aren’t new products, technology, and business models. The big challenges are culture and risk management. Boards and management teams everywhere struggle with this. Clear mission and risk appetite statements are a great start, but we’ve all seen statements saying “go” with actions that say “stop.” In that environment, even practical ideas can run into a buzzsaw. Or, as one candid board member put it in a gutsy public comment: “We don’t know how to test and learn. We don’t even think about anything like that.”

Good news: Most bankers and boards are leaders at portfolio management, the risks vs. rewards of a risk-balanced loan or investment portfolio and the judgement and discipline to build and maintain it. The 2008 meltdown thinned the herd of those who didn’t. That same portfolio management discipline can be applied to potential innovations and other strategic initiatives. One way or another, private equity firms do this. Even some bank IT functions do this. And, really, how many new strategic ideas don’t involve technology anymore anyway?

One exercise is to map out strategic initiatives to force a structured debate in the boardroom about risk and return, the sure things vs. the calculated bets … just like in any loan or investment portfolio conversation. A valuation map for strategic initiatives is one approach. (Hint: If you have no research and development initiatives in the upper left quadrant, you’re probably playing it too safe.)

Change through Addressing the Addressable

Bad news: At conferences and strategic planning sessions, it’s so easy to dwell on large potential threats without an exploration of what is controllable.

Good news: Addressing the addressable is a powerful change motivator. For example, one of the consistent strategic threats identified by boards and management teams alike is the regulatory environment. It was among the top executive concerns expressed in the recent industry study What’s Going On. Yet, beyond lobbying, what can a bank really do about it? As it turns out, quite a bit. Speaking publicly on the topic, Cornerstone process expert Ryan Myers recently sized the addressable regulatory reduce-or-redirect opportunity at nearly $1 million annually for financial institutions between $500 million and $1 billion in assets. It’s $2 million or more for less efficient organizations.

So, by adopting best practice process changes, the typical bank can redirect or save $1 million of unnecessary regulatory-related costs while still complying with regulations. And that’s just the addressable regulatory piece—not everything else!

While that’s sinking in, consider that the median $1-billion-asset bank (according to the Cornerstone Performance Report) only deploys around $800,000 annually for its entire marketing effort. And that’s at a time when big behemoth banks and fintech upstarts are both marketing heavily and growing market share.

OK, I admit that addressing the addressable almost sounds a little tactical. But, tight margins, competitive threats, and the resources involved now make it strategic (if it ever wasn’t). Maybe more importantly, addressing the addressable motivates our cultures to lead change in concrete ways. In turn, it frees up the resources for the even higher value test-and-learn R&D initiatives that can noticeably improve the lives of our customers, employees, and shareholders.

So, there are a couple of thoughts on getting positive change, but there have to be dozens more ideas out there. Let’s keep the conversation rolling. Best comment wins a GonzoBanker coffee mug. Go!


Epilogue: Live Aid Heroes beamed into an L.A. living room. Suffragette City cranked up by New York cover bands. Changes spinning every day on a London jukebox. We remember. A shout out from the Gonzo band to artists that challenge and inspire us.


For practical approaches to change and innovation, we have speakers on these and related topics:


  • Leading Vendor Management to Fund Innovation
  • Innovation & Justifying Practical Technology Investments
  • Delivery Trends: Channel Convergence and Funding Innovation

Visit Cornerstone’s Speakers page to learn more.


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