Once upon a time, small banks thrived in the United States. They were everywhere.
But things started to change.
With the great recession and Dodd-Frank, small banks started to disappear at shocking levels.
Community bank leaders are becoming increasingly desperate to learn how to reverse the trend. How do we lead our banks through these times of radical disruption?
And make no mistake, we are living in THE era of disruption. In fact, my contention is: “Never in human history has there been a more disruptive time than we have today.”
Three major factors driving this epic disruption are:
- The quantity and speed we get information
- The direct nature of that information—it no longer filters through traditional channels
- Exponential innovation
Because of these forces, entire industries—staples of our everyday life—are being changed forever. (Think the music industry, lodging, taxis, retail, automobiles, media, healthcare, insurance, manufacturing, and—yes—banking.)
It’s easy to be overwhelmed by disruption in “the world around us.”
So it’s important to put the “world around us” into perspective.
Experience the passage of time (viewed as a trip from N.Y.C. to L.A.)
Let’s metaphorically align the history of the planet to a trip from Los Angeles to New York City, a distance of about 2,400 miles.
Let’s say the trip begins 4.5 billion years ago. Each mile represents roughly 1.9 million years.
So, you set off from New York and travel… and travel… and travel. Every state you pass through represents geological eras whose names most of us haven’t even heard of.
And you keep traveling. The miles pass. You hit the California border. You’re still in pre-historic times. You keep going.
You continue to travel… and travel… and travel.
You eventually reach within 1.5 feet of the Los Angeles border. On our timeline, that’s when Columbus sailed to America.
At 8.2 inches from your destination, that’s when America declared its independence.
2.6 inches: America was fighting in WWII.
0.8 inches (or just 25 years ago): The start of the information age
Who knew so much could happen in less than an inch….
Incremental progress adds up quickly
Life is a game of inches… fragments… fractions….
It’s the difference between 211-degree water (otherwise known as “hot water”) and 212-degree water. With that one extra degree of heat, water is now boiling and producing steam that powers locomotives, factories, and cities. One single degree makes all the difference.
Winning or losing is often of the tiniest of margins.
My point is that those tiny margins of victory are getting smaller in the era of disruption, and bank leaders need to fight for the smallest advantages to survive and thrive in the future.
But how does a Baby Boomer fight for a technological advantage when they don’t know I.T.?
The average age of a bank CEO is 57. A Baby Boomer through and through, this person definitely did not grow up using today’s technology.
Many admit they yearn for the days of pen and paper, or of secretaries pounding away on typewriters.
Yet now they are responsible for leading their firms through the age of digital disruption; an era of more exponential change than ever before in the history of business. The operative word here is “leading.” This can’t be a “do as I say, not as I do” situation. Gone are the days of “talk to my I.T. guy” responses…. All leaders need to familiarize themselves with I.T.
I know it’s hard. Almost everyone born before 1975 will have at least one story of how they resisted technology advancement.
I admit when people started texting I said, “why don’t you just pick up the phone to call me?”
My dad is 72 and said he resisted microwave ovens when they first came out.
I talked to the CIO of a large insurance company who said he resisted “pay at the pump.”
These stories are pretty common among late Gen Xers and Baby Boomers.
But the world around us is not going to wait until we adopt I.T. Today… it passes us by. And as leaders, we can’t leave our companies at risk like that.
What do you do? Embrace technology personally.
My top three recommendations leaders should do to personally embrace technology:
- Get your head and arms around your company’s technology: Spend time with your company’s software, especially your firm’s core application and CRM. Use it like the users use it. Understand firsthand how workflows operate. Know how info gets entered and look for inefficiencies. You have to get a feel for life “on the front line.” WWI (roughly 3.3 inches from the L.A. border on our map above) is a perfect example of leaders detached from the front lines and led millions of men to their death because they couldn’t see how outdated their tactics had become.
- Study I.T.: Understand “networking 101.” Know the fundamentals of security, user experience, and advanced technology trends. This may be the best investment you can make in your bank’s future. Learn how the questions around the future of I.T. are changing. You must absolutely learn what blockchain is and how you could partner with a FinTech to begin using it in your community bank. If you don’t act soon—like, within the next 18 months—it may be too late.
- Use it yourself: Maintain a constant pursuit of employing technology to improve your personal life. Experiment with:
- Health and diet apps: My Apple watch actually tells me to breathe, yes breathe. I’ve found it surprising how shallow my breaths are before I’m reminded to breathe deeply. The app also counts steps and calories, and reminds me to stand up every once in a while.
- Uber: Worry-free travel has become so simple it’s dumbfounding
- Amazon: I bought the Prime service so I could get my 15th anniversary gift shipped next-day—saved my life
- Pandora: I teach it to play my favorite songs from my favorite genres
- Twitter: In a busy world, I can see all my news and entertainment in a few swipes and 140 characters
- LinkedIn: I know you before I meet you
As you adopt technology, people around you will take notice. Your I.T. credibility will shoot through the roof. You will become a do-as-I-do leader. Best of all, you will be able to put your bank in the best position for the future.