Innovation: It Takes Guts to Envision a Future That No One Else Sees

Innovation takes guts

My experience teaches me that people fear “change” and “doing things different” because of uncertainty of the outcome. Fear is what stops corporate innovation. Fear of job loss, fear of losing, fear of being called a loser, fear of being fired for wasting resources, fear of losing your team’s respect, fear of failure. Fear. It’s natural, but needs to be conquered in order to win.

Courageous leadership is a cure for the fear to innovate. As a leader, sometimes you have to make the tough decisions, buck the trends while still understanding the data, and create a future that others may not see yet.

Product Innovation

My experience teaches me the keys to product innovation are to create disruptive products or “blue ocean” products that meet consumer quality drivers concurrent with meeting minimum required performance standards for the business.

Service Innovation

Exceeding customer expectations takes a company to build a collaborative ecosystem between executive chairman, employees, consultants, distributors, and suppliers that obsesses over the customer, and reinvents the service level standards to consistently deliver memorable buying experiences.

Process Innovation

My experience teaches me challenging existing hypotheses or “how we do things here” takes sponsorship and championship from leaders, cascading communications to the workforce, empowering managers and workers with the tools and knowledge to improve effectiveness and efficiency, and celebrating process excellence achievements.

Management Innovation

Management innovations require a leader who can naturally persuade, influence, and negotiate expertly. Further, it takes replacing binary thinking with critically integrated design thinking.

Open Innovation

Success in working beyond boundaries, collaborating globally, leading in a multicultural environment, managing in a matrix organization setting, and influencing a cross-functional team dispersed throughout the world takes having a bias toward action and a willingness to take calculated risks, along with the ability to read people, win followership, and garner success through others.

Value Innovation

I have found that enterprises that focus on value innovation execute a small set of competencies consistently and very well such as:

1. Win by focused execution
2. Deliver world-class buying experiences
3. Create disruptive solutions to compete or innovate to chart uncontested waters, making the competition irrelevant
4. Earn and use social currency wisely
5. Foster an atmosphere where people enthusiastically bring their whole self to work.

Key Challenges Facing The Global Financial Services Industry

Key Challenges Facing The Global Financial Services Industry by Kimble Lewis & Company

Let us jump right into this. I recently was asked what were some key challenges facing the global financial services industry for 2014 and moving forward.  I wanted to share with you Kimble Lewis & Company’s insights on this important issue.

#1. Increased costs in being agile and resilient, achieving compliance with a dynamic regulatory environment:

• Asset Management Reforms such as the Alternative Investment Fund Directive, which require managers to obtain authorization, meet on-going operating conditions and comply with transparency and reporting requirements.
• Banking and Capital Markets Reforms such as Dodd Frank Basel III Bank Regulation Federal Reserve, the most significant revisions to regulatory capital for banking organizations in years.
• Here is a clear one pager on the US Regulatory Agenda.

# 2. In this low-interest rate environment, increased regulation climate, and ferocious global marketplace, there is a need to find new profitable ways to delight consumers, increase revenues, and build enterprise efficiencies.

#3. With M&A, key challenges here are:

• Leveraging R&D and IT investments to increase customer loyalty, if completing a merger, divesture, strategic alliance, or acquisition.
• Taking care to ensure business unit strategy is married to M&A objectives.
• Having foresight to know achieving cultural integration is equally important, if not more important, than winning cost, operational, and revenue synergies. In this high-speed M&A climate, as part of the strategy, firms that focus on building, defining, and adopting high-impact behaviors across the newly combined enterprise improve their chances of having success.

#4. Defining and achieving key performance indicators (KPIs) that are relevant to the firm realizing profitable growth in the short-term, while establishing structure to achieve long-term and consistent growth, profitability, employee engagement, and consumer promoters (versus passives and detractors as the Net Promoter System identifies).

#5. Creating a dynamic marketing and branding structure that makes omni-channel interactions with consumers profitable now and in the future, meeting globalization and technological demands to the business, and meeting the subsequent evolving consumer expectations.

#6. Deciding to lead, or to follow in corporate and product innovations. We all talk about failure is good, and to fail often and early as possible. However, financial services do have brands that have expected values that can be tarnished greatly if, for example, a major financial services firm was to buck the trend, do something different and fail miserably. It may be easier for smaller firms to be more creative and to fail, but large-size financial services firms are faced with deciding how risky, how creative, and how pioneering should they be, given the risk-return tradeoffs in brand leadership, stock valuation, consumer loyalty, and market growth.

#7. Talent: Growing talent, keeping talent, and acquiring talent. Executive recruiters argue there is a war on talent. My view is the battle should be building, keeping, and expanding employee engagement for the entire workforce. With talent, there is no silver bullet. No one person can be superman or superwoman, and achieve enterprise competitive differentiation all by him or herself. Employees need to be “All In,” with an insatiable focus on delivering world-class buying experiences to consumers, suppliers, distributors, partners, investors, and shareholders.

Learn about key challenges facing the financial services industry and other topics on Kimble Lewis & Company site. Keep up with my latest ideas, suggestions, and alternatives by following my online publication, following me on Twitter @KimbleLewis, and following me on Linkedin.

Sales Leadership and Winning Requires Creativity to Seize The Moments by Kimble Lewis

In October 2013, The Banker Magazine named Citi,

• Most Innovative Investment Team
• Most Innovative Investment Bank for Equity-linked Products
• Most Innovative Investment Bank for Equities and Initial Public Offerings
• Most Innovative Investment Bank for Prime Brokerage
• Most Innovative Investment Bank for Risk Management

A panel of industry experts decided the awards. The selection was based on innovation-focused criteria around transactions, products and strategy. Citi was praised specifically for focusing on delivering “cross-asset client solutions” and the breadth of its franchise enabling the bank to complete “breakthrough” transactions in new markets (The Banker Magazine, 2013).

As a proud alum of Citigroup, a private investor, and business leader, these awards are worth noting and discussion.

POWER BROKER. POWER BANK.

For 20 years, I have built my career in financial services working for some of the most venerable and profitable financial firms on the Global Fortune 500 List. As an alum of Morgan Stanley, Citigroup, JPMorgan Chase & Co., Bank of America, and Capital One Financial, I look to see what these firms are doing consistently to prove my hypothesis:

Creative Sales Strategy + Defining and Solving the Right Problems + Cascading Innovation + Building Brand Leadership + Winning Employee Engagement Creates Breakthrough Sales, Revenue, Cost Savings, Consumer Loyalty, and Value for Multiple Stakeholders.

I derive this hypothesis from experience. This is not an academic exercise.

My experience teaches me that power banks and power brokers establish sales leadership and win by injecting creativity in the midst of uncertainty to shape a reality that is filled with excellence and boldness.

CREATIVE SALES STRATEGY

The case study I am going to use for my article is the work Citi Investment Bank did to win the Most Innovative Investment Bank for Equity-linked Products global award.

Ken Robins, head of equity capital markets (ECM) for Europe, the Middle East and Africa (EMEA) at Citi and his team assessed the market landscape to answer the question – how do we differentiate ourselves and provide solutions to our institutional clients that are relevant, given continued low interest rates across the developed world?

Traditional straight debt issuance is appealing to companies for capital raising purposes in a low interest rate – low coupon environment.

However, why not introduce equity-linked capabilities, given the market has been subdued? Who would be receptive? What would be the pros and cons of such an action? What is the profile of the client that would benefit from this sales strategy in the short-term and medium-term? Are competitors doing this? Should we compete with our competitors or should we make them irrelevant, by charting a new course?

When designing creative sales strategy, these are just a snapshot of questions needing answers. Citi Investment Bank had to ask and get answers to these types of questions to be recognized by The Banker Magazine, a division of The Financial Times Group.

DEFINING AND SOLVING THE RIGHT PROBLEMS

Problem Set:

High credit-rated companies question the benefits of going to the equity-linked market when they could raise capital through straight debt issuance, given depressed interest rates in the developed world.

On the other hand, unrated companies seeking access to fixed income markets, companies seeking to diversify investor base, and companies with volatile stock prices were prime targets. The focus was on  A and BBB rated companies that could get high exchange premiums and low coupons.

Ken Robins and his team defined the challenge this vertical segment faced, measured the impact creative solutions would present to the vertical segment, analyzed the market and industry dynamics to test for the efficacy of their solution, ensured the product capabilities improved the client situation and industry position, and followed simple control measures to ensure the solutions met the needs of Citi Investment Bank concurrent with the needs of the clients.

These are very crucial steps Citi must have taken in order to create the award-winning value in the market and for their clients.

CASCADING INNOVATION

Creating the new and the different is the focus of Citi Investment Bank. After defining the right problem to solve, Citi Investment Bank deliberately chose to focus on a narrow band of corporates that they felt could benefit from their equity-linked market capabilities.

Convertible bond issuance, although not new, was the sexy, relevant, and innovative solution the identified niche needed.

The power of convertible bonds are they offer benefits to the company, whereby the company raises capital through debenture issuance, the company minimizes potential negative perception of its corporate actions from the investing public by issuing convertibles bonds versus equities ( when public companies issue equities the investing public may infer the company leadership and stock holders believe the company’s current price is overvalued ), the company receives exchange premium – the amount of the common stock plus the exchange premium percentage the investor must pay if they choose to convert the shares, and the company maintains control by incorporating call features in the debenture capping upside price movement thus profits, and limiting downside risk.

The power of convertible bonds to the investor include 1) A coupon (despite a low coupon, it is a coupon the issuer must pay) 2) Control – the investor can convert the bond to stock at will and benefit from the company’s rise in equity prices 3) Conversion ratio – the amount one bond can be exchanged for X amount of stock, 4) Profit taking – since the convertible performs like a stock and follows the underlying stock price, the investor has the ability to convert the bond to shares at a price potentially below market value and profit from the spread, and 5) Conservative to moderate capital market instrument because convertibles offer par value if underlying equity depreciates in value severely, and limits up-side if underlying equity value appreciates greatly.

The benefits of cascading innovation are challenging clients to see the world through new lenses and delivering excellence at multiple points, turning clients into advocates and fans. Citi Investment Bank did this eloquently, when they secured $475 million convertible bond for Severstal in September 2012 with a coupon of 1% and an exchange premium of 45%, the highest any European company had achieved in five years (The Banker, 2013).

BUILDING BRAND LEADERSHIP

The awards and global recognition clearly build Citi Investment Bank’s brand image, perceived quality, and confidence clients’, investors’, and employees’ hold in the capabilities of the business.  In addition, company chief executives talk to one another. When you delight an industry and company, you create the opportunity to repeat this because of the need of business to always be competing and seeking competitive and comparative advantage.  Comparative advantage nowadays may be considered a loss art, but companies that do not give up on this important pursuit reap differentiate brand loyalty.

In the case of Citi Investment Bank, the competition – Deutsche Bank and RBC Capital Markets – could have done the Severstal deal. However, Citi found a way to sell the convertible story, attractively price it, and win strong sale margins by focusing on comparative advantage.

SALES LEADERSHIP AND WINNING

You can be as innovative you want to be. You can create the new and different all day and night. Nevertheless, without a truly engaged workforce, a winning business culture, and a business climate that supports creativity, success will be sporadic.  Product innovation, in the case with Citi Investment Bank, has to yield better than sporadic success.

To establish sales leadership and to win, companies or teams focus on what can be controlled, focus on execution, focus on taking smart, calculated risks, and focus on beating their competition.  I like the Citi Investment Bank wins because they represent the best in banking.

Banking is about being where the growth is taking place within industries, connecting people and business to opportunities, enabling business and people to thrive, enabling economies to prosper, helping business and people live their fullest potential, and realize their aspirations.

For this reason, I am a global banker, and will always be a global banker.

Congratulations Citi Investment Bank for your success in 2013. May you have many more.

 

Reference

Citi Investment Bank. (2013). Retrieved April 13, 2014 from, http://icg.citi.com/icg/global_markets/prime_finance/au/press_room/2013/2013_10_04.jsp

“Blue Ocean Strategy” for Financial Services

Authors W. Chan Kim and Renee Mauborgne in their published book, Blue Ocean Strategy: How to Make Uncontested Market Space And Make The Competition Irrelevant (2004), argue answers to these four management questions below bring about actions that can help create meaningful Blue Ocean Strategy:

1. Which of the factors that the industry takes for granted should be eliminated?

2. Which factors should be reduced well below the industry standard?

3. Which factors should be raised well above the industry standard?

4. Which factors should be created that the industry has never offered?

Mr. Kim and Ms Mauborgne continue their argument that businesses should focus more on alternatives and less on competitors. Moreover, they argue business should focus more on non-customers or potential new customers and less on their existing customers.

Although W. Chan Kim and Renee Mauborgne make good arguments, some holes in their argument need addressing. The major hole in their argument is business should focus more on non-customers or potential new customers, and less on existing customers.  I maintain businesses can achieve breakthrough margins concurrent with providing world-class buying experiences to existing and new consumers. How? The science of lean six sigma is awesome and can be applied to multiple industries and in multiple situations. CTQ + Success six-sigma approach provides insight on how business does not have to give up on existing customers.

What is CTQ + Success? Critical-to-quality+success are six sigma methods used to 1) broadly, look at multiple and competing factors that consumers require in products and services to delight them, and that businesses need in products and services to deliver in order for them to be considered a success 2) identify critical requirements, understand quality drivers or factors the consumer and the business will use to evaluate the effectiveness and quality of the product or service — for instance, for consumers, product or service must-haves, and for business, size of market, per capita spending, future growth projection  3) define minimum measurable performance requirements each driver must satisfy to be considered high quality 4) use the repository of quality drivers and performance requirements identified to deliver value to new consumers, existing consumers, and for the business.

Let us look at Capital One. A recent management challenge was, how to deliver product innovation and create a “Blue Ocean” situation with the next product for commercial banking consumers, given the saturated existing market with service providers offering everything from treasury solutions to syndicated credit facilities, the precarious regulatory environment, and dynamic consumer behaviors?

Our situation was Capital One brand had a 95% recognition, the “Capital One Bank” sub-brand was weak, client attrition for commercial clients was an aggregate 13%.  We identified the “Blue Ocean” product and service that allowed business owners to earn interest on working capital — taking advantage of the repeal of Regulation Q of the Dodd-Frank Financial Reform Act that prevented banks from paying interest on deposits in commercial checking accounts.  We defined the solution to have two key features 1) high yield on commercial checking up to $100,000 2) online capability; we further defined quality drivers for the business and consumer for each feature. For example, one quality driver for consumers was the ease of use with using the solution on the internet and remotely. One quality driver for the business was the ability for the solution to generate, on the short-term, quantum growth in 90 day average deposit balances in commercial accounts.

I led a task force that conducted exhaustive environmental scanning and business analysis to eliminate factors we took for granted, to reduce the weight of factors we traditionally felt consumers valued, to increase the weight of the factors consumers told us needed to be above industry standards, and to identify the features and benefits of a product that will make it innovative.

Our contribution to product innovation was integral in helping Capital One Commercial Bank achieve double-digit growth in new client acquisition, increase product penetration with existing customers, improve average balances in commercial accounts, and enhance brand equity for Capital One’s Commercial Bank, by charting new waters and being the only provider of this type of product for several months.

Now, notice above I shared we defined quality drivers for the business and consumer. This was the creative part. Normally, CTQ+Success six sigma methods are focused on the consumer, or one stakeholder. We needed a solution that was bold, creative, and that differentiated Capital One Commercial Bank, putting it in uncontested space.

The CTQ +Success approach in business can be applied to meet mandates of both the business and consumer. The consumer and the business are interdependent and are not mutually exclusive. It takes time; it takes creativity; but, when done right, the rewards are impressive.

The weak point to the Blue Ocean Strategy is it throws the existing consumer under the bus. Nowadays, consumers are more sophisticated than ever and make, on average, 75%-85% of their buying decision prior to actually buying.  Given this paradigm, it’s more important than ever for businesses to 1) focus resources  on growing existing relationships through meeting existing consumer needs 2) attract new consumers by using resources and capabilities wisely, and 3) make sure consumer and business performance requirements are met to deliver high quality solutions to new and existing consumers, and to grow the business’ brand equity.

How to Win During Your Business “Slow Season?” by Kimble Lewis

This important management question impacts multiple industries. Experience has taught me that during the “slow season” (whenever it occurs for your industry) it is important to focus on one key item: Creating and executing a differentiation strategy. For example, in the financial services industry where competition for institutional and private clients is fierce, the summer months and holiday season typically are slow. Seemingly, it feels everyone is on vacation or not thinking about doing business. Leaders, teams, and companies that focus on flawlessly executing tactics that achieve differentiation win in the long run. Some ideas, suggestions, and alternatives include 1) launching a disruptive product that peaks interest and one that the competition has not offered 2) delivering solutions innovatively to make doing business with you easier versus competition 3) improving high touch client experiences to make clients feel they are the most important person in the world. I call it the Zig-Zag effect. You zig while everyone else zag’s. The result can improve your brand leadership, increase sales revenues, and, when all mixed in the pot, translate to increased perceived value by consumer.

Happy Holiday Season.

The Great Repeatable Business Model

My Failures in Business and Lessons I’ve Learned by Kimble Lewis

“It’s fine to celebrate success but it is more important to heed the lessons of failure” — Bill Gates

Yes, I have failed in business. I would not be successful if I truly did not. However, I take a failure to fame perspective that enables me to find opportunity in failure and seize it!

I failed in judgment and influence when I worked at Morgan Stanley, Citi, and JPMorgan Chase. In addition, I let success get to my head.

Lessons learned: Effective and efficient management and leadership requires a focus on winning, a focus on creating a climate for success, and a focus on building employee engagement.

I failed to galvanize my larger team to support my vision 100% before expecting them to fully support the strategy and execution I championed.

Lessons learned: High – impact leadership and results involves over-communicating to teams and employees, developing followership, and empowering employees.

Smart Risk Taking by Kimble Lewis

Smart risk taking in business and in life involves following a set of values that govern activities to produce desired outcomes. How you achieve the desired outcomes is equally important to what you achieve.

Kimble Lewis, Delivered at Capital One’s Annual Enterprise Strategy Meeting in NYC, 2012.

Most important lesson I’ve learned in business. What is Yours? by Kimble Lewis

Courageous leadership is important to deliver shareholder value, grow market share, delight clients, and build an engaged workforce. This is true if you are in leadership. But, what if you are downsized and have to accept a lesser role? I’ve learned never to short change your personal value or PV. You are your best advocate and your ability to quantify and qualify your worth for yourself and others is priceless.

Is Brand Leadership Important to Business? by Kimble Lewis

Decision Problem Overview

Capital One Bank’s retail banking division is five years old, after acquiring North Fork Bank in 2007.  Capital One needs to decide whether its retail banking division, or local distribution as they call it, desires to achieve a brand leadership position or a “just another bank” position in the plethora of retail banking enterprises.  The nature of the decision problem relates to the strategic vision for local distribution.  In Capital One’s case, the triggering events for the decision problem is the acquisition of North Fork Bank, the reluctance to change the personnel, and the lack of clarity from senior most leaders as to the identity of the bank.  Capital One hired some senior executives initially from Bank of America and currently from Wells Fargo (formerly Wachovia) to, I guess, build a banking franchise. But questions remain about Capital One Bank’s value. I have first-hand account of local distribution problems.

Capital One Bank’s challenge involves intrinsically and extrinsically defining its value through identity, as the bank pursues its nationalization strategy with recent acquisition of ING Direct. How can Capital One Bank live up to it professed values of Excellence and Do The Right Thing ?  Why are Capital One Bank employees afraid of winning ?  How does Capital One Bank place its talent in the right place at the right time to produce the right results ?  How can Capital One Bank establish  co-branding communications and activities, where employees learn and know entire enterprise capabilities?  What are the best ways to improve the effectiveness of Capital One Bank’s coaching culture?

The aforementioned problems all culminate to the main problem Capital One Bank faces—How to achieve “brand leadership” (Joachimsthaler, 2012) given its current capabilities?  Currently, as a bank,  Capital One Bank has no identity, despite it’s parent brand, Capital One, that has strong brand recognition.   Identity is the most important aspect of achieving brand leadership (Joachimsthaler, 2012).  Capital One Bank has not clearly defined what it stands for (Joachimsthaler, 2012).  There is no profile of the client Capital One Bank specializes in serving.

Capital One Bank is not clear what business it is in.  Is it a national retail chain?  Is it regional?  Is it an online bank (with recent acquisition of INGDirect)?  Is it a promotion retailer?  Does the bank cater to mass consumers, students, doctors, lawyers, small businesses, middle market firms, large corporate firms?  In its current state, Capital One Bank just exists.  Internally, there is a branding and identity crisis occurring.  Local distribution managers and employees do not have a clear value proposition to tell new and existing customers.  Lastly, Capital One Bank has not clearly, publicly or internally, expressed  what it aspires to be.  In this article, I will discuss the key decision elements-objectives, alternatives, constraints, consequences, and uncertainties facing Capital One Bank.

Objectives Statement

Fundamental and Means Objectives

Fundamental objectives are primary decision-making pointers used to assess the alternatives presented, identify what is most important, and act as criteria to evaluate alternatives (Kopeikina, 2005).  Means objectives or sub-objectives are used to support fundamental objective and are used to brainstorm alternatives (Kopeikina, 2005).  In Capital One Bank’s case, there are three objectives related to the decision problem:

Achieving Brand Leadership

Means objective: Achieve brand equity (Joachimsthaler, 2012) or value of Capital One Bank brand through awareness, brand image, perceived quality, and customer loyalty.

Adopting a Winning Mindset

Means objective: In local distribution, there is healthy competition by having teams compete in achieving key performance indicators.  Minimizing friendly competition minimizes the growth of franchise, shareholder return on investment, and performance based incentive payout to employees.

Maintain effective coaching climate

Means objective: Managers and leaders need to treat coaching as a necessary part of their job function.  Coaching should not be used as a performance management tool alone, but it should be used to develop employees and establish high impact teams.

Alternatives

Alternatives are solutions that can be adopted  to the defined problems.  Corresponding alternatives for the identified objectives for Capital One Bank are — Who can help Capital One Bank achieve brand leadership? How can a winning mindset be adopted and communicated as part of corporate values of Excellence? How can coaching be improved in such a way to improve overall employee productivity and engagement? Who can help Capital One Bank achieve brand leadership differs from the other alternatives because it focuses on accountability with achieving the decision problem.  How can a winning mindset be adopted given the existing culture differs from other alternatives because this option focuses on creating paradigms within Capital One Bank to encourage healthy competition.  How can coaching be improved in such a way to improve overall employee productivity and engagement differs from the other alternatives because it focuses on tactical solutions to improve shareholder value, employee engagement and satisfaction, and customer service.

Consequence Table Analytics

This consequence table has values of 1 to 5 where 1 is worst, 2 is better, 3 is good, 4 is best, 5 is excellent.  The formula for converting values to proportional scores is 100* (actual value-lowest value) / (highest value-lowest value) where the values fall within range of 0 to 100.  Proportional scoring compares objectives with varying measures.  The alternatives 1) brand equity 2) competition,  3) improved behaviors were derived from the means objectives to support the fundamental objectives.  The alternatives represent options or solutions for the defined decision problem. The corresponding values attributed to the alternatives reflect how closely, from experience, each alternative will help achieve the desired objective.

For Brand Equity-Achieving Brand Leadership-100*(5-3)/ (5-3) = 100

For Brand Equity-Adopting Winning Mindset- 100*(3-3)/ (5-3) = 0

For Brand Equity-Maintain Effective Coaching Climate- 100*(4-4)/ (5-4) =0

For Competition-Achieving Brand Leadership-100*(4-4)/ (5-4) = 0

For Competition-Adopting Winning Mindset-100*(5-4)/ (5-4)= 100

For Competition-Maintain Effective Coaching Climate-100*(4-4)/ (5-4)= 0

For Improved Behavior-Achieving Brand Leadership-100*(4-4)/ (5-4) = 0

For Improved Behavior-Adopting Winning Mindset-100*(4-4)/ (5-4) = 0

For Improved Behavior-Maintaining Effective Coaching Climate-100*(5-4)/ (5-4) = 100

Proportional Scored Consequence Table Analytics

Weighted Score Model Analytics

The information above is enough to decide on the course of action to meet the decision problem.  Accordingly, Capital One Bank would benefit to concurrently focus its resources  on 1) establishing brand equity or identity and 2) maintaining an effective coaching climate in order to solve the decision problem.

Decision Tree Analytics

Uncertainty

The uncertainty with Capital One Bank pursuing the brand leadership model arises from its hierarchy structure.  From experience, senior most leaders do not listen to advice from front-line managers or local leaders.  In addition, there have been instances where great ideas were overlooked due to politics.  Capital One Bank is not decentralized. Major strategic changes come down from senior-most leaders to front-line managers. Unfortunately, there is infrequent follow through to ensure flawless execution of strategy. One uncertainty that arises with achieving the payoffs include managers not leading from the front and embracing the change.  Adopting a winning mindset can occur through managers creating a climate for this to occur.

Implementation Plan

Solving the decision problem depends on 1) Capital One Bank admitting there is an identity problem 2) Capital One Bank following a strategy to achieve brand leadership, instituting a paradigm shift  where employees adopt a winning mindset, and maintaining effective coaching with the  goal of improved employee engagement and increased productivity and 3) Capital One Bank desiring to win by focused execution.

Below is a practical action plan for Capital One Bank, highlighting the opportunity, providing ideas and suggestions for seizing the opportunity, and ways to monitor business impact.

Alternative: Focus on Brand Equity

Opportunity: The key to achieving brand equity is identity.  Capital One Bank has the opportunity to shape and reshape its identity to shareholders, customers, and employees.

Approach: Senior leaders at Capital One would be responsible for resource allocations and creating a custom strategy to be executed locally and nationally. Capital One Bank needs its own brand management.

Control: It is important to correlate achieving brand equity to the amount of new profitable clients acquired for the bank.  How to measure this? One way introduced is to use the customer life value approach to measuring ROI on marketing campaigns. 

Alternative: Foster healthy internal competition

Opportunity: Capital One Bank has a huge opportunity to improve productivity and employee engagement by implementing meaningful performance based competition among teams.  Local managers can be accountable for implementing this approach.

Approach: Capital One Bank can use the dashboard of performance to allow teams to compete based on sales, operations, and service. In addition, employee engagement is directly related to employee productivity. To engage employees to do more than what their role calls for, Capital One Bank needs to make doing the basics easier for employees. One way this can be achieved is creating a sharepoint site, for example, that employees in retail and middle market can reference that educates, enables, and eases doing their job, so the focus can be on building relationships, profiling, referring, scheduling appointments, and sales.

Control: Voice of the Associate annual surveys is a strong way to monitor and measure employee engagement with meeting the company’s grand strategies for growth.

Alternative: Focus on High Impact Behaviors across enterprise

Opportunity: Capital One Bank human capital is a valuable resource.  Yet, the quality of employee skills in local distribution is average.  Many employees in local distribution just follow meetings-in-a-box and read internal posts on information.  There is little innovation.

Approach: To achieve high impact behaviors for local distribution employees, a teaching climate needs to be instilled primarily by local distribution leaders (Regional Executives and District Managers). In addition, the old saying “no need to reinvent the wheel” needs to be given up. To create and sustain a high impact behavior culture, a climate that encourages new ideas to existing challenges and that celebrates creative solutions to existing and new problems needs to be fostered. Further, documented coaching needs to occur. Incorporating coaching into performance management for leaders will directly influence the volume of coaching sessions.

Control:  To drive employee engagement, a mix of mystery shops, customer service surveys with questions that ask specific questions on experience, products, and services, and sales per banker per customer session, in the short-term, a good suite of control metrics to use to measure the execution of high impact behaviors.

Conclusion

This exhaustive analysis examined a decision problem of Capital One Bank, which is how to achieve brand leadership?  Objectives of the decision problem included 1) achieving brand leadership 2) adopting a winning mindset and 3) maintaining an effective coaching climate.  Alternatives were analyzed to achieve the desired objectives.  Consequences, tradeoffs, payoff, expected value were all examined related to objectives and alternatives.  Lastly, a pragmatic action plan for Capital One Bank was introduced, highlighting opportunities, approaches and controlling methods.

References:

Joachimsthaler.  E. (2012).  Retrieved December 15, 2012 from, http://www.quisic.com/cgi-bin/ic/ic_article_display.pl?nav=2&channel_id=4&content_id=50

Kopeikina, L. (2005).  The Right Decision Every Time: How to Reach Perfect Clarity on Tough Decisions.  Upper Saddle, NJ: Pearson Prentice Hall

High Impact vs High Performing: There is a difference

There is a difference between high performing and high impact teams. Generally, high performing teams focus on meeting short-term goals and consider looking favorable to senior leaders eyes, measured with their focus and behaviors. In addition, high performing teams have become the new “normal expectation” from leaders in business. Theoretically, there can be teams who are high performing and do not directly impact a business’ bottom line or get any closer to solving a medical problem.

On the other hand, high impact teams focus on achieving organization and structural change, meeting key performance indicators, and influencing the direction of an organization. The actions and results of high impact teams and their members influence the mindset and point of view of stakeholders. Moreover, the actions and results of high impact teams are meaningful and relevant.