“It isn't what we don't know that gives us trouble, it's what we know that ain't so,” said Will Rogers.
Susan Olago knew she was in trouble. The once-respected Red Oak Bank was six months away from being insolvent. Not wanting to be a sacrificial lamb, as the newly appointed CEO, she knew she had to take a bold action.
“Act more like a start-up and less like a bank,” became the new CEO’s mantra.
Susan understood from her world-class banking experience in Boston and Singapore that doing a template ‘fill in the blanks’, rolling operational plan was not a strategy. She had to bring the dispirited managers on board, with a high-engagement approach.
Today’s two years were like a span of 10 years in the past. Her ‘act like a start-up’ strategy stood on three pillars: customers, technology, and people.
Think differently – like a start-up
Red Oak Bank was in a rapidly changing digital landscape. The need was to cater to a new generation of tech-savvy customers by transforming into a digitally driven bank.
To meet the challenge, top management sought inspiration, not from other banks, but from the tech giants.
The aim was to leapfrog, from long lines of disgruntled customers to shaping the digital future for the bank, based on learning from leading global tech companies.
The vision was clear and simple, "Make banking fun." The focus was on being agile, using start-up-like design thinking, and asking – What does the customer want and need?
Be like a creative designer
In strategy, Susan saw herself more as a designer, an architect, following the maxim ‘form follows function’. In business, decide the strategy, the form, and create the function.
For instance, the structure, skills, systems and organisational culture around the central pivot point value proposition.
Consultants were useful in providing insights and a wider perspective, but the unit business plans, which provide the building blocks for the overall corporate strategy, had to be owned and had to come from the line managers. High involvement, co-creation, and getting managers buy-in was the operating principle.
Simple indicators of performance
Indicators of performance were kept simple and clear.
Red Oak Bank adapted an OKR – objectives, key results approach. After all, if the OKR ‘measure what matters’ worked for Google and Boeing, it would work for the bank.
Deadly simple, objectives described the ‘what’ of what needed to be done, and the maximum of three to five key results outlined the ‘how’.
Each key result was measurable and time-bound, appearing on an updated weekly, visible to all managers’ dashboards.
All on one page
Every staff member, including the empowered tea person, was given a one-page graphic summary of the bank’s approach.
Yes, some of the secret details of the strategy were omitted, but the power of having all the staff in alignment was clear.
Highly engaged staff
On the people dimension – her senior management team of seven and the managers in the branch network had at times in the past been treated more like errant children.
Susan soon noticed that below the shroud of disappointment, the managers were energetic, open and full of ideas.
Weekly candid meetings with the senior management team became standard practice, along with frequent town hall meetings with the branch managers and customers.
Traditional every six or 12-month performance appraisals just didn’t work. All managers were required to check in with their staff through weekly conversations, providing positive encouragement and catching issues before they erupted into a volcano spewing a stream of lava-like problems.
Staff engagement and business issues were closely monitored every four months in a confidential online survey, with the ideas and issues visibly addressed.
The link between levels of staff engagement, and financial and operational performance became clear.
Viral word of mouth
No, it wasn’t easy. Thanks to a genuinely distinctive strategy and an ‘atomic habits’ like every day, tiny steps forward approach, with the management team pulling together, taking a ‘good book – bad book’ approach, the loan portfolio was gradually cleaned up, and the balance sheet strengthened.
Viral word of mouth took hold, customers told their friends and business associates about Red Oak Bank. “This bank is helpful and actually listens” was a much heard refrain. Customer numbers soon doubled, from the once small base of disgruntled clients.
Susan relished being seen as a start-up like disruptor, seen by some to cause trouble. She remembered the words of Irish singer Sinead O’Connor: “I don't do anything in order to cause trouble. It just so happens that what I do naturally causes trouble. I'm proud to be a troublemaker.”
