4 Lessons from being grounded

Time Magazine's future of work expert reached out a few weeks ago wanting to talk about the future of business travel. Little did Alana know, her questions caused me to think, and rethink, the future of banking. Here are my lessons from the pandemic.

Check your default settings

A quick search of my inbox showed?46 round trip confirmations between American Airlines and Delta 2019. My default is to show up.?I think for most of us in banking, the default is an in-person meeting. “Come to the branch” or “Let’s sit down and discuss your needs” suddenly weren’t possible in COVID. A number of the truth’s we held to be self evident were more like convenient truths?because we didn’t want to, or simply didn’t, challenge the status quo.

If you poll 10 community bankers about their unique competitive advantage, 9 of them will tell you it is their relationship with their customers (disclaimer: this was not a Ron Shevlin or American Dental Association level scientific poll).?This is Lake Wobegon level logically inconsistent; if all of us are above average, what is unique??New tools like digital account opening and loan origination challenge one of our most sacred beliefs: relationship equates to in person interaction. In person meetings are incredibly valuable, but shouldn’t be the default. Digital doesn’t replace, but a supplements, to the human relationship. Blueleaf (disclosure I’m an investor) talks about this as augmentation. The Iron Man suit gives super powers and Jarvis gives super insights with a human in the middle.

We can’t excel if we use the default settings. Default makes us average.

Upping the Operating Tempo

The importance of digital was brought into sharp focus by PPP. Community banks rallied to save Main Street. Small businesses that didn’t know the difference between an income statement and a bank statement were thrown a lifeline by bankers that could guide them through the process. The banks that excelled laid the groundwork with systems, processes, and technology well before the pandemic. Other banks threw bodies at the problem. That worked in the first round. The second round was painful. Many are still recovering after round three and dealing with forgiveness.

Paraphrasing a conversation with Chris Nichols at SouthState bank “traditional approaches to calculating ROI don’t give enough weight to flexibility and extensibility; projects that were a $100,000 but didn’t meet our return hurdles probably cost us millions because we were hardwired when the pandemic hit.”

One of the things most of us are hardwired for is the 1 hour meeting. Pre—pandemic, the in-person default led to many of the Alloy Labs meetings being scheduled a month out. To minimize expense and maximize utility, most banks sent 1-2 people and we crammed as much as we could into 2 days. The inefficiency and ineffectiveness of this approach became apparent in the Zoom world. With 1-2 people in the room, an important decision maker or contributor is inevitably left out. This leads to the dreaded “let me go check or another meeting. The shift to digital meant we could have the right person, at the right time, and for the right amount of time to GST (Get Stuff Done). Alloy Labs routinely has 15 minute meetings, rarely more than 45 minutes, but the frequency increased. Not only are we moving faster, we’re being more effective.?

A surprising insight has been the old adage “move slow to move fast” is especially true in the digital world. We work with a number of boards and management teams on strategic planning. The pre-COVID approach involves a 2-3 day offsite.?The pandemic switch to virtual led us to break 2-3 days into 2-3 hours spread over multiple days because nobody wants to do an 8 hour Zoom. The results were astounding. While sometimes there is no substitute for in person collaboration, spacing it out allows for more data and thoughtfulness to enter the process. Rather than operating on assumptions like “our most profitable segment is X” the data can be pulled and analyzed. Fact rather than belief drives the process. True hypotheses can drawn up and tested rather than the entire exercise operating in the hypothetical.

Importance of Presence

The drive to digital upped the operating tempo but doesn’t displace the importance of in-person. I’m writing this on a flight to spend 2 days with my best friends of 25 years. While many males stereotypically are relatively detached, the 3 of us speak or FaceTime almost daily. That doesn’t change the need for literal facetime. That face time is meaningless, however, without presence.

The tension between countless meeting, speaking engagements and conference with my desire to present as a father meant lot’s of first or last flights. Most trips I tried to either leave after dropping the kids at school or be home for bedtime. My body was there but I wasn’t always present. Showing up is not the same as being present. Ironically, technology is the double edged sword. The distraction of phones in meetings or co-browsing during a virtual meeting is obvious. What we miss without a level of intentionality is that showing up physically with that small business is only so valuable. Showing up with data and insights, digitally and physically, that is presence.

We’re All Human Here (even digitally)

I write about personal things, even in my business writing, because I believe in transparency. When not traveling, I take care of the the day to day logistics with the kids. I take doctor appointments, drop offs, and stay at home days wherever possible. Our goal was to break both the stereotype and workload attached to gender stereotypes.?

Pre-pandemic I would apologize when I was home with a screaming sick child while on a call. The moms’?nodded knowingly and patiently while I tried to bounce and talk because they’d suffered silently for decades doing the dance like parenting isn’t a messy and disruptive business.?The Zoom bombs of kids and pets make the digital world not only tolerable, but better. Whether you have kids, or even want kids, our lives our messy. I’ve seen the couch you’re working from!

Banks and bankers can present themselves as pristine and finely pressed. One of the joys of COVID is seeing CEO’s I swore slept in khaki pants and a blazer show up at a meeting in a hoody. For our customers, how off putting is the illusion of order when they feel their house is in disorder? My life is not neatly pressed and industry data says 84% of America is in the same boat.

Two of our member banks emulate this in very different ways. Sunrise Banks is a community bank in my childhood backyard. In the 90’s they operated in blue collar, predominately white, neighborhood that became a nucleus of Hmong and Somali immigrants. When David Reiling took the helm, he realized the bank wasn’t representative of the people they now served. Sunrise Banks made a deep commitment to live community and you can see it anytime you walk into a branch. Julie Thurlow and Reading Cooperative Bank went the opposite direction. Reading is an affluent suburb of Boston but the front line workers come from former mill towns across the river that are hubs for immigrant communities. Reading Cooperative went the opposite direction of Sunrise Banks and went to where their workers are. Both recognized that importance of that human connection. Side note - both are doubling down on how the empower that digitally.

Even in the middle of a pandemic there are silver linings. For me, that was a total of 3 round trip flights and 4 nights in a hotel for 2020.??