Diagnosing a Bank's Dying Digital Transformation

A Story About Course-Correcting a Failing Digital Transformation at a Big Bank

Carol Hurwitz-Broadstein now runs the customer experience (CX) part of a sizable bank in Boston that has been going through a sluggish digital transformation initiative for the last 12 years (that’s not a typo).

She has been with the company for 13 years. She started as a Customer Service Rep in the call center, on the phone, talking to aggravated customers all day. After three years on the front lines taking the initiative to gather and escalate valuable customer insights, she was promoted to a new position. It was an experimental, three-way liaison between Call Center Operations, the e-Services Group (responsible for the web site) and Corporate Communications up at HQ. After connecting those areas for 7 years she was again promoted — this time to SVP Customer Experience — where she sits today, responsible for enterprise customer experience.

“For years, I was like a duck-billed platypus,” she claims “…used to go to a million conferences a year and never ever ran into anyone else with the same title, role or responsibility. When I was talking to other customer reps at other banks I kinda felt like I was screaming into a giant cave. Today, geez, we’re a dime a dozen.”

In the recent past, she was put on a team to direct the bank’s Digital Transformation initiative.

“For years, we’ve been trying to design an axis shift from a current product-centric view, you know, checking and savings, to a more deliberate customer-centric view — like actually paying attention to how our customer’s relationships with their money is evolving and designing ways to serve them with better experiences across our product plane or with newer product or service innovations. It’s a big job. Ever hear about that guy, Sisyphus and his giant rock and that never-ending hill?”

A year prior, she was tapped to become the new leader of the bank’s 12-year transformation effort.

“Oh God, I was called up to the Executive 33rd floor by Mr. Kaplan’s assistant to discuss my new appointment. I was nervous as hell.” she went on to say, “Long story short, I left with a new to-do list from the CEO. All he wanted me to do was:

1. Finish and sunset the Digital Transformation initiative by the end of year;
2. Solidify “digital customer experience” at the bank;
3. Develop a Customer Experience Management Center of Excellence.”

“Cool, now I’m down to only four full-time jobs, that’s better than it was yesterday!” she whispers, as she’s jog walking to the elevator on her way to the second of eight meetings she’ll have at up at HQ that day.

The very next day on her way to work she was scrutinizing the executive directives as they were stated to her. She realized that she wasn’t really given an opportunity to give any feedback on the CEO’s wish list. But, she had a few ideas that were exciting.

First, she thought setting up a CX CoE was a terrific idea — it was actually her recommendation three years prior that finally just got funded. Second, “solidifying” CX at the bank should actually be part of the CoE and not a separate initiative. She knew that if she was in charge of it, she could successfully integrate those two without any problem and have one fewer separate initiatives to manage while consolidating the funding and resources. The sunsetting Digital Transformation mandate was the one she was really having a hard time reconciling.

It made no real sense to her. It sounded like it was a recommendation from a board member or at the very least, an attempt to cut costs for something someone on the 33rd floor believed ought to have a concrete end.

In her mind, transformation, if you were doing it well, never really actually stopped. She felt strongly that transformation was a bad word, corporately stigmatized, that referred to something that was mission-critical — no matter what it was called.

She knew she would need to fight that one but find a good way to keep the essence of it alive and breathing.

“I will have to stage it’s death and then put Digital Transformation into a witness protection program.” she laughed.

“I just agreed, to finish it, or sunset it as they called it.” she boasted. “But in spirit only. A bank our size should never stop evolving to better understand and serve its customers with digital.” She went on to say, “I am simply changing the name from Digital Transformation to the CX Shift which in essence is the digital customer experience.”

What Carol did was smart. Semantically, the bank reacted poorly to the term Digital Transformation. It brought up feelings of a slow-dying initiative that was expensive and without direction. While some important changes had taken place under its reign, it was poorly planned and never really aligned to the corporate charter.

“The goals of the Digital Transformation Effort were ambiguous and its leadership was a revolving door of unsatisfied middle managers whose visions were dashed by the aged and conservative pragmatism of the 33rd floor.”

The first thing Carol did was look back at what was wrong with the previous Digital Transformation initiative. She needed to find the best way to reap the rewards of change without it feeling like or being referred to as a “change” or a “transformation.”

“There were a lot of things going on that made the Digital Transformation initiative more complex than it needed to be. There were a lot of lessons to be learned. We just weren’t poised to learn them.”

“There were too many focal points of change. If you can simplify multiple programs into one focused initiative, you’ll already enjoy your first quick win.”

Here is her list of lessons or take-aways:

• Change is a human concern, not an IT game.
• We’re conflating customer service with customer experience. They’re two separate things. When we mix the two, we give ourselves permission to believe that traditional customer service is covering all the bases in the customer’s mind. It isn’t.
• The bank had never articulated why a transformation was necessary. It was loosely and hastily funded because all the other banks were doing it.
• The bank’s rules for engaging customers online needed to be captured and tied to the transformation effort — but never were.
• They should have installed a Center of Excellence around Customer Experience at the onset of the transformation. They should have taken a thoroughly outside-in perspective into account. The effort should never have been solely about IT updating its infrastructure. That was perhaps the biggest mistake of all.
• There was a significant lack of measurement. They needed to install sound measurement tools and consistent methodologies to measure satisfaction and qualitative metrics in addition to the easier to capture quantitative and revenue metrics.
• They needed to weave internal and external communications into the effort, which was never considered. No one knew what was going on. Management never understood that talking about this with front line employees was necessary. There was a “need-to-know” basis for all change which was way off the mark and a bit arrogant.
• They needed to tie the initiative in with marketing, product development and the other areas of the bank. Most obviously, on the digital touch point side of things, they needed to become gradually okay with putting less content about generic products on every page of their website and start making room for content their customers actually valued and could use.
• They needed to prioritize ‘customer needs awareness’ and their pathways to happier experiences across all channels. No one analyzed the tasks people want to accomplish or the paths they take to accomplish them.
• They needed to share a lot more knowledge about the nature of and methods to change across a lot more areas of the bank with a lot more frequency. People critical to any change were left in the dark.
• They needed to collaborate around content like they never had before. After all, at its core, it was about better understanding customer’s needs and serving them with that better understanding.
• They needed to learn how to talk to and listen to the employees involved in the change much better than had been the case. Feedback loops.

Carol boiled it all down to this,

“Look, when it comes right down to it, we forgot about the friggin customer and the employee that serves them. We were too obsessed with mobile security or SaaS infrastructure planning or Enterprise Architecture Enhancements to the exclusion of the customer.”

Almost angrily, she exclaimed, “In the last three years our retail deposits were down 18% on average, our mid-market product margins were down 31% and our large, corporate business was down 33%. And at the same time, we are on our fourth innovation manager.

"God bless the poor new one! Everyone is looking at him real big eyes, like they hope he’s Jesus or some other miracle factory.”

The Following Year

A year later and after one year of battling bank executives with solid clad arguments full of research, math and survey results, Carol had made giant strides.

Her smartest move was to simultaneously meet all the CEO’s end goals while at the same time, merging all the initiatives into one larger, simplified program called The CX Shift. “It’s all about Simplification, Focus and Discipline and I have to say, at least these dudes listen to math, survey results and business intelligence.”

“One of my most challenging tasks was dealing with a bank culture of decision leads that had become really good at talking about the quality of the IT infrastructure and the generic products across the web,” she said. “Don’t get me wrong, IT infrastructure is critically important and marketing our core product line is also totally critical, but it’s not more critical than figuring out how to stop my customer from going across the street and opening a business account with Chase. We had our priorities all wrong.”

“Also, all the people that were to be involved in this change had, up to that point, worn deep grooves in the carpet between the product marketers and the web team with plans to keep shoving even more boring information about boring products down uninterested customers’ throats. I mean, literally, you think I’m exaggerating, but there were grooves in the carpeting.”

“And man those grooves were deep,” she mentioned. “Where the carpet used to be least worn was between the corporate communications team, web analytics team, our new Business Intelligence folks, the Customer Experience Strategy team, our new UX design team, and the new Voice of Customer people. “That’s now changing, I am very proud and happy to say.”

She laughingly interjected, “Look, I’m a chick who likes paths less travelled and I like to get stuff done!”

She went on to say, “When we open our eyes, shut the hell up and just listen to our customers for a second, we begin to learn a few things;”

1. Our customer’s’ relationship with money is changing really fast. They don’t need banks anymore, they need banking.
2. We can no longer rely on the products we created half a century ago to beam us up into the future. We’re being disintermediated or edged out of virtually every touchpoint we have with our customers by faster, smarter and more convenient mobile money management apps.
3. Our customers need us to be more valuable and convenient. Bottom line. We have to combine Customer Experience, Innovation Management and Business Intelligence together if we want to meet their evolving needs and compete. We have to start making things people actually want.
4. They say the three most important things in business are location, location, location. Not true in banking anymore. We have to personalize, personalize, personalize. With hundreds of terabytes of transaction data that’s getting awfully dusty. We need to leverage the hell out of that to remain competitive. The fintech disruptors building banking apps don’t have that…yet.

When asked, what advice she had for people inside banks who have assumed control of a less than successful Digital Transformation initiative, she had these points of advice.

1. Stop calling it Digital Transformation.
2. Get the organization to begin creating new patterns of collaboration.
3. Make sure that the things that need to be “transformed” are given the right opportunity to succeed in transforming. Be clearer about what it is and why it needs to change and how you plan to change it and what it will look like when it’s done changing. Otherwise don’t call it change or transformation call it business as usual. I'd recommend calling what it is at its core: it's really a CX Shift.
4. Get the advice of someone that has done this before. Don’t take all their advice because they don’t know half of what you know, but make them your outside sounding board.
5. Pay attention to the Three Silent Killers of Digital Transformation. Silent, because many companies undergoing real change or transformation typically ignore or dramatically underplay their significance. Killers because when they’re not in play, they’re capable of killing any organizational change effort — nearly always do. The Silent Killers are:

• Lack of an employee engagement/empowerment program
• Lack of an internal strategic communications platform
• Lack of content strategy and dynamic, personalized content

“You have to sit down with your IT leader peers and an executive sponsor that you both ultimately report to and get them to understand that hardware and software work for humans not the other way around. You must explicitly state this fact and get full agreement on all sides."

“If you don’t get the captain to nod, you’re looking at choppy waters and almost certain death. You have to start preparing for content that people value. Internally and externally. Content is your magic bullet, if there is one. It’s the stuff that motivates action. Yep, I said content.”

“I know there are a thousand geeks out there that are a million times smarter than I am who’ll point out that Digital Transformation is IT. And they’d also argue that it isn’t as much about people or content or communications. I can see it now."

"But they’re wrong. They’re BOTH mission critical. One shouldn’t dramatically outweigh the other. From what I have gathered over the years is that technology is easier to deal with than people. Who wouldn’t want to take the easier path? Hell, we’ve been doing it the wrong way for decades.”

“Ask Deloitte or Accenture. Half of the houses in Long Island’s South Hampton are paid in full due to that old way of transforming. Worked out great for the consultants.”

She went on, jokingly to say, “Even though I’ve walked through the valley of the shadow of transformation death, I have seen too many casualties and really believe the reason so many banks like ours screw it up is because we overlook the human side of it. At the core it really is a human issue and a human problem.” She went on to say,

“Think about it, you have humans working with other humans trying to figure out how to change human behavior so that our humans understand and better serve other humans. You want to tell me this isn’t a human problem? Technology is a really important enabler. We’d be dead without it, but on the flip side, we’re dead anyway, if we allow it to become our focal point of change. You won’t be able to persuade me otherwise — not after all we’ve been through.”

Carol is a unique executive in a unique field. She’s working in a very conservative industry. She is pushing all the buttons to get as many decision-makers to “wake-up” as she can. While highly opinionated, she has a calmer, coalition-building side of her that gets people on her side. She knows being misinterpreted means being marginalized which would be certain death for her causes.

In closing she made this final point:

“This is a really challenging job. When I first started in this role, the head of Enterprise Architecture said that I was treating the bank like it was my $44 Billion “dollhouse,” and that I wanted to unplug all the computers. Nothing could be further from the truth. My only soapbox has been to stop undervaluing the human side of progress — let’s all acknowledge that what we’re trying to do is understand and communicate better with people. And while we’re there, let’s also acknowledge that we cannot do anything without technology."

"The smartest companies are those that seek perpetual harmony from both the human and technology sides. They require the courage to lead themselves out of patterns of comfort, status-quo and predictable precedence. How others did it before isn’t how we’re going to become great, it’s only going to help us cope with our fear.”