“It’s Hollywood!”, my grandfather said as he watched the first man land on the moon. “That’s not really happening.”

From the viewpoint of my grandfather who still owned the horses on his farm till the day he died because he did not trust that tractors were really the wave of the future, a person on the moon was beyond his scope of understanding. 

That situation is not very dissimilar from the current state of banking. Most banks are experiencing great profits on lucrative spreads and they are holding onto the horses while financial services companies are moving on to four-wheel drive turbo charged tractors.
The problem is that what creates profits for banks today will probably not create profits in the future. Logic tells us not to change things when things are going well. Trends point to disaster if you don’t.

The new trends are so complicated and threatening that is much easier in this time of solid performance in banking, to ignore them hoping they will just go away. Smart leaders are analyzing the trends, deciding which create the best opportunities, and are building the foundation for upcoming crazy times.

Here are some suggestions for you to focus on in creating your future.

1. Resist the temptation to take your bank apart one brick at a time
   Most banks right now are taking their banks apart one brick at a time. By jumping fees and widening spreads, they are milking their customers for more profits. Unfortunately, many of those customers are leaving and taking a brick with them. Banking is one of the few industries right now where higher costs are passed on to the consumer. Most industries are reinventing themselves to improve efficiencies to enhance their competitive advantage. The media coverage proclaiming that bank fees are exorbitant is prevalent and growing. The “huge-spread-higher-fee game” is close to over.
   Smart banks are building and growing their business. They are adding bricks with less focus on spreads and more focus on bringing profits in from growth and efficiencies. They will be positioned in the future to work off smaller margins because they have accomplished economies of scale. They’re taking your bricks and will soon build a shrine to your history. Growth through acquisition is simply prolonged denial of the real state of affairs that banks have not learned how to grow.
    
2. Create an identity
   With technology leveling the playing field, consumers in the future will choose banks based on convenience. Location will significantly lose importance as Internet banking will level that playing field. If you are perceived as a commodity, your pricing is the only area where you can compete and that is a losing game.
   
   Position your bank by either a niche market that you serve, a style of doing business such as speed or customer service or financial planning, or unusual products. History has proven that niched businesses are more profitable than generic businesses, and location, which was the niche for most banks in the past, will be closer to inconsequential in the future as generation “X” does banking on the Internet.
    
3. Change your focus from customer satisfaction to customer success
   Banks still see themselves as being in the transaction business. If you call for rates for a CD, the best that most banks will do is offer a rate. If someone has the need to invest money over the long term, they probably have financial goals or need help identifying their financial goals and meeting them. If the focus shifts to helping CD investors plan for retirement by being given a projection of required deposits to meet their goals, that customer will stay with you regardless of small pricing differences. Instead of simply supplying a loan to a business customer, focus on making their business and owners more successful by thinking of ways that you can find customers for them, ideas for making their business more effective, etc. When your customers are satisfied, they’ll still leave you for a better rate. If they are successful because of your help, they will stay with you for life.
    
4. See yourself as a financial services business instead of a bank
   One bank CEO was telling me recently that his bank was doing quite well. He proclaimed, “Compared to my peer group, my growth of 3 percent was fairly good.” I wasn’t sure there was a subtle way to tell him that while his banking competitors weren’t growing at a healthy pace, he also would have done better had he locked the doors! While the banking industry is laying off hundreds of thousands of employees, non-bank financial service firms are hiring hundreds of thousands to accommodate their growth. The perfect analogy is to the railroad industry where they didn’t understand that they were in the transportation industry while the world found ways to do business without the railroad industry. The March 1995 Inc Magazine dedicated an entire monthly issue to proving that banks don’t meet the needs of the future. They showed a list of options and proclaimed that there was no need to ever work with a bank again!
    
5. Learn to learn
   Research from the American Society for Training and Development found that the highest return on investment that companies received was from dollars invested in educating their people. Technology followed as second. So, why are banks investing in buildings–clearly the least profitable investment?
   
   It isn’t enough to learn to learn. It is what you are learning that matters. In the past, people simply had to learn what to do. Now we have to teach them how to think. If credit scoring dictates your loan decisions, you may as well just replace your lenders with machines. Good loan decisions are based on intuition of ability to pay back and the integrity and desire to pay back. Intuition comes from having a wide base of knowledge from focused learning.
   
   As important as learning is unlearning. Bank personnel are traditionally miserable at this. More than any industry, bankers are married to the old ways of doing things.
   
   Turn your organization into a learning organization. As we shift from the industrial era to the knowledge economy, the winners will be the organizations that have invested in learning.
   
   If you are still using the old models of business like the old models of strategic planning, managing by objectives, and the other “be-all-end-all-answers” of business schools of the past, you will find that the employee of today is far too sophisticated to be managed by control freak techniques. Instead of managing by fear, we need to unleash people by creating a powerful vision that allows for them to think outside the box of the archaic job description model to create extraordinary results by creatively finding ways to align with the vision of the organization.
    
6. Create a powerful direction
   I’ve yet to meet a bank employee who was highly motivated by the weak mission of most banks. They all look the same: To be a leading provider of banking services in the area by offering high customer service, quality products and an above average rate of return to share holders. Woah! That gets my blood flowing! Successful visions drive outrageously successful behaviors. Bill Gates had a vision of a computer on every desk in America. John F. Kennedy proclaimed we would have a man on the moon by the end of the decade. In retrospect, both visions were bold, completely unrealistic, and considered impossible...and they inspired people to stretch and work and aspire beyond their wildest imagination. They were on a mission. A real one.
    
7. Burn the budget
   It’s ridiculous to think in this day of age that a business budget can be maintained from the beginning of the year to the end. While one bank said they couldn’t do training until the beginning of the budget year, a competitor seized an opportunity by training their people immediately with an astonishing return on investment.
   
   Research was done of companies that thrived in past decades to find out what worked. In the 60s, it was the organizations that could manufacture well. The 70s was the era of where great marketers reaped the profits. The 80s was the quality revolution. In the 90s, it’s the innovative companies that can get to market first with a new product that reap the profits.
    
8. Learn the new model of sales
   Our research based on our study done over the last 7 years revealed that when rate inquiries come into a bank, there is an attempt to sell by offering to send something, offer to help or a suggestion for an appointment less than 2 percent of the time. There is not another industry where the sales effort is less systematized, learned and followed through.
   
   When I started in the banking field a million years ago as a commercial lender, my company sent me to a sales course. We learned how to manipulate people into saying yes. I learned the strategies but my gut always said, “Don’t do it. Something’s wrong with that approach.”
   
   Years later, I figured it out. I would know if someone was manipulating me and I probably wouldn’t go back for a second purchase if someone twisted my arm to get the first sale.
   
   Teach your people how to ask questions to find out about your customers' needs and fears are. Then simply recommend a process of investing or borrowing that meets those needs. Done. End of story. There is no need to manipulate. There is a need to help people and that is all sales really is.
    
9. Hide from other bankers
   As I was addressing a bank CEO conference recently, I was struck that as I looked out, they all had the same suit style on. It hit me as humorous because if I present for a Fortune 100 company, there are many styles and colors represented.
   
   The matching suits is the perfect analogy of how inbred the industry has become. Bankers learn from bankers, compare themselves to other bankers, and hang out with other bankers. The best ideas that I help my banking clients with are based on things I learned about marketing, improving people’s performance, and pricing, etc., outside the banking industry. Walmart knows how to move product. Rubbermaid is the master of innovation. Disney understands how to train people for incredible performance and adherence to corporate culture.