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Is it What it Seems?

I do a lot of research on banks and financial institutions. The Dodd Frank studies – and others – often conclude that larger operations have an automatic efficiency advantage over their savings and loan or commercial bank peers.


But the question to ask is “how do you measure efficiency?” Are you talking revenue per employee? Are you talking return on capital? What is your measure?


What happens if you don’t structure a mega bank but you build a series of local branches with strong online capabilities? What if you use this more intimate structure to promote better service for your customers and, as a result, build stronger and longer relationships not just with the current generation but with generations to come?


Years ago Zappos was laughed at for allowing their customer reps to spend unlimited time – if necessary – on the phone with customers. Laughed at for providing overnight shipping AND return shipping for their better customers. They built a brand on service. Many of the normal efficiency measures might have shown Zappos to be highly inefficient.


But Zappos knew that efficiency comes when you build a desirable place for customers to come, spend their money, and return for more business. That efficiency comes when you empower your people to solve problems and feel connected to positive outcomes.


Eventually the metrics will show up as pricing power, loyal customers, lower employee turnover.

But in the beginning, before you can absolutely measure it, it starts with belief, heart, and doing the right thing

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