Innov8 (or Die): What Banks Can Learn from Geek Squad

The Geek Squad seems an unlikely model for banks to emulate, but founder and "chief inspector" (read, CEO) Robert Stephens has a lot to say about how banks can improve their customer experience. Interviewed in the March/April 2007 issue of BAI's Banking Strategies, Stephens says banks should strive to make the routine activities of banking fun, such as waiting in line at the branch or at the drive-thru. He also calls for innovative business cultures able to nurture small, inexpensive experiments that could later on have a big impact.

Some excerpted mindbombs to consider:

ON THE CULTURE OF INNOVATION
•Think of every company not as a company but as a software program—as a system you're buying into. Customers, either consciously or unconsciously, choose companies based on their interface.

•There are endless ways to innovate. We need cultures inside companies that are constantly turning out these ideas.

•What makes the Geek Squad unique is that we are defined by the employee. Labor is our biggest expense, as it is with most other service businesses, so we define ourselves by our relationship with our employees. The technology will change, but how we deliver service and what people expect from good service, those things won't change.

•The customer experience is a product of your employee experience, especially if you're customer-facing. For banks, the branch is just one part of it. That's why online and phone are probably the most important channels, because even if you come to a branch, you might be calling first to get driving directions, or going online to find out about the hours. So, the online and the phone experiences almost should be taken care of first, since they can be more easily controlled.

ON SAYING "NO"
•For example, we're launching Geek Squad in London early this year. I told the team: "You have no money for public relations—none." I told the marketing team: "You can't do marketing, but I'm going to give you money for creative endeavors. What you're going to do is, you're going to design the call center scripts to make it fun to be on hold."

•The reason they have no money for PR is because I expect them to make that experience of being on hold enjoyable. The experience should be so memorable that the press will line up to call us and ask us to come on their TV or radio show and talk about it. Now, that's public relations. Operations become marketing. They become indistinguishable from each other. That's when you know you have accomplished your mission.

•I ran into our chief financial officer the other day in an elevator and said, "You know, the finance department is the most important catalyst to creativity in the entire company." He looked at me, like, "Really? Why?" I said, "Because you say 'no' more than you say 'yes.' And saying no frustrates people. But the successful people, the persistent people, will always seek to find a way."

ON THE PIRATE MENTALITY
•I learned this from not having the resources, as a small company, to do things. So you tend to do them differently. That's a lesson that I'm learning now, even in a large environment like at Best Buy. The best thing that ever happened to me was not having money when I started my company. That starves the organization, which fosters creativity.

•A large bank may give up on innovation for many reasons, such as we're government regulated, we can't get things through too quickly or there are Wall Street pressures on a quarter-to-quarter basis. But I would argue that those pressures are the source of the creativity; they are not the limiter.

•That's the riddle. We tend to give up too easily and just throw our hands up, saying, "Well, we can't innovate," and then complain. But that's a form of competition because that kind of attitude prevents you from beating your competitors.

ON ASSEMBLY LINING INNOVATION
•It's easy to blame the faceless monolith, but if you're competing for its resources against a peer, well that's different. You can look at which idea contributes to a better customer experience. If you can't measure that, then it's back to the drawing board.

•That criterion creates a Meritocracy; it's one idea versus another. But the ideas should start small. If you ask for a lot of money for a project, you're going to be subject to a lot of restrictions, a lot of barriers. Not spending a lot on a project provides greater creative freedom because there's less risk for the organization.

ON FAST PROTOTYPING
•Tiny experiments can snowball into great revenue producers, and that's what companies need to do. Software is your process in real time. It offers the ability to design, to experiment, at a really low cost. That's where I think banks are specifically missing out on a coming revolution in software development at low cost and high speed.

•Banks should continually set a goal of coming up with one new idea a month, one new little service. They don't have to be large, massive undertakings, but simple, tiny stuff.

•I recently launched a rapid prototyping program at Best Buy called "Two weeks: $500." Basically, if anybody in the organization has an idea and can give us a prototype in two weeks, we'll give them $500 to develop a simple software feature or function to demonstrate it. The feature can be made accessible on the company network so people can check it out. Then, to take it to the next level, we can add a few more zeros, maybe do a $5,000 prototype. When you get to the $50,000 level, maybe you invite your top customers in to beta test it.

•Eventually, you might move to the $5 million implementation, but you start with $500 to force that creativity and de-risk the idea to get it off the ground. You can't even get to the $5,000 level unless you've proven out some kind of working prototype.

via BAI Banking Strategies