BankerVision

Revenge of the Twitterati

My previous post suggesting that Twitter is stunt for banks, has stirred up a few people. I've had quite a few private emails on the subject, some of which agree with me, and some of which don't. I've also had some pretty interesting comments here on the blog itself.

Many are horrified that an innovation person can possibly not "get" twitter and social media in general. Take this, for example, from Chris Skinner:

A man returns from holiday and sets out to pour cold water on the latest networking craze ... same man is a blogger, social media aware maverick ... he's on linkedin and stuff ... yet doesn't get Twitter.

I think I do get Twitter, at least on a conceptual level. I don't use it personally every day, though I do have a Twitter account. And when I find someone interesting who has a Twitter account, I'll at least look at their tweets.

The same can be said for virtual worlds, the previous banking fad that has faded now from memory. I played with quite a few of them, and I suppose I must have worked out early that – excepting the first players in the space who were doing real experimentation – everyone else was engaging in another stunt.

The compelling pull of "earned media" is very tempting indeed. If you are relatively early with your stunt compared to your peers, people are going to write about your bank.

Of course, if you want to get the balanced view on all this, I definitely suggest you read the whole of Chris' writings on why banks should do social media and his rebuttal of my argument that it is uneconomic.

I've said it before: if there was such a titanic business case for social media for banks, I can assure you we'd all be doing it. Most of us are not. Ergo, the business case must be faulty. It is beyond reasonable to think that every single non-social-media bank in the world doesn't "get" it.

But let me continue with the comments of Neil Robinson. Now Neil is smart, but he doesn't much like banks. So of course, when I suggest that we might not do things for economic reasons, he responds that we're missing an opportunity, one that we're too stupid and too traditional to capture:

Let's rejoice that some banks have the vision to go out into their market. It's a low cost endeavour with potential high value rewards. Why dismiss that?

Maybe you could start your own social network. "Sitter".

For bankers who aren't going anywhere and nothing to tell anyone, and don't want to listen anyway. The entire high street would sign up to that, right away.

Neil, if anyone could explain to me, in economic terms which made sense for a real numbers business case, what these potential "high value rewards" are, I'd start a Twitter programme right this second. Getting to a real money benefits case, one that I can defend internally, is the real challenge with all these things.

However, I will decline your invitation to start the new "Sitter" social network for bankers, though it is clearly a great place for people who hate bankers to rally and hang out.

My final point on this, though, comes to me courtesy of Nicholas Carr of Rough Type. He reviews the latest Nielsen figures for Twitter uptake, and finds that three of five customers bail on Twitter after a few weeks. He goes on to say that unless that trend stops, Twitter will soon run out of new users to recruit to supports its (admittedly) stunning growth. In fact, according to Nielsen, the churn rate will limit the sites growth to a 10% reach figure. Not really very significant if Twitter is to be a long term channel for banks.

I guess my question, given that, is why anyone thinks that Twitter is going to be important for banks.

However, I have been wrong before. Noone is perfect.

 

For banks, Twitter is a stunt

Over at Visible-Banking Christophe is counting the banks who have put themselves up on Twitter. There are quite a few of them.

I think banks being on Twitter is a stunt. It is good for getting the attention of the social media mavens, but can hardly be economic if you have need to reach thousands of customers. It is one of those fashionable things that the "in" banking crowd always jumps right onto the second it comes out, only to quietly drop later on when it turns out to be a fad.

I am reminded, between you and I, of the fervour over virtual worlds. That particular fad is one that you hardly ever hear of now.

Now, I realise that Twitter is getting a lot of press right now. I accept that every man and his dog appears to be talking about it. I'd even concede that there are lots of people actually using it.

But who are these people, when all is said and done? Are they the social-media aware cognoscenti who always adopt everything early? Or are they, actually, ordinary people who open ordinary accounts and do ordinary business with banks? I think the former.

This brings me back to my comments on the economics of Twitter, and previous comments on the economics of social media in general for banks. As I said before, content is interesting to readers when it is relevant to them. Creating relevance is a matter of being personal, of knowing unique things that are interesting to a small number of people. Creating that kind of content at scale is expensive. You can imagine rooms and rooms of people – a Twitter Centre, if you like, of people who only do this kind of work.

I don't think so.

Christophe goes on to present some statistics. Apparently, world-wide, there are some 27,000 people following all these banks on Twitter, which is an average of just over 350 customers each. Only 14 FIs have more than 500 followers.

Now, I'd assume that each of these institutions has someone whose role is, at least partially, dedicated to servicing that Twitter account. With less than 400 customers to serve, I suppose it is possible, even, that they can create some content which is interesting enough to keep their followers signed up. But what if they had thousands of followers, or tens of thousands? Creating relevance for so many is not likely to be something one person can do.

But all of this is irrelevant, really, because the Twitterati aren't interested in content at all. Their primary interest is counting the number of followers they've acquired. It is a badge of honour: you are someone in social media if you have thousands of followers, and noone otherwise. Twitter is a way of keeping score, a means of being part of the "in crowd".

Which brings me back to my initial point.- that Twitter is a stunt for banks. It is an interesting experiment, but surely noone thinks Twitter is going to be a channel choice that many customers are going to use regularly.

Bank innovators would likely be better off getting their mobile-phone houses in order, rather than striving for the coolness of being the biggest financial services thing on Twitter.

Its OK to look at the job market

It is a sign of the times, I think, that people are spending quite a lot of time looking at the employment market. If they're not actually looking for a new job, they are at least keeping a watchful eye over their future prospects in case they need to make a move. Its completely something to be expected, of course. It is only natural that employees take such steps when they're feeling insecure.

We may as well face facts: employees need to rely on themselves, not on the benevolence of employers. The days of final salary pensions, jobs for life, and so forth are long gone. And anyway, the value of an employee that has only worked in one company is often much less than those who have had rounded experiences in many different places.

Now the reason I bring this up right now is that walking around our offices, you often see the furtive looks, hurried browser closures, or low toned phone calls going on that are obvious signs that someone is looking at job web sites or talking to recruiters. Here, as everywhere else, there is a culture of keeping potential moves a secret.

That made sense, of course, when the expectation was that once you'd joined an organisation you'd be there for a very, very long time. Make sure you don't chop and change too much on your CV. Show loyalty and longevity in your employment record to ensure that prospective companies can see you're a stayer. Minimise the disruption you cause to your employer.

These days, that doesn't make sense any more. Employees, whether they admit it or not, are pretty constantly looking at opportunities. That's especially true for the new Gen-Y workforce, who are likely to move employers every year or two no matter what measures a company puts in place.

It is surely time we recognise the fact that all employees are looking for new jobs, all the time. And work to eliminate the perception its necessary to hide the fact wherever possible.

There are obvious advantages to this, both from an employee and employer perspective.

For the latter, knowing one of your staff is looking is valuable HR intelligence. It says you need to take steps to enhance the work experience to keep the employee. It signals they need a new challenge or want to take on more responsibility. More usefully, though, it tells an employer he or she might usefully consider how to fill the employees shoes, should they leave.

And for an employee, keeping an open eye on the market is valuable too. At the very least, it is a practice which enables people to benchmark themselves against everyone else. So often, in my experience, people realise they're in a positive position compared to peers outside the company.

In my team, we are quite open about the realities of the employment market, and I have regular conversations with people about what they've found outside. We have one Gen-Yer, for example, who has already informed me that his exit timeframe from the bank is likely to be September (he's doing a start-up). We knew this was the likely outcome from the moment he joined my team, and I think I can say there have been no negative consequences to this individual as a result of the upfront discussion.

In all the discussions I've been having with my staff, I think they've found being open about their external – as well as internal prospects – to have been empowering and useful. I am now beginning to ask which jobs they've found in the last month they were most interested in. I like to know, because it tells me interesting things about how they're thinking about their current role. It is my obligation and duty to facilitate their moves, whether they be internal or external.

Now, in attempting to make it OK for people to look for another job, I've discovered something interesting. Most of the time, the fact of looking, and talking about, potential moves, seems to encourage people to stay. The new openness seems to be a powerful enabler of retention, even given the state of the external market at this time.

The fact of the matter is, no matter how dire external circumstances may be, there are always opportunities for talented people. So every little way you can find to increase the chances of your talent staying is important. Interesting, isn't it, that helping your talent to leave may be one of the best ways to keep it.

Innovation consultants

Over at Innovate on Purpose, Jeffrey Phillps is engaged in telling stories about his life as an innovation consultant. Typifying the innovator as a gangsteresque private detective, he wraps up his post with the comment:

I left and entered the first cheap speakeasy I could find. The look of panic and the smell of fear of change clung to me like mud on my shoes. A stiff drink and a glance at Christensen brought me back to my senses. Building a safe innovation program, I said to myself, the definition of an oxymoron.

This is typical of an innovation consultant. They always need to show you a big bang solution to a big problem. In so doing, of course, they are able to justify their fees, and be sufficiently visible that they're likely to get more work from the firm involved.

Practically speaking, it does seem helpful to call in an innovation specialist when you have a big problem to solve. Theirs is an external view, tempered by experience with lots of firms. Its pretty difficult to get that when you're doing innovation from the inside.

But what Jeffrey, and most innovation consultants, seem to ignore is the very significant upside available to firms that concentrate on improving what they're doing right now. In the same post, he writes this about the response of his fictional firm to the suggestion that they do radical, business model disrupting innovation:

"What if we gave you one or two people, for a week or so, for a few hours a day. Could you come up with something interesting, even radical, but safe and within our current business model? We want the big payoff, but the risk and the change to our business models are too difficult."

This is typical of most companies. But just because it is typical does not mean that you'd abandon the innovation agenda altogether. All that's being said here is that this firm wants to Play not to Lose, rather than Play to Win.

It is the less glamorous side of an innovators work, but as important none-the-less. By typifing firms that don't want to be radical as uninnovative, Phillip and other innovation consultants miss a massive opportunity.

The opportunity is to show these companies how to build scalable processes that can take a large number of incremental improvements, and move them through to completion at volume.

I recognise that innovation consultants are less interested in this kind of work. Instead of selling one big idea, they may have to sell hundreds of small ones. And instead of focussing their time and intelligence on making a big-bang visible change, their results will likely come incrementally, and over a much greater period of time.

But I think the most interesting thing here is that the same processes that work for incremental innovation also scale up to breakthrough and disruptive innovation as well. So from the perspective of the innovation consultant, showing a customer how to do incrementalism well leads, eventually, to them doing the kind of high visibility, big bang work they wanted to do in the first place.

Of course, that's a much longer engagement, in terms of revenue hours, than just showing up for the initial big-bang thing.

Nothing a consultant would be interested in, right?

It’s never been done before

"It's never been done before" is a refrain one often hears in financial services. There are also significant variations on the theme, such as "we are fast followers", or "where are your references and case studies?". The whole is representative of a lack of faith that bankers, banking technologists, and their associated consulting firms, services providers, and other parts of the ecosystem, have in their ability to determine what is a good thing and what isn't.

The fact is, most people in financial services don't think they have the ability to make a correct call in the absence of someone else making the correct call first. Now, they will never admit this, of course, and if you dare to tell someone they are "risk averse", you have to watch out. I know this, because I did an experiment during the week where I actually called as many people as I could on their risk aversion, and not once did anyone agree me with that they were unable to take a "first of" decision. Some were actually insulted, even though I'd thought I'd made the comment in the most supportive terms possible.

But perhaps what I think is supportive, is actually confrontational when it comes to the risk averse. Or perhaps I fail to know myself sufficiently that I can't tell the difference between supportive and confrontational behaviour.

Regardless of that, the need for evidence that someone else has succeeded before a new decision can be made is an epidemic in our industry. It is also the reason that bankers aren't considered innovative. More importantly, though, it is the reason that when one sees real innovation, it more often comes from organisations that aren't banks, such as financial services start-ups Zopa and Wesabe.

Banks are not "less nimble" than such organisations, and certainly they have far more resources available to pursue uniqueness, should they care to do so. Neither are their people less able to come up with great ideas: my own team processes thousands upon thousands a year, and a significant proportion of these are truly great.

The success rate, however, for most institutions, is quite low. Too scared to make that first decision, most of the time.

The thing which truly bothers me about this is that evidence exists that when bankers go out on a limb and make "first of" decisions, substantive paybacks are available. I especially like the Canadian ING Direct, which changed the face of direct banking for everyone else, and did so, apparently, despite opposition from its Netherlands based parent. Or Caja Navarra, whose innovations around Customer Rights have propelled it from the bottom to near top of the league table of savings banks in Spain. And lets not ignore the cleverness of smaller institutions like US based Advanta, who with their BizEquity product are taking the first steps towards self-assessed credit in the business market.

These companies, and so many others, have proved the value of dumping the "its never been done before" culture of banks, and proving that real value can be the result.

The real answer to the dilemma posed here is to work out how to provide a level of reassurance to bankers that they can actually make a good call in the absence of supporting evidence from other banks. And coupled with that, the need for bankers to recognise that a bad a call, a failed call, is actually not the end of the world.

Am I reaching for the stars here? I don't think so, but I do recognise that – as with all things related to innovation – perseverance is the key.