December 09, 2013

Imagine that you walk into your dry cleaners and they've transformed the greeting area into more of an "experience" -- a cafe-like atmosphere, greeters with iPads, large flat-panel screens educating you about their new eco-friendly dry cleaning processes.

Your mind would reel, trying to reconcile thoughts like "who the hell is paying for this?" with "why does it smell like cappuccino in here?"

Wait. Did I say dry cleaners? I meant bank. I confuse the two because I've been in banking long enough to have lost the humility to recognize that we're glorified dry cleaners -- two equally banal scribbles on your weekly list of to-dos.

It is a symptom of scale when banks replace the modest lobbies of yesteryear with expensive Disney versions. The underlying problem is that management's default response to the complexities of scale is to divide labor by specialization, to organize talent by what they know versus what they need to know. And this process hardcodes organizational boundaries into functional roles, guaranteeing that teams either can't see or can't act on the end-to-end customer view.

This state of affairs is particularly pronounced for the too-big-to-fail crowd. Their senior executives correctly infuse top-level strategy with analyst-facing words such as cross-channel and omni-channel. But those words remain hollow because two levels down from Mr. Potter, the organization defaults to specialization: creating, validating, and rewarding roles that focus exclusively on a single channel.

That's why every big bank still has a banking center executive whose main job is to create "an experience" when customers walk in.

Enter banking centers with cafe-like atmosphere or, worse, a financial spa. Enter complete customer outrage when a previously free banking service gets tacked with a fee.

What's lost is completely obvious to non-bankers: the end-to-end view. The idea that customers are more than their narrow interactions with a single channel, that they channel surf from their teller interactions to their mobile phone to an ATM to a call center to online.

Read the full article on InformationWeek