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Finovate Spring 2012 Recap

Sorry to take a little while to get this posted, but I had an important Mothers Day post to write.

Last week I attended the fifth annual Finovate financial technology conference in San Francisco. This year’s event was the largest yet, with nearly 1200 entrepreneurs, bankers, investors, analysts and FinTech fans experiencing 63 product demos in 2 days. A few trends I noted:

SoMoLo+Big Data= Deals

As usual, there were lots of innovative companies in the payments space, displaying all kinds of creative ways to move dollars and data from wherever they are to wherever you want them to be. The SoMoLo (social, mobile, local) trend is very evident here, and increasingly being mashed up with Big Data to create specialized Deals– merchant funded rewards, targeted offers, digital coupons, customer loyalty programs, geo-rewards, geo-offers, card-linked offers, offer wallets, etc.

Perhaps one of the most customizable is Giftly, which allows you to gift just about anything from anywhere to anyone– your gift becomes a credit on the recipient’s credit card for a place and amount of your choosing. For instance, you can respond to a friend’s check-in at the local pub with a round on you from across the globe. Pretty cool.

Another very customizable card product is the GlobalVCard, which allows you to issue single or limited use MasterCard numbers for ultra-secure payments. Users can even positively or negatively restrict the types of merchant codes allowed (airlines, restaurants, etc.) and/or limited dollar amounts. Simple and effective user interfaces for iPhone and iPad too. Right now it is only available for CSI MasterCard Corporate Card customers.

Crowdsourcing and White Labeling

There were quite a few white label apps, and as my friend and discerning technologist Bradley Leimer noted on his Twitter feed, it underscores the need for a better user experience in online and mobile banking. Some will leverage their handsome design to help asset hungry banks source new loans, with new social criteria mixed into the underwriting, including OnDeck Capital and Best Of Show winner SoMoLend.

The Gamification of Personal Finance

I have written about my tendency to overuse sports analogies before, but Portfolio Football takes it to a whole new level as personal finance and portfolio management principals are gamified, fantasy football style.

Wall Street Survivor takes a more straight-forward approach, and focuses more on stock trading.

PFM and more for the “Overbanked”

There were lots of great solutions to help empower the “underbanked” (even though analyst and Snarketing 2.0 blogger Ron Shevlin says it’s time to retire that term. As readers of this site know, for better or worse, I have spent most of my career working with the other end of the spectrum. I guess I should call them the “overbanked”.

I am usually somewhat rare at events like this, but I actually heard the term “wealth management” uttered from the stage, not once, but twice. Three of the seven Best Of Show winners involved some form of more sophisticated Personal Financial Management (PFM) tools, including impressive offerings from Personal Capital, MoneyDesktop and iQuantifi.

Also relevant for innovative wealth managers were investor insights from DCisions, a social, communications and collaboration platform manager from Actiance, and a very nice client engagement and management platform “designed by financial advisors for financial advisors” by inStream.

If this trend continues, I won’t be as lonely at future events. That will be good for the wealth management business. I’ve often said that our industry too often makes clients choose between great technology or great people. (Actually, Ron Shevlin would probably approve of the much snarkier way I describe it in person, but I won’t write it here.)

We need to deliver both to be truly excellent.

My Mom has a PhD in Common Sense

2019 update: My mom lost her decades-long battle with COPD in May of this year. I found good homes for her new Macbook, her iPad and some of the new hobbies she had taken up in her 80s. I kept her iPhone 8 with the wallpaper set to celebrate her beloved Cleveland Indians, and the framed printed version of this blog post that she proudly displayed in her living room. I’m glad I didn’t wait until she was gone to write it, or this one, The World I Want to Live In.

“I need a new Skype headset, do you know if they take PayPal?”

That was a text I received from my then 72-year old Mom a couple of years ago.

From her iPhone 3G.

Before she upgraded to the 4S, 5S or her current 6S.

She also had a Twitter handle and a Kindle before I did.

The ‘Figure it out’ Gene

It’s not that she’s necessarily tech savvy. I sent her my old wireless router so she could have finally have WiFi at home after she bought her first iPad. She had no idea how to insert it between her cable modem and her Dell desktop at the time, so she placed a call into her personal help desk (me), while I was walking through O’Hare airport. After a confusing round robin of misunderstood explanations on both ends, I finally said (lovingly, of course) “You will have a time to speak, but this is not that time” and then I dictated a diagram for her to sketch out for herself. It was kind of like trying to play Draw Something through Siri.

We still laugh about that, but she figured it out, she is naturally curious. She once described herself as having the ‘figure it out’ gene, and I quickly realized that was a trait present in most of my favorite people. Neither of us is very patient with helpless types.

“At work they ask me how I know how to fix copy machines” she once told me. “I just open the cover and look for things that look like they’re broken or disconnected. How hard is that?”

Sadly, it’s apparently too hard for too many.

A Ph.D in Common Sense

Mom doesn’t have a ton of formal education, but she is a voracious reader of nearly anything that she can get her hands on (on paper or in pixels), and I always say she has a Ph.D in Common Sense. She grew up working with my small business-owner grandfather, and I’ve heard her give advice on marketing and management to the successful entrepreneur who has entrusted her for the past 30+ years.

And believe me, you don’t want to come up against her on Words with Friends. She holds about a .700 record against me, mainly due to her maddening penchant for tucking multiple words into random gaps (usually with Triple Word Scores) and leaving me nothing to work with.

It’s not that she doesn’t appreciate formal education. She dropped out of high school, but she grew up in a very different era in a blue collar family that worked early and often. But she made sure that I was the first person in the family to go to college. “When you go to college…” I always remember saying to me when I was young. Never “If you go”.

She instilled in me my love of reading, learning and traveling (often to her chagrin, she worries, you know), and she encouraged me to explore, take risks and be an early adopter. I wouldn’t be who I am without her.

Happy Mothers Day, Mom.

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Congratulations Finovate Spring 2012 Winners!

Congratulations to the Finovate Best of Show winners (in alphabetical order):

All in all a great show, and I enjoyed meeting lots of great people as I explore the intersection of leadership, advice and technology. More of my impressions and my personal favorites coming soon.

BehavioSec

BillGuard

SoMoLend

Finovate Spring 2012 Preview

This week I will be back in San Francisco attending the Finovate Spring 2012 financial innovation conference.

Finovate is a two-day showcase of the newest financial and banking technology innovations from both established companies and startups. Short company demos of just seven minutes each are presented in back-to-back blasts, and no slides are allowed, so presenters have to focus on the key benefits and what makes their product stand out.

I am looking forward to networking with some old friends and meeting some new ones as I once again take my exploration of leadership, advice and technology on the road.

I will be back here with my notes and observations.

FinovateSpring 2012 Presenting Companies

http://www.finovate.com/spring2012/presenters/imagerotator.swf

Access Development	CoverHound	Kabbage	SaveUp
Actiance	CSI globalVCard	Keynote DeviceAnywhere	Serverside Group
Affinity Solutions	DCisions	Klarna	Silver Tail Systems
Applause Learning	DeviceFidelity	Kuspit	Social Money
Balance Street	Dwolla	Linkable Networks	SoMoLend
BancBox	Dynamics	Mitek Systems	Swipely
BankersLab	eDeposit	MoneyDesktop	TASCET
Bazaarvoice	edo Interactive	mSHIFT	Taulia
BehavioSec	Expensify	NICE Systems	Thomson Reuters
Bill.com	Experian	Nomis Solutions	TIO Networks
BillGuard	Flint Mobile	On Deck Capital	Transparency Labs
Blaze Mobile	FutureAdvisor	PaySimple	Virtual Piggy
Cachet Financial Solutions	Giftly	Personal Capital	Wall Street Survivor
Cardlytics	inStream Solutions	Pindrop Security	WattzOn
Clover Network	IP Commerce	Portfolio Football	Wipit
Concur	iQuantifi	ProfitStars	ZipZap

Five Lessons from the Oracle of Cincinnatus

Update: Terry Crilley passed away November 9, 2014. He will be missed by his friends, his family and the thousands of co-workers and clients he impacted during his career. I wrote this on the occasion of his retirement in April 2012.

Last week I traveled from Seattle to Cincinnati to celebrate the retirement of my colleague, friend and mentor Terry Crilley after 31 years of service. I once dubbed Terry the “Oracle of Cincinnatus” because I declared him to be the font from which all wealth management knowledge flowed.

It’s not that much of an exaggeration, and no one who knows him has disagreed yet. Terry was the primary driving force that began the transformation of an indistinguishable regional bank trust department with stocks, bonds and a few of its own mutual funds into a full open architecture platform of best-in-class investment managers.

No less than two American Banker “Banker of the Year” award winning CEOs (Richard Davis, 2010 and Jerry Grundhofer, 1999) took to the microphone to celebrate Terry’s contributions to the company, his clients, his employees, his community and his family.

I won’t even try to capture his 31 years of positive impact, but I will attempt to offer a few of the best lessons he has passed down over the years.

Ask great questions

Terry never tried to display his considerable intelligence by asking long and complex questions, but often his deceptively simple ones were far more unsettling. “Let me make sure I understand… we’re trying to encourage our clients to use this service right?” He would say. “Then why are we making it so hard for them?” When working with Terry on a project, I often thought of Hubert Humphrey’s famous quote “Never answer a question from a farmer.”

Grow leaders, not followers

Terry was never a farmer, as far as I know, but he sure knew how to grow leaders. He was explicit about that. One of his direct reports told me a story about how he asked Terry for his input on deciding between two difficult business choices, one of which contravened Terry’s direct request. Terry listened quietly as the employee explained the seemingly no-win set of conflicting choices, then replied simply: “I expect to grow leaders, and this is your decision to make. Just let me know what you decide.” Not what the employee wanted to hear at the time, but ultimately a response that did help him become a better leader.

“This stuff doesn’t just happen”

Even though Terry preferred not to micro-manage, he knew that sometimes he had to be more prescriptive in his leadership style. He was often quoted as saying “This stuff doesn’t just happen”, which was his way of saying “We have done a lot of work on this. This is the right thing to do, and I expect you to ensure it gets carried out.” He delegated well, freely and often; but he knew that merely delegating would be an abdication of his responsibilities as a leader.

“Learn to dribble with your left hand”

Terry is a lifelong learner, and he expected the same from those around him. While he was adept at helping people figure out their unique strengths and how to play to them, he also expected people to learn new skills and to practice them. He was a patient but insistent teacher, and he often encouraged others to “learn how to dribble with their left hand” so they could be more effective in more situations.

Disagree without being disagreeable

Terry and I agreed on many things, but when we disagreed he always listened and debated respectfully. He never made it personal, and he never took things personally. He was interested in getting to the right answer, and sometimes we ended up agreeing to disagree. But we always ended the conversation as friends, usually talking about our families.

Thank you, oh wise Oracle, for your dedicated service and your many lessons. I look forward to seeing how your future chapters unfold.

Five Things Banks Can Learn From Start-Ups

Most bankers don’t spend a lot of time with start-up companies. The need for bankers’ loan decisions to be right 99% of the time tends to not mix well with most start-ups’ risky and voracious appetite for capital.

Outside of a few bankers in Seattle, Silicon Valley and a few other places, the clear exception is the banking innovation and financial technology (fintech) communities. We all get together at great conferences like Banking Innovation and Finovate, and I always learn from bankers, large vendors and entrepreneurs alike.

The best start-ups have lessons that a lot of bankers would do well to learn:

1. Start with the customer

Start-ups that take off and grow are usually designed around a specific set of customers, whose needs and preferences are deeply understood. Most banks want to be all things to all people, so they end up being nothing much to far too many. Of course, there are some interesting exceptions. For some really thought-provoking ideas read about niche banking from Tribed, whose CEO Jeff Stephens I had the pleasure of meeting at a recent conference.

2. Know your value proposition

Great start-ups understand what problems they solve for their customers. They know their pain points how their solutions add value. Many banks are still oriented around selling products that may or may not solve any specific problems. Worse, customers have an even harder time perceiving value from the myriad of add-on fees that too often are not linked to any value-creating activities.

3. Iterate regularly

By their very nature, start-ups that survive and thrive stay close to their customers and make regular iterations of their offerings to better tailor it to what their customers want (and not necessarily what they say they want). While bank customers don’t want change simply for change’s sake, well-considered tweaks for well-defined reasons increase satisfaction and loyalty.

4. Keep it lean

I worked many years for a CEO whose simple mantra was “grow revenue faster than expenses and great things happen”. My review so far of banks’ 1Q earnings shows a continuation of a fair number of banks growing expenses faster than revenue, some of them with efficiency ratios (non-interest expense as a percent of revenues) in excess of 65-70% and even higher. This is not sustainable. If the revenue challenges cannot be met, expenses will have to be cut to maintain EPS growth. Otherwise, merger mania may indeed by imminent, as I have previously posted.

In the start-up world, the dot com boom rally cry of “get big fast” has largely been replaced by lean and mean infrastructures. Instagram– which just sold itself to Facebook for a a billion dollars– has barely a dozen employees.

5. Protect your capital

Entrepreneurs know that capital is precious and they have to allocate it wisely. Signing that expensive lease on a fancy new office suite may mean that you can’t make that critical server upgrade or hire that new business development manager.

Bankers should know that capital is precious too, but I see evidence to the contrary so often that I wonder sometimes. The financial meltdown revealed huge leverage ratios and loan books filled with poorly underwritten loans that quickly depleted capital reserves.

Today’s slow growing environment is causing bankers to be tempted to forget this lesson in the quest for loan growth. Which is why I always say that bankers need to think like private fixed income investors.

Investment Dollars for Start-Ups: Who’s Getting the Cash? (forbes.com)

Are you a coach… or just a caddie?

Last week I had the chance to collaborate with some great minds in management and leadership at a leadership conference for the firm that pays me for my day job.

I have been a “Strengths Geek” for several years, as I often note, so I was excited to work with Paul Berg and Diane Obrist from Gallup as they led 130+ wealth management leaders through their StrengthsFinder results.

I have also long been a fan of the work of Tim Freeman from Efficient Marketing, so I was happy to finally meet with him in person. I also discovered a great new source of thought leadership in Kristie Van Leeuwen from The The Next Stage Group, LLC.

The closing keynote speech was from General Stephen Lorenz, USAF (retired), CEO of the United States Air Force Academy Endowment.

A senior leader is responsible for self, people and results.

— General Stephen Lorenz

It was a great blend of leadership and management. A mix of doing the right things, and doing things right, as Peter Drucker would put it.

But my takeaway headline was actually from my colleague Jerry, who said something to the effect of:

You know, I’ve always thought of myself as a coach, but if I’m honest with myself, I’ve really just been a caddie. I know the course, and I know which clubs to use, but I’ve really been letting the players play their own games when I should be helping them get better.

Jerry is brilliant, successful, frenetic and sometimes prone to pontificating as he thinks aloud, but he is consistently sincere in trying to make himself and his team better.

He captured in a well-turned phrase the thread running through it all, and something I have seen a lot– the mistaken notion that a good manager simply ‘hires good people and stays out of the way’.

In my experience, managers who cite that as their overarching principle often aren’t that good at hiring, and ‘staying out of the way’ is usually an excuse for not holding people accountable.

…there’s an enormous difference between leading an organization and presiding over it. The leader who boasts of her hands-off style or puts her faith in empowerment is not dealing with the issues of the day. She is not confronting the people responsible for poor performance, or searching for problems to solve and then making sure they get solved. She is presiding, and she’s only doing half her job.

— Larry Bossidy and Ram Charan, Execution, The Discipline of Getting Things Done

This is not to advocate micromanagement, no one likes to be micromanaged. But great coaches hold their players accountable. More importantly, they cultivate teams of people who want to win and a culture of continuous improvement.

Great players seek coaching because they want to get better.

Are you a coach… or just a caddie?

I hired your resumé, and I ended up with you!

I’m really not much of sports fan. I just figured out that the Florida Marlins are now the Miami Marlins when I saw their gorgeous new stadium on TV on opening day.

This fact may be surprising to people who hear me a lot, because I love to use sports analogies.

Not in that failed former athlete, Glory Days kind of way. My couple of years of kicking a soccer ball around and one year of high school track doesn’t really give me too much gravitas in that department. (I purposely chose the 100 yard dash because the gap from first to worst was only a few feet. I probably would have been lapped in a mile run.)

No, I just like the classic allusions to pulling a team together to achieve a common goal, giving it your all in the quest for victory and the various subtleties of acquiring, managing and coaching talent in a people-driven business.

The always insightful Steve Jones of Curtis Buck Associates is no sports analogy slouch (plus he has the athleticism to back it up), and his April 13 post “Petrino and Ozzie – You Get What You Hire” made a great point:

Well, in the last week we have seen Bobby Petrino fired and Ozzie Guillen suspended and clinging to his job. Neither of these scenarios should come as a surprise to anyone, yet both the University of Arkansas and the Miami Marlins organization’s acted as if they were taken completely by surprise. There was an absolutely massive and very public record for both Bobby Petrino and Ozzie Guillen – the organizations knew very well who they were hiring. And that is the issue – you get what you hire. You get ALL of what you hire.

I agree with all of that. Sometimes, though it’s even worse. Sometimes, you don’t even get what you THINK you hired. Usually, it’s because you weren’t really paying attention.

I hired your resumé, and I ended up with you!

A colleague of mine once asked me to interview a potential portfolio manager as a replacement for someone who hadn’t worked out very well. Within 20 minutes I discovered that while the new candidate was smart and personable and had interesting experience inside another wealth management firm; she had never managed any client portfolios directly, she had no meaningful client relationship management experience and she had never worked in a role with a sales goal.

I politely thanked her for her time and told her my colleague would get back to her. I asked my colleague why she had advanced the candidate to this level despite her lack of direct experience.

“Well, her resume was impressive, she’s very smart and I really liked her”, he said.

“Sounds like the same thing you said when you hired the last person. How did that work out?”, I asked.

We had a long conversation, and he began to discover that he really wasn’t interviewing candidates, he was jumping to conclusions based on limited information, then selling the candidate on the job for which he had just convinced himself was a perfect fit.

You’re hiring the person, not the title

In my 2/18/12 post “What is the Talent Density of Your Team?” I referenced some quotes from a Netflix presentation on Culture. Another comes to mind here:

Lots of people have the title “Major League Pitcher”, but they are not all equally effective

This got me thinking– what if baseball teams hired like most of corporate America?

“Well, I see here that you came up through the Indians farm organization, great way to start…. uh huh, a couple of years with the A’s… so why are you leaving the Yankees? I see. Well, let me ask you this– we are looking for someone who can really deliver late in the game. Do you have any experience in close games, runners on base, no one out? OK, that’s great! So, hypothetically, you’re facing a left handed power hitter in a full count– what pitch do you go with in that situation?”

Crazy, right? We would already have all of the player’s stats and accomplishments and we would know exactly why we were hiring him, for what role, and what he is worth relative to his expected contribution to the team.

Not that hiring is perfect in sports, either.

You could always end up with Manny Ramirez.

Then end up “surprised” when he misses a game because he decided to go swimming with dolphins that day. As Steve Jones said, you get ALL of what you hire.

But that’s “just Manny being Manny“…

Oh, by the way– my colleague ended up solving his hiring problems after reading the book Who: The A Method For Hiring, by Geoff Smart and Randy Street. I recommend it for any hiring manager.