From Killer Infographics and GeekWire:
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Top Ten Geek Week Sneak Peeks – Part 2
Today: The GeekWire Summit
Startup technology news site GeekWire held its first birthday party on March 7 with the GeekWire Summit. Speakers included former Microsoft Chief Software Engineer and Cocomo co-founder Ray Ozzie, former Swype CEO Mike McSherry, Hulu CTO Richard Tom, T-Mobile CMO Cole Brodman, Rhapsody President Jon Irwin, venture capitalist/serial founder Oren Etzioni and other great technology minds. Nothing was focused on FinTech per se, but nonetheless here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:
“How do large companies innovate? They buy small companies.”
- On the rise of social collaboration in the enterprise, Ray Ozzie paraphrased Ethan Zuckerman (who also has a lot of interesting things to say about how we tend to interact with people who are most like us, but that’s another post) in describing the “scopes of voice” as public/private/secret/self :“I think when you get into enterprise and business scenarios, there are some organizations where speaking publicly in a public voice is very useful. Professional services firms promote an internal culture where speaking openly and being known as the professional who knows something about something works a lot better than certain manufacturing company, where the internal norms might be different in terms of secrecy and confidentiality.” There is still lots of opportunity, but also lots of work to do, since only 27% of financial professionals use LinkedIn, and less than 4% use any other social media methods at all.
- Do you think that building a massive base of clients/users/followers is in direct conflict with customizing your messages to be relevant individual users or subgroups? Consider that Hulu has 1.4 BILLION ad impressions per month, but they offer some innovative ways for users to customize their ad content. Ad Selector allows viewers a choice of three ads from one brand or one ad from a selection of three different brands. Ad Swap allows viewers to find ads that are most relevant.
- Great discussion on the state of mobile technology. All on the panel had praise for the Windows Phone platform, but noted that they have a long way to go with a 4.4% market share to Android’s 49% and Apple’s 30%. (IMHO, I think that RIM’s enterprise-centric 15% share is the most vulnerable to Windows, and it’s already down 2% in the last three months.) Former Swype CEO Mike McSherry said that Apple’s Siri natural speech style will help improve text entry over time too. This evolution to more natural interfaces and input styles was also noted at Micosoft Research on the prior day.
- Startup investor and advisor Hadi Partovi noted that the cost of sequencing the human genome has gone from $1 billion to $1,000, and predicts it is heading to $100. If that can be democratized, how naive are we about “big finance”?
- Facebook’s Director of Engineering Jocelyn Goldfein said that the company rolled out the new Timeline with a team the size of a startup. Facebook video chat? One guy. In Seattle. Although, that may be taking the lean approach a bit too far. (As someone retorted on Twitter “That explains a lot.”) Still– how many consultant engagements, project managers and steering committee meetings do we need to make meaningful change in our business?
“It’s not enough to encourage employees to innovate.
You have to protect them from the cost of failure.”
– Jocelyn Goldfein, Facebook
(P.S. – I live tweeted my new startup idea from the conference: Embedded QR codes in public carpeting. Remember, I get a 20% Founders Fee.)
Top Ten Geek Week Sneak Peeks – Part 1
This week I really got the chance to embrace that inner geek that’s just dying to break out of my pinstripe suit. On Tuesday I had the chance to visit the Microsoft Research TechFest 2012, and celebrate twenty years of Microsoft Research (Shout out to my host Juliane Carlson). Then on Wednesday I attended the GeekWire Summit and got to hear and meet all kinds of interesting people doing all kinds of interesting things. Here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:
Today: Microsoft Research TechFest2012
“The unanticipated results are often as important as the anticipated ones.”
– Peter Lee, Microsoft Research
- Multilingual text-to-speech (TTS) conversion. The demo was oriented around an American using GPS to navigate around Beijing, but imagine being able to serve non-English speaking clients in situations where multilingual employees might not be available or practical.
- Lots of projects involving Big Data, including FetchClimate, a massive mash-up of global historical climatic data made instantly accessible. Easily useful as-is to assist in assessing branch locations, client real estate projects, etc.
- Another Big Data project is ChronoZoom, which is a “…dynamic cloud based data visualization tool where educators, researchers and students can easily consume, compare and understand the history of the cosmos, earth, life and humanity. Where they can easily consume rich media sets like: audio, video, text, pdfs, charts, graphs and articles in one place and discover new possibilities.” Imagine a financial markets version of this product with every price and correlation of every financial instrument for the past 80+ years.
- IllumiShare is desk lamp with camera that allows people to share physical or digital objects across the internet. Imagine a client who has questions on their trust document (or paper statement from your luddite competitor, because of course your institution has a secure digital document exchange with e-statments…). They could flip this on from the kitchen table of their beach house and you can see it all on your screen, even mark it up or highlight key areas.
- Multitouch is still evolving, and the Wearable Multitouch Projector can turn virtually any surface into a touchscreen, including the palm of your own hand. The current prototype looks a little bit like first generation home camcorders with a shoulder bag processor and a shoulder mounted projector, but it will undoubtedly evolve. No touch is evolving too, building on the Kinect interface, including potential touchless interaction in surgery.
Tomorrow: The GeekWire Summit
Free Advice From a Mentor
(Note: When I wrote this early in my blog’s history, when I was a senior executive for a Fortune 150 financial services firm. Now with the added perspective of an entrepreneur and consultant, I find the words truer than ever.)
I have mentored dozens of young professionals over the years, and even though each situation is unique, I always end up giving these three pieces of advice. It’s not like I planned it all out, or even wrote it out before now, but here they are:
- There is no secret handshake
- Focus on getting better, not getting credentials
- It all starts with you
There is no secret handshake
The CEO of a venture-backed technology company whom I know well once asked me: “Do you ever get the feeling that when someone comes to you for career advice, what they’re really looking for is the secret handshake?”
Yes, I have gotten that feeling.
My best mentoring relationships have involved mentees who truly want to improve their performance, learn new skills, take on more responsibility or just learn more about what a potential career path might look like for them.
The best way to ensure that a mentoring relationship with me is short (and not particularly rewarding for either of us) is to mistake it as an opportunity to simply learn the secret handshake.
Do you really think I’ll hire you or connect you with someone merely because you want more money or a better title?
Put some clothes on that naked ambition, you’ll catch a cold.
Focus on getting better, not getting credentials
I often get questions like “Should I get an MBA (or any one of the alphabet soup of certifications in the financial industry: CFA, CFP®, CIMA, CTFA, etc.)?”
My consistent answer to all who ask is that if you want to learn more about that particular area and want to study it deeper, go for it. I’m a big believer of continuous learning, and earlier in my career I worked to get an MBA and put a few initials after my own name.
On the other hand, if you think that simply tacking those initials after your name will open a whole new world for you, you will probably be disappointed.
I still remember a soon-to-be-freshly-minted MBA who wanted to ‘remind’ me that he would have this very important graduate degree by the time of his next performance review, and that he hoped that would qualify him for a promotion.
I ‘reminded’ him that he was still the same person with the same level of performance, so probably not.
It all starts with you
This is kind of a two-for-one. First, I mean that before you start on any exploration of future paths, you need to understand your strengths, your passions, what gives you energy and what saps you dry.
I also mean that the whole process of working with a mentor isn’t a passive activity of absorbing second-hand knowledge through osmosis.
I was very proud and excited when my company asked me a few years ago to participate in the pilot of a program called MentorConnect, kind of an internal match.com to put mentors and mentees together based on specific skills and experiences.
I learned to start by asking mentees to share any relevant standardized test results they may have taken recently (Meyers-Briggs, PDI, StrengthsFinder, DiSC, etc.), and if they didn’t have any, I had them start with StrengthsFinder 2.0. Not only did this help give the mentee and me a logical starting place, it helped to quickly identify those who were only looking for the secret handshake. Those types often would not do the work.
I also recall the bright young assistant who was referred to me by her boss for some career advice a few years ago. She wasn’t sure what she wanted, but she was sure she should be higher in the organization by now. I took her to lunch, and we talked for an hour and a half. I gave her a couple of books to read for our subsequent meetings. I must have followed up three of four times when I ran into her, but she hadn’t quite found the time to even buy the books, let alone read them.
I guess I wasn’t completely surprised when she dropped by a couple of months later to let me know she was quitting the firm.
She was going to work on her MBA.
And no doubt continue her quest for that elusive secret handshake.
You Do Realize This is a People Business, Don’t You?
Bankers sometimes have a hard time understanding why their industry has satisfaction ratings right down there with utilities, cell carriers and bankrupt airlines. Maybe it’s because they sometimes have more in common with these business models than they would really care to admit. Companies and industries that score poorly in customer satisfaction tend to treat customers like replaceable cogs in their profit machine, rather than empowered consumers with unmet needs and lots of alternatives.
Source: flickr.com via David on Pinterest
David Armano has an amazing knack for boiling down sometimes complex concepts to compelling and easy to grasp infographics. And while the one above was intended to depict a much broader economic view, I think it works just as well in the narrower context of financial services.
It’s not a Wonderful Life any more
Financial institutions have long since evolved from the folksy image of It’s a Wonderful Life‘s Bailey Building and Loan. Competitive forces drove the financial industry to embrace consolidation, standardized underwriting, securitization, more consolidation, credit cards, ATMs, broader product offerings, specialized segmentation, data analytics, even more consolidation, and countless other changes. Over the long run, much of it was good, and the industry has improved efficiency and profitability over time.
But somewhere along the way, too many institutions (and too many advisors) came to believe in that seductive fiction that has fooled so many other industries– that customers are easily locked in with real or perceived monopolies, contracts, terms and conditions, EULAs, whatever– and that the path to profitability is to leverage that servitude with a cascade of new (and usually involuntary) revenue streams from the indentured.
Many bankers are truly puzzled by the virulent public reaction to their attempts to defray the costs of delivering deposit accounts. After all, they have cost accounting on their side. It has been a well-known fact amongst bank executives for at least 25 years that most checking accounts are unprofitable in a fully-loaded cost analysis. A similar Pareto Principle has long existed across client cohorts as well– the “vital few” subsidize the “trivial many”.
Why recapturing costs alone doesn’t work:
So why not focus on reducing the unprofitability of a large percentage of your clients? Managing the cost to serve is a very real issue for most firms, and I am a firm believer in the need to focus marketing efforts on clients who have a high probability of being profitable in reasonable amount of time.
What I think most firms and advisors misunderstand is that many clients at every tier actually are willing to pay more– if they receive something of value in exchange. And here’s where it get’s a little tricky– the clients get to decide what provides value and what does not– and not every client will choose the same things.
What does work:
This is where data analytics can really add the most value. Finding clients who will willingly choose to consume additional services for additional cost. (If you do it right, you can add $5 in revenue for every $1 in added cost.)
Firms that really do it right focus their efforts across all of the client segments, not just on reducing unprofitability in the lower tiers. Further improving the profitability of the top 20-25% of your clients can improve their subsidization of the masses and reduce the temptation to annoy the majority of your clients. (Banks and checking accounts may have been the original “freemium” business model.)
Let’s go back to the airlines. The ones thriving, both in customer satisfaction scores and in profitability, are improving the customer experience for all of their clients while they simultaneously raise the bar for their most profitable clientele. Doing only the latter creates ill will that will never be offset by increased profitability for the subsidizers.
You do realize that this is a people business, don’t you?
Open Forum: What is the Disruptive Potential of “mWealth”?
A recent article in Fast Company magazine (As Smartphones Get Smarter, You May Get Healthier: How mHealth Can Bring Cheaper Health Care To All) described how the technology in today’s smartphones are and could be used in modern healthcare (ultrasounds on the screens, HD cameras for cancer screening, accelerometers to guide physical therapy, microphones as stethoscopes).
It got me thinking…
What is the disruptive potential of mWealth?
…use geolocation to…
…use your HD camera to…
…use existing apps to…
What is the disruptive potential of “mWealth”?
Five Leadership Lessons From The Godfather
Today Paramount and Cinemark are celebrating the 40th anniversary of the release of The Godfather with a one day showing of the iconic film in 55 Cinemark XD theaters. The movie is my all-time favorite (with the possible exception of The Godfather II). In honor of the anniversary (which is actually later this month), I offer these five leadership lessons from the film:
You need a wartime Consigliere
When Michael was plotting his revenge against the other families, he announced that he was replacing his own step-brother as trusted advisor: “Tom Hagen is no longer Consigliere. He’s going to be our lawyer in Vegas. That’s no reflection on Tom, it’s just the way I want it.” Then to Tom: “You’re not a wartime Consigliere, Tom. Things could get rough with the move we’re making.”
Loyalty, history and track record are important factors in keeping people on your team, but don’t confuse them with having the right people with the right skills and experiences in the right positions at the right time.
–
Just because some businesses might be OK for other people, they may not be right for you
When Don Corleone sits down with Sollozzo, who is seeking financing and political protection in order to expand his illegal drug business, Don Corleone tells him: “…I must say no to you and let me give you my reasons. It’s true I have a lot of friends in politics, but they wouldn’t be so friendly if they knew my business was drugs instead of gambling, which they consider a harmless vice. But drugs, that’s a dirty business.”
Credit unions buying fintech companies. Fintech companies getting bank charters. Banks and credit unions partnering with fintech companies to create new offerings. None of these are necessarily bad ideas, but expand your offerings because it makes sense strategically, and because you are sure you understand the risks and are sure you can execute.
Don’t do it because it’s an appealing source of new revenue. If you’re simply looking for a new source of revenue, why not sell hamburgers?
“Never tell anyone outside the Family what you are thinking again”
After Sollozzo exits the above scene, Don Corleone tells this to his hot-headed oldest son Sonny, after Sonny had asked a question of Sollozzo about his proposal, revealing a potential rift in the family.
In this era of social media communications and 24/7 open-source networking and crowd sourcing, remember to keep some things just within the company. That’s how competitive advantages are created.
–
“Leave the gun. Take the cannoli.”
Experienced hit man Clemenza offers this simple advice to Rocco after he kills the traitor Paulie along an abandoned stretch of highway.
The leadership lesson: Know what’s important to keep close and what is expendable. Sometimes it’s time to move on, and sometimes it’s time to hang on. Know the difference.
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Make them an offer they can’t refuse
When the singer Johnny Fontane comes to Don Corelone for help in getting a movie role he covets, he is worried that it is already too late since the movie starts shooting in a week. The Godfather confidently reassures him that he will be able to influence the film’s producer: “I’m gonna make him an offer he won’t refuse.”
The old horse’s head in the bed routine is typically not recommended, but you should understand that dealing in the currency that’s important to the other party is the key to influence. Understanding their true wants and needs and worries. If you can help them achieve what they really want, you may very well make them an offer they can’t refuse.
…and They Don’t Hire Advisors Very Well Either
In my February 25th post They Can Always Spend More… I referenced several massive financial failures of the rich and famous. Forbes continued the hit parade yesterday in Robert Laura’s article What Broke Athletes And Celebrities Can Teach Retirees:
The statistics are startling: Sports Illustrated estimates that 78% of former National Football League players are bankrupt or under financial stress within two years of retirement. An estimated 60% percent of former National Basketball Association players are broke within five years of retirement, and recently a host of MLB players fell victim to an alleged ponzi scheme at the hands of Robert Allen Stanford.
Laura offers this advice for retirees:
If they’re not meeting expectations or able to illustrate the value they add to your relationship, then start shopping for a free agent.
How many of your clients are shopping for a free agent right now?
In countless surveys, “I don’t hear from my advisor often enough” is typically the top reason clients leave or consider leaving their advisor.
In my February 14th post How Sticky Are Your Relationships? I noted that Valentine’s day was a great day to reach out to your clients (just like any other day).
Today is Leap Day, truly a quadrennial opportunity to reach out and keep yourself off of the free agent list.