Jeff Judy

Jeff's Thoughts - January 28, 2015

The Decider: A Who or a What?

Regardless of one's politics, everyone can agree that former President George W. Bush had a creative approach to language. He famously put a new term into common use when he declared, "I am the decider."

And certainly, being the decider is a key function of leadership. It isn't simply a matter of making all the decisions, like some kind of king. It is a matter of working with the organization to reach the right decisions and get them implemented, to make those decisions part of the culture. Key decisions only matter when they are integrated into practices at all levels throughout the organization.

Now, mentioning a "king" reminds me of another word associated with heads of state: abdication. King Edward VIII famously chose romance over royalty and abdicated the throne.

And sometimes bank staff, and even leadership, abdicate rather than decide. This is human nature, of course, but ducking responsibility is often abetted by non-human nature, in a sense: technology.

Automation is proceeding at a rapid pace in our industry, and for the most part, it makes our institutions more efficient at the same time it offers more choice and convenience to our customers. But it cannot do that all on its own. And automation is only valuable to the extent that it integrates those human decisions into technology-delivered practices.

For instance, small business credit scoring has greatly streamlined that function at many banks. Credit-score assisted decisions are being cranked out for credits that are many times the size of the credits that were scored ten years ago.

But as the credit scoring engines get more sophisticated, there are increased demands to make sure someone is in charge of the machine, we might say. First, the parameters, thresholds, and responses to various outputs are still under your control, and they need frequent review with clear accountability.

Second, your culture needs to protect your customers from being reduced to mere inputs. That means being vigilant about staff who tell customers, "the computer says ...". But it also means that when an application produces a surprising recommendation, when what looked like a sure approval gets a low score, someone checks to make sure the data were entered accurately, and someone takes the time to understand what tipped the score, if it is correct.

Additional technology-delivered services include your mobile app and your web site. While customers young and old welcome the convenience, they may prefer different approaches, or have different needs. Your younger customers use technology efficiently, and you want to attract younger customers now, even though they may have limited assets, because they can become much more valuable over time. On the other hand, while your older customers may need a little more guidance in using your technology, many of these customers already have substantial assets.

In short, one-size-fits-all may not serve your interests. But technology development is often driven, on the one hand, by the younger generation, including programmers and web designers, and on the other, by the enthusiasm those programmers and web designers may have for bells and whistles, for what the latest trends in design might be. Someone needs to keep your way of doing business clearly front and center.

Leadership means making sure that all the decisions make it fully into the delivery of financial services, whether that delivery is by a person or by a device. Don't hide behind technology to abdicate that responsibility.