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by Jonathan Lay on November 3, 2017
This is the third article in our Moneyball series. We recommended reading the two previous posts in the series for context.
- Article #1: "Moneyball: The Digital Marketing Story for Banks and Credit Unions"
- Article #2: "Moneyball: What's the Problem with Bank and Credit Union Digital Marketing?"
Moneyball.
Banks and credit unions.
A major motion picture.
Financial institutions.
What could these two possibly have in common?
Much more than you think.
"We’ve Got To Think Differently”
Earlier in this article series, we were introduced to Billy Beane, the general manager of the Oakland Athletics and main character of Moneyball.
And the central for Billy is finding a way to build a winning team with a small payroll.
Not an easy feat for a Major League Baseball general manager.
In a pivotal scene from the movie, Billy sits quietly at a table while his scouting team evaluates players based on intangible characteristics.
The scouts discuss potential, but potential is not necessarily quantifiable.
Potential does not guarantee future success.
It’s at this moment that Billy realizes that the manner in which Major League Baseball teams evaluate and select talent is broken. And he calls his scouting team out.
“The problem we are trying to solve is that there are rich teams, and there are poor teams. Then there’s 50 feet of crap, and then there’s us,” Billy says. “And you guys are sitting around, talking the same old 'good body' nonsense, like we’re selling jeans.”
"We’ve got to think differently,” states Billy.
The issue, though, is that while Billy has been able to successfully identify the problem, he has yet to find a solution.
Enter Peter Brand.
"Baseball Thinking is Medieval"
The character of Peter is introduced in a scene in which Billy meets with the Cleveland Indians’ general manager and numerous assistants.
As a low-level employee of the Indians’ scouting team, Peter leans quietly against a wall, whispering his analysis to a nearby scout when Billy proposes various offers and trades.
And as he is thwarted in these attempts, Billy realizes the impact Peter has on the Indians’ organization, leading to a discussion between the two about the systematic failure within baseball.
Despite Peter's explanation of the problem within baseball to properly evaluate and compensate talent, the general manager of the Oakland A's remains skeptical.
"How can a kid with an economics degree from Yale and no baseball experience have this insight into the game I've been involved with my whole life?" Billy must be thinking.
But sometimes, a fresh perspective is needed.
Look Outside to Grow Inside
An epidemic failure within the financial services industry is that banks and credit unions do not understand how the digital business model works.
This is because the majority of financial institutions have built business models around physical branch and broadcast delivery.
As a result, banks and credit unions struggle to make the shift to digital.
Like Billy, banks and credit unions need a fresh perspective as well.
One of our most popular presentations is titled "Look Outside to Grow Inside” in which we examine several organizations outside of the financial services industry who have embraced change and found success in a digital economy.
We find inspiration in businesses such as Netflix, Uber, Airbnb, Simple, and Spotify who built their business models around digital delivery, disrupted existing industries and continue to modify their operating models.
Netflix is a near-perfect example.
You know the story.
Through its innovative online subscription-based model that sent DVDs directly to consumers via mail without due dates or late fees, Netflix transformed the landscape of the home entertainment industry.
Due to their inability to quickly transition to a digital delivery model, traditional players, such as Blockbuster and Hollywood Video, became irrelevant and ultimately perished.
And despite their victories, Netflix has not remained complacent.
They continued to disrupt their business model, sometimes with success (such as becoming a production company for original content like the show Stranger Things) and sometimes with failure (like the launch Qwikster, which was met with quick backlash from customers).
I believe that banks and credit unions can find inspiration in Netflix’s story, as well as other digitally-focused organizations, and discover a fresh perspective that the financial services industry so desperately needs.
“An Island of Misfit Toys”
In Moneyball, inspiration was found outside the industry, both from a man named Bill James, a baseball writer and statistician, and Peter Brand, the Yale graduate with no baseball experience.
Billy is eventually is persuaded to employ this radical endeavor and hires Peter from the Cleveland Indians to help him implement this strategy based on analytics and data.
The following scene is the basis for the Oakland A’s new blueprint for building a winning team on a limited payroll.
In this scene, Peter once again reinforces the problem in which players are currently evaluated.
“People are overlooked for a variety of biased reasons and perceived flaws. Age. Appearance. Personality.”
Peter critiques the manner in which the Oakland A's scouting team has evaluated players.
And peter provides the fresh perspective needed to overcome this challenge.
The Digital Growth Blueprint
So what does this perspective look like for financial institutions?
For banks and credit unions to find success in a digital economy, they must look at digital as a holistic system.
No longer can banks and credit unions look at technologies like their website, email, and social media as individual digital tools.
No longer can banks and credit unions cling to vanity metrics as a barometer for success.
No longer can banks and credit unions use traditional marketing methodologies and thinking in digital marketing initiatives.
Instead, a unified approach is needed to make the intangible nature of digital tangible.
And just like physical branches are built with blueprints, so to can your digital marketing and sales strategy.
The Digital Growth Blueprint can provide you with the perspective needed to have the confidence to move forward and grow in digital.
Just like in Moneyball.
On Deck >>
"The Knowledge Gap." When the status quo is challenged, fear of the unknown and fear of change can have a tremendous impact on individuals within an organization. We'll explore how Billy Beane overcame these challenges and how you can do the same at your bank or credit union.