“If you are doing customer-driven leadership the right way, it can’t fail because it’s self-correcting.” -Daniel Hammond
Most financial brands pride themselves on providing outstanding customer service. Still, the financial industry is one of the least-liked industries in the world. Customers have little love left for their banks.
Why the mismatch? Daniel Hammond says it’s a failure to practice genuine customer-driven leadership. Many financial leaders don’t have servants’ hearts and in the simplest terms, financial brands still aren’t listening to their customers.
As a managing partner of Customer Driven Leadership LLC and author of the book Customer Driven Leadership, Daniel sees evidence of this frustrating issue up close every day. He shared his insights with James Robert Lay on the Banking on Digital Growth Podcast.
The Courage to “Call Out the Ugly”
Daniel Hammond has a diverse and unexpected background that informs his work in customer-driven leadership. He’s a former U.S. Army instructor who’s traveled around the world to understand people’s struggles as they cope with challenging circumstances.
He built a nursing school in Central America in partnership with organizational psychologist Dr. Ted Anders and co-founded the LoveLight Campaign. He also works with professionals in corporate environments to prepare them for potential business disasters and survive organizational transformations.
Daniel views the financial industry’s customer service struggle as a servant leadership issue. Instead of welcoming the opportunity to work as servant-leaders, many financial executives are still hung up on old-fashioned notions about cutthroat Wall Street-style competition. The focus is on outpacing other financial brands rather than providing outstanding service.
This also brings up the issue of company culture.
Culture can be both a powerful force for transformation and a powerful barrier to it - and it tends to be the latter at traditional, buttoned-up banks and financial organizations.
“You need to have a culture that’s safe where somebody can ‘call out the ugly’ of an organization,” Daniel says.
Do the rank-and-file workers at your financial brand feel empowered to speak up?
If they can’t even speak up for themselves, it will be very hard for them to speak up for your customers.
What is Customer-Driven Leadership?
Customer-driven leadership gained popularity in the mid-90s as a model for organizational transformation. Daniel describes it as “servant leadership meets entrepreneurial problem-solving, focused on critical data and satisfying customers.”
Organizations adopting customer-driven leadership are what Daniel calls “self-winding” because they use self-correction as a tool to fuel continued growth and success. “If you’re doing customer-driven leadership the right way, it can’t fail you because it’s self-correcting,” he says.
Today, in the age of automation and artificial intelligence (AI), it’s vital to take a fresh look at the concept of customer-driven leadership and decide if we’re falling behind the times. A financial brand can invest in the most cutting-edge technology in the world, but it’s impossible to innovate away bad leadership.
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Daniel stresses the importance of “focusing on the things that matter” by bringing the focus back to the customer. He views himself as servant-hearted and encourages others to find their own servants’ hearts.
This includes acknowledging that your customers are individuals with unique needs and desires. They want and deserve extremely customized service. If you’re making broad, sweeping statements about what your customers want, you’re probably missing the point.
Servant leadership requires us to look beyond ourselves and take the risk of asking, “How can I serve you?” Your customers’ answers might be resource-intensive and extremely challenging to accomplish, but it’s worth it.
Going Beyond the Gold Star
Daniel explains that in the military, as in many aspects of life, people get gold stars for service. However, there are “only so many gold stars to hand around.” If you have 100 soldiers or employees and just 2 gold stars to give out, there are going to be 98 disappointed people.
Servant leadership sets the gold stars aside and uses a new way to assess and reward team talent. It’s qualitative instead of quantitative. Instead of asking, “Who’s #1?” it asks, “How is each person contributing as a teammate? How well are people working together to be successful as an organization?”
This new style of teamwork and accountability includes implementing an ongoing feedback loop where leaders provide specific goals and workers share their struggles, ideas, and other feedback to inform the process. Everyone is looking for ways to help the entire process work more beneficially for the end customer.
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“Customer-driven leadership … It completely flips the hierarchy of the organization so the leader is at the bottom, instead of me being a team leader and telling my team, ‘Hey, I think you're an 8 and you're a 7 and you're a 5,’” Daniel says. The team members are becoming the leaders of the process and the leaders operate more as facilitators or mentors in the background.
James Robert explains that this style of “org chart flipping” is very uncomfortable for CEOs and C-suite executives. “I have seen people get offended,” James Robert says, “and it’s very interesting to watch their reactions. They get offended because they have perceived themselves, up to this point, sitting at the top.”
Now their world is upside down. They’re suddenly at the bottom. Some top-level executives react with anger and an outright rejection of the concept of servant leadership.
Daniel explains that the author John Maxwell would call this “having a low leadership lid.” In Maxwell’s Law of the Lid, people who are unwilling to listen to feedback - those with low leadership lids - are still able to reach the highest levels of formal leadership. Then, from their thrones on high, they refuse to serve others and effectively keep a lid on organizational success and excellence.
The Value of Coaching at Financial Brands
Coaching is a natural part of the customer-driven leadership approach. It’s an activity involving the key aspect of servant leadership, which is asking what’s needed and self-correcting to build the capacity to meet those needs.
As James Robert says, “I've been a big believer that you can establish a culture of coaching within a financial brand, bank, credit union, or fintech that really opens up exponential growth opportunity to begin to coach account holders - not just offer them a loan or a checking account or an online banking platform or a mobile banking platform, but truly put the transformation of people over the commoditized transaction of dollars and cents.”
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Daniel agrees and adds that remote work offers new opportunities for business coaching. In a world with a vibrant mix of remote, in-person, and hybrid workers, companies must find new ways to bring people together and continue the shared organizational experience.
“By investing in your people,” Daniel says, “you make them better in all aspects and you also increase their loyalty because they see that you care about their future and you want to empower them to serve your customers better.”
Daniel’s company takes this process a step further by providing an assessment that helps organizations understand whether or not they’re making progress. He says, “After you get some coaching, you can go back and see: How much did it move the needle?”
James Robert shares that in his work with digital transformation, he’s seen coaching, training, and development become the first things cut from budgets in tough times. During the pandemic, many companies cut their training budgets without a plan to bring them back anytime soon.
Now these companies are struggling to understand what transpired at their organizations in terms of floundering leadership and customer service.
When you fail to invest in training and supporting your workers for years on end, it’s harder to do business effectively.
“You're selling out your future when you give those things up,” Daniel says. The effects could be felt for years or even decades to come, especially in organizations that are still in denial.
Key Takeaways for Financial Brands
Here are some key takeaways Daniel shared that can make an impact for you and your team.
- Keep your eye on the future. Don’t get so deep into daily survival mode that you forget about the bigger, longer-lasting goals you’re trying to accomplish.
- Build a psychologically safe culture, where people feel empowered to “call out the ugly” in the organization without fear of penalty.
- Consider hiring a neutral outside consultant who can help you look into the dark corners of your organization and shed light on what’s happening there.
- Take good care of your people internally and it will be easier to take good care of your customers externally.
- Focus on small, incremental things you can do to embrace growth and transformation. Remember, big successes are built on small victories.
To learn more about self-correction in servant leadership, read the book Customer Driven Leadership or connect with Daniel Hammond on LinkedIn. Reach out to James Robert Lay and access more resources about digital transformation at digitalgrowth.com.
This article was originally published on January 27, 2023. All content © 2023 by Digital Growth Institute and may not be reproduced by any means without permission.