Financial institutions have long followed a tradition of staying the course. Unlike their fintech counterparts, the overwhelming majority of banks and credit unions follow the competition, create the same products and offer the same services. However, consumers have changed. They have significantly higher expectations on responsiveness, accessibility and overall organizational performance than they had in the past.
This transformation is due to more of what has occurred outside of banking than within it. Customers can now have online orders delivered same day. They can get medical advice from anywhere via telemedicine. They even can improve their car’s performance with a few mouse clicks. Banks and credit unions don’t have the luxury to be the exception.
Many institutions are focusing on technology to bridge this gap. However, the ever-widening disconnection from customers stems from an out-of-date mindset, focused on profits over purpose. Better stated, financial institutions must be as serious about values as they are about valuation, and just as passionate about culture as they are about capital.
Instead of applying the same benchmarks and mindsets of the past, a new approach is required to truly transform. Banks and credit unions urgently need to establish a customer-facing, externally focused way of thinking, because the window of opportunity is quickly closing. They must throw out their existing and antiquated mission statement and create a new customer mission to guide organizational culture, values and behaviors, and serve as the foundation for fostering new innovation.
Why Traditional Mission Statements Fall Short
A traditional mission statement communicates the fundamental purpose and values of a business. In simpler terms, a mission statement should make it clear why your institution exists, and what your organizational culture stands for. It should guide decision-making and keep business on track over the long term, when outside factors can make it easy to veer off course.
Many banks and credit unions, however, have trouble understanding what makes a mission statement actually useful. Take for instance the following mission statement, which belongs to a major U.S. bank:
“At [bank name], our educated and motivated team will help us become the leader in our market. We are committed to: consistently providing exceptional service, offering innovative products, creating an exciting and stimulating work environment, improving the quality of life in the communities we serve, maintaining high ethical standards, complying with all laws and regulations, achieving profit to finance growth, and create value for our shareholders.”
This isn’t a mission, but rather, to be blunt, it’s verbal diarrhea. While it’s clear what this bank’s function is, the statement doesn’t provide any insight to how the organization is different, how employees should perform, or how (most importantly) they address the needs of the customer.
Your mission statement is the nucleus of your organization and, by extension, its cultural infrastructure. If you can’t clearly communicate your purpose for being in business, whom you’re serving, and how you are creating value for them, then you most likely won’t be able to create an effective organizational culture to support that mission.
Most traditional mission statements are ineffective for setting strategic direction because of their generic and ambiguous nature. While they might satisfy a corporate need to be “all things to all people,” they provide no clear guidance for the organization in terms of purpose or direction for strategic innovation.
How a Customer Mission Breaks Down Silos
Far better is to have a customer mission. A customer mission isn’t about you (the organization), how you do things (your process) or generic terminology (corporate speak). It is about who you serve (the customers), outcomes (the results) and authentic expression (the passion). It is a document, but it is much more than a static document.
Customer missions are ideal for helping break down organizational silos, which inherently hamper a financial institution’s ability to effectively understand, evaluate and respond to customer needs.
Silos are not inherent to business, but formed by leadership and culture — in short, leaders allow silos to develop by way of reinforcing and rewarding silo behaviors. At their core, silos work to protect their own interests. For example, one department might not tell another department that customers are complaining about the performance of product X, simply because it’s not to their benefit. Or neglect to share critical information with other teams, simply to retain ownership of the process. Some silos even use different processes for the same business function within the institution, creating extensive inefficiencies.
“The big issue with siloed teams is they see the most value in their internal tasks and roles, rather than the goals their customers are trying to accomplish.”
— Andrea Olson, Pragmadik
Silos also prevent a company from effectively responding to customer needs. This negatively impacts the customer experience, often times forcing redundancy, repetition and lengthy processes.
The even bigger issue with siloed teams is they see the most value in their internal tasks and roles, rather than the goals their customers are trying to accomplish. This internal focus is often rewarded by silo leaders, and hence the behavior is reinforced and repeated to the detriment of the bank or credit union.
When leadership pushes for new innovations and ideas from the organization, employees struggle to meet the need. New programs get announced, and then fade into the background within a matter of months.
To break this pattern, a mental shift is required — from being focused on the role, to being focused on the customer. A customer mission helps lay this necessary groundwork. When financial institutions don’t have a customer mission in place, they don’t have a usable foundation from which to effectively design and develop a clear and focused strategy around customer needs.
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Guide to Establishing a Customer Mission
There are four distinct components to a well-crafted customer mission:
- Instead of “What we do” — ask “What do customers want to accomplish/achieve?”
- Instead of “How we do it” — ask “How do customers want to be served?”
- Instead of “What value do we bring” — ask “What impact do we have on our customers?”
- Instead of “Why we do it” — ask “Why customers care about what we do?”
This shift creates a targeted focus on your institution’s purpose, through the lens of the customer. It serves as a framework for action, and serves as the reason behind what, why and how for everything you do — the drivers for not only you and your internal team, but for why your customers choose you over your competitors.
Having a customer mission alone does not make a customer-centric financial institution, but it does serve as the internal compass to begin getting teams re-aligned. By utilizing a customer mission over a traditional mission statement, a focus on the customer can start to become an ingrained behavior, rather than simply quarterly talking points.