What are banks actually good at, and does knowing that matter?

If banks don’t know what they’re good at, how can they know what to focus on, and what to stop doing altogether?

I’ve found an excellent way to be unpopular in a bank - it’s to ask what we’re really good at.

Picture a meeting with the global head of something-or-other. They’ve told you how over 23 years they’ve built up our capability in this domain until we’re better at this or the other bit of it than all the other banks. Our product’s the best in the market, and makes these great margins.

“So..." I ask, "... how did we get so GOOD at it? What bit do we do best, how did we continuously polish it?" ... until it shone like the global head's own bald patch, and which of its adjacencies could be further improved?

The answer, often times, is “well, we really don’t jibjab the customer very well. And our flipflap assessment is pretty shaky. And the last time we changed the mishmash was 12 years ago. And we didn’t manage to do this, and our project to fix that got canned, and compliance wouldn’t let us flim our flams … and … and … ” and they tail off with a wistful gaze.

Depending on how near I am to the exit, and how much of my stuff is still spread over the table and not packed up for a hasty exit, I might press on. “But we must do some of it pretty well, or how did we get so GOOD? Do we do anything badly?” Then I might ask the question that darkens the mood - “Why do we persist in doing some of these things badly? Why not just stop doing them if we can’t do them well, and let someone else, who might be good at it, do them?”

It’s not that we do any of it that badly. Parts of it really are best in class, all of it has been built and designed by highly talented team workers. It’s more a picture of something that’s good enough, does enough, satisfies enough, without being excellent in any of the parts.

There’s a bigger picture underlying all this. What if we could write down, for every product we sell, the bits we do really well, and the bits we don’t. Could we then draw a line of competence below which we admit failure and then aggressively try to get rid of all the processes we recognise we’re never going to be able to make excellent. Without these now abandoned or outsourced processes to worry about, could we not then focus our efforts on making the things we’re passably good at better? Might that result in a product comprised of pieces of excellence?

Asking the question might even be the right place to start.

Naturally opinions are my own, and I don't pretend to represent the views of my employer.

Next time ... How might a stripped-down bank create new relevance?