Agile Approach to Branch Design

  • June, 2014

More financial institutions are taking an innovation approach to their branch design by trying different formats to see what works. Financial institutions are fighting a huge internal battle to make their organization 'agile' [A term that has gained popularity in the software project world to mean iterative and incremental development]. There is an acceptance / understanding that ‘big ships turn slowly’. Rolling out new brands with completely greenfield processes, technology and staff to unshackle themselves from their legacy organization is one approach. Taking a tech-company start-up approach is an option for the new digital channels but can it be applied to reinventing branch networks? Paul Graham of YCombinator summarized his advice to start-ups. Written in 2009, it is as relevant today and can be applied to branch redesign:

Pick good cofounders.

Match the team to the goals of branch redesign. Get retail experts, get architects, human interaction designers, focus groups, technology innovators. Have the team that matches the transformation aspiration.

Launch fast. Let your idea evolve.

Launching teaches you what you should have been building. Engage users, both customers and staff, in the branch redesign. Users appreciate engagement; the sense of ownership with users positively impacts the outcome. Iterate. Accept that initial assumptions and plans will change as you constantly learn about the effect of each small change.

Understand your users.

Better to make a few users love you than a lot ambivalent. Offer surprisingly good customer service. Research the users before you implement change. Constantly analyse the impact of change on users. Talk to users. Ideally you want to make large numbers of users love you, don’t try to make everyone happy, you can’t. Knowing the target market segment is key to defining branch redesign. Under promise and over deliver. Success is brand loyal customers not branch traffic.

You make what you measure.

Merely measuring something has an uncanny tendency to improve it. Share the information. Users will want to be part of the success of the best branch, best service or other metrics that match your corporate goals.

Spend little. Get ramen profitable.

Financial institutions do big budget projects! "Ramen profitable" means a start-up makes just enough to pay the founders' living expenses. Iterating with smaller budgets will make it easier to embrace risk in the branch redesign and try again. Accept that adoption of true innovation takes time. Unlike most start-ups, in complex organizations it is more difficult for revenue to be associated to the investment. Your branch redesign may drive brand awareness, mobile adoption, digital account origination or other desirable actions that are not directly attributable to a customer in branch interaction.

Avoid distractions. Don't get demoralized or give up.

Nothing kills start-ups like distractions. In a financial institution the dependencies of providing cross channel consistency, regulatory compliance and the transition from the old way of working to the revitalized digital branch are all distractions. Your branch lives is a wider ecosystems that must work in harmony to succeed. Manage distractions. The underlying cause of failure in a start-up is usually a lack of focus. Understand the risk of a demoralized team and make a conscious effort not to be defeated by it. Celebrate success; share that success. If you now solve 85% of customer issues while they are in your branch, tell them. When you get to 88%, celebrate! Cupcakes for everyone!

According to Paul Graham “The essential task in a start-up is to create wealth; the dimension of wealth you have most control over is how much you improve users' lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it's mere effort to make it” Branch transformation should be approached similarly.