Jim Marous: Hello and welcome to Banking Transformed, I’m your host, Jim Marous, and today we’re recording from the Financial Brand Forum in Las Vegas. We’re joined by Jeff Hayzlett previous executive from Kodak, who shared with us a little of his experience.
Jeffrey Hayzlett: We have in our organization three hundred and fifty thousand executives and we have one group that’s 400 of the most progressive, aggressive high growth CEOs and I don’t know any of them have a banking mortgage.
Jim Marous: So here today with Jeffrey Hayzlett, previous executive from Kodak, and he’s since moved on to bigger and better things using the knowledge you picked up along the way and in some cases what not to do in some cases what to do.
Jeffrey Hayzlett: I know! In some things I would like to go back to Kodak. Those were good days too, but there were some tough times back then too.
Jim Marous: And really going to talk a little bit about culture, technology because you know you had mentioned that at Kodak or any company right now, we really are at a difficult time because we have in every industry we have the up-and-comers. Some of them more than just up-and-comers like Amazon, who’re really using technology as the base. And then you have the incumbents that were traditional store shops we’ll call it or product shops that truly didn’t engage in technology as fast. What do you see as the biggest challenge out there in not just the financial services world but really in any industry right now?
Jeffrey Hayzlett: Mindsets. Always mindset. It’s always the mood and mindset. You know the mood of your employees to be able to get them to do the things you wanted to do. A lot of people talk about the culture, but first I’d attack the mood, then I go after the culture because culture takes a long time. But it’s mindset. Your own hubris of success. You know Kodak we had that, you know we believe that we would never go away that the photograph would never go away. And it never did. It just digitized. And therein lies the issue. All these up-and-coming young upstarts, or Turks, men or women, are really from a digital age and so who would have thought 10 years ago that you know I would have said to you that you’re going to let someone rent your house and they’re going to sit naked on your couch right. You’ll get paid for it and you’re going to let them have your house for a weekend or day. Who would have thought that 10 years ago if I would’ve said that, but of course now we have Airbnb or Uber or Lyft. It’s worth billions of dollars that you’re gonna let your daughter get into a car of a stranger that’s unmarked at 2:00 a.m. after drinking and having a good time. It’s just absurd. And so if you if you’re thinking
Jim Marous: Or or pay a hundred twenty five dollars a year for the ability to shop.
Jeffrey Hayzlett: Yeah exactly. But all of those things if you put the old way of doing things that you know in the non-destructive kinds of things, the strategic plans that we do every quarter, you know in the way that we do it, and rather than look at it it’s just totally changed. And you have to adapt it’s either change adapt or die right now.
Jim Marous: Well it’s interesting because the banking industry all obviously as you mentioned you can get into it a complacency mode because number one nothing’s broken.
Jeffrey Hayzlett: I mean the industry is broken and you got the money there. Right.
Jim Marous: And they’re making they’re making good money either either artificially or through regular but you can make it
Jeffrey Hayzlett: But they could be making a lot more. And they could be serving the customer. And that’s the problem. With a lot of institutions whether we talk about financial institutions or most businesses, we get into the thing of I’ve got to do it this way because that’s the way we do it. Or it meets our systems. Rather than flipping it around and saying no this is how we’re going to do business. You know we work with the hero Club, which is a group of CEOs very high aggressive high growth CEOs that are based on values. I don’t know any of them that have traditional banking relationships anymore. You know we’re using On Deck we’re using lending point we’re using you know fintech
Jim Marous: Pay Pal.
Jeffrey Hayzlett: Pay Pal, yeah that’s another one. But even then even merchant accounts we’re doing so much so fast that they’re getting their accounts shut down because they’re selling so much so fast that they think it’s fake and it’s not fake. So the rules don’t apply. And so you have to adapt you have to be quicker and that’s what that’s what everybody has to you know you have to kind of just flip it around and say OK stop what we were thinking and let’s think about it a different way. And you’ve and there’s companies have done that. I mean look at Domino’s is a great example of that. Of changing their name, changing the way they do it, changing the brand promise.
Jim Marous: Overnight.
Jeffrey Hayzlett: Literally overnight. And look what the results are. Their stock went from 70 some cents to what? One hundred and nine dollars today? All because they said “no we suck and we’re not doing it right. Let’s get out of the business of delivering you a box on time let’s get you something you want. The way you want it and let’s be real about it.”
Jim Marous: That’s intersting because Domino’s – a lot of competitors came to the marketplace more than they ever had – big names – I mean not just small shops local shops – and they truly in one commercial said “truly we’re going to change everything.” But the challenge is if the business model seems to be OK, and they think you can invest yourself out of the problem so in banking we have a situation now that is all about how much technology can you buy. And we just had the announced merger of SunTrust and BB&T and they said “combined, we’ll be able to make it so we have billions of dollars millions of dollars to now invest in technology,” but isn’t there a missing link there? I mean success is not gonna be built on how much technology that you can go buy.
Jeffrey Hayzlett: Well it can’t hurt, but you want to know what it’s being used for in the right reasons. So you don’t just build it to build it and hope they come because all you have is a baseball field a middle Iowa and no one to come to it. But the key thing is to always get back and capture customer behavior. And I think that’s a lot of what we fail to do. So in businesses we traditionally we we put up 800 numbers because we want them to deal with us that we run from 8 to 5. Who has that anymore. You know we’re working 24 hours seven days a week you know most entrepreneurs quitting a 40 hour jobs like work under 20 hours a week you know. So they want to be available all the time and with the mobile phone the mobile phone the most personal device in the history of the world. You know where your phone is more you know where your children are, you know. In fact if you lost your phone and your kids in the mall which one would you go looking for first? It’d be the phone.
Jim Marous: The phone possibly find my kids.
Jeffrey Hayzlett: Exactly right. Exactly. So that has changed the way we’re doing it. And so that’s why Zuckerberg and all these great business leaders are going mobile first, mobile first, and it’s really mobile always. And you’ve really got to get that mindset. And and it’s just it’s just a different way of doing it. Now it doesn’t mean that the old Baby Boomers can’t do that. I’m a I’m a millennial in a Baby Boomer body. You know, so you can do those things right. You can do those things. It’s all about mindset. It’s all about mood. It’s all about saying, no we’re not gonna do status quo. And by the way, you mentioned that it’s been better than it’s ever been before. That’s the time you change it. Right. That’s before it gets worse. Because when it’s getting worse, you’re limited on your options, you can’t do as much as you’d like to do. And so you really want to do those things while you’re moving to the top or at the top is the best time.
Jim Marous: And Kodak’s transition took literally decades for it to all the sudden get uprooted. Blockbuster the same way. But the reality is. We just talked about Dominos. The reality is that truly did happen overnight. Yeah change can happen in an instant. So if Amazon tomorrow decide to offer a checking account in conjunction with another bank and use a retail funding and their Amazon Prime funding to say I’m going to pay you one hundred twenty dollars a year to open a cheque count with me. Is that not going to be dynamic and we’re not talking about an Amazon cheque account. We’re talk about using the Amazon brand and leverage of their insight.
Jeffrey Hayzlett: It’s in by the way from industries that are likely predatory to your own. S o you know very aggressive. Listen in the financial world there’s always been some unwritten rules. It gets rough and tumble. Let’s be clear. But between a community bank and a community bank there’s always this unwritten handshake. There’s always this unwritten. Let’s have some respect. There’s going to be players that enter this market that have no respect for the old old way of doing things.
Jim Marous: And that’s what you get. And there’s ways now to do it in such a way that you don’t have to go up against regulation. There’s many different ways to set up.
Jeffrey Hayzlett: There’s always away.
Jim Marous: I mean that’s how Amazon’s gonna be offering pharmaceuticals and maybe healthcare. There’s always a way.
Jeffrey Hayzlett: There’s always a way, but they still don’t pay sales tax. Who knows why, but there you go!
Jim Marous: When you’re talking about transition. We’ve talked about change in culture. What is the biggest challenge that we have out there.
Jeffrey Hayzlett: Well first of all it’s really the vision of what it is you want. Because not everybody wants to be able to do that, and then to be able to write it down the state. I mean it sounds simple, but we find that with our hero companies. What I just wrote about in Hero factor; those companies that have a stated vision and that people can say what it is, they earn more money. They gross more money. They have happier customers. They have more engaged employees. And they have vendors who want to do business with them. That’s a pretty good thing, but it all starts with what is it we’re gonna really do. And do we all have similar values around that? That’s always the way.
Jim Marous: Well I’m wishing that in banking. Banks for the most part know what they have to do. Know pretty much how to do it. It’s pulling the trigger and doing it. And you know unfortunately (or fortunately it depends on what you’re perspective is) they’re not led by a number of older baby boomers that are millennial bodies or the other way around I guess it is.
Jeffrey Hayzlett: I mean think about it. I look at my business. I serve on numerous boards, own a lot of businesses, own some businesses that I actually run in addition to owning some more. I can’t even tell you where the cheque book is. I can’t tell you where that’s at. I don’t even know. I haven’t been inside of a bank in two years.
Jim Marous: My only reason for getting a bank recently has been not necessarily the complaint, but something’s happened that they don’t get it and you go.
Jeffrey Hayzlett: Or I need a notary or something like that. I mean that’s typically what you see. You know when I say don’t go to a bank, I run and get it at an A.T.M. machine right. And that’s what I’m always doing.
Jim Marous: And they count as a branch transaction, you’re going like “a little wrong.”
Jeffrey Hayzlett: Yeah, I flew here today with no cash in my pocket. Zero. No cash.
Jim Marous: It’s amazing how you can go. I’ve gone weeks on a trip overseas, and never picked out the wallet except once while for a card. But usually it’s all phone based.
Jeffrey Hayzlett: Yeah.
Jim Marous: Would you think about that? You don’t even need your wallet. They said that 72 percent of the retailers in the United States now except Apple Pay you not to think about where you go anymore. It’s everywhere.
Jeffrey Hayzlett: You just gotta load it.
Jim Marous: So what is the biggest takeaway of your book, The Hero Factor.
Jeffrey Hayzlett: The really biggest thing that we saw was: pick a side. Pick a side. I don’t care what it is you want to be, but be it. And whether you want to be a wanna-be, whether you want to be a do-gooder, whether you want to be an ass-hat, whether you want to be a hero company, a good co., or even an operational excellence kind of company. Bottom line or key thing is to pick a side. Don’t tell me you’re an operational excellence company with hero values. It’s not the same thing. You know you’re going to lay people off, you’re gonna do things, you’re going to put profit over people, as opposed to a hero company that puts people over profit.
Jim Marous: And the reality of the people are now driving the ship.
Jeffrey Hayzlett: Oh yeah, without question.
Jim Marous: Thank you very much, Jeffrey. Appreciate the time. And I’m glad you could make it to the financial brand for me. And we’ll see you again.
Jeffrey Hayzlett: It’s awesome to come.
Jim Marous: Hey great.
Jeffrey Hayzlett: Thank you.
Jim Marous: Thank you.