The Bank that doubled new business in its SME division. Just by asking the right questions.

There is a crisis of trust between small companies and their Bank.  74% of small businesses don’t believe that their Bank understands their business and, worse, even cares about them.

[pullquote]Does a whole generation of relationship managers simply not care?[/pullquote]

And the gap in understanding isn’t getting any narrower; in a recent survey of corporate CEOS 80% confidently believed their companies offered excellent service. Only 8% of their customers agreed.

[pullquote]Those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it[/pullquote]

This is a crisis. The small business market represents the key area for growth globally. There are 5.2 million ‘SMEs’ in the UK alone.  Banks who want to retain their share of that market need to act fast to transform how they approach the market.

“We made a decision to invest in the people, not the product,” says the head of a UK Challenger Bank. “In recruiting relationship managers we looked for people who were good listeners and were patient, who were willing to understand the needs of the business. We attribute our 700% growth to the relationship approach not the products or the price”.

Yet most UK Banks don’t seem to have really got the message. In interviewing mid market CEOs, positive stories of banking relationships are rare. As one CEO explained “we recently acquired a business and needed new banking facilities. We interviewed a few Banks. I was shocked. Only one stood out; they came at it from a different angle. They weren’t interested in where we were now. They were interested in where are you going? What’s our next move?”

In other words, they took the trouble to understand the business and demonstrated that they cared.

Another CEO was blunt in his exasperation“Here’s what I don’t understand…. The first thing I would do with MY client is to actually understand their business!”

So, what’s the problem?  Does a whole generation of relationship managers simply not care? It hardly seems likely. Instead, in our experience, it’s simply down to how corporates train and reward their people. To turn this around requires a radical rethink of how their people understand small companies. The alternative is to watch as ‘challenger’ businesses that understand this steal this lucrative market for good.

Put simply, those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it. And that requires two distinct, and currently generally poorly developed, skill sets.

[pullquote]CEOs of fast-paced businesses crave thought-provoking conversations, perspective and real challenge.[/pullquote]

The first is a range of human intelligence, listening and coaching skills. Rapport is not good enough. To be effective, client-facing teams must have the skills and emotional intelligence to step into the client’s shoes. As one CEO said “The best relationships are when the advisors are solely looking at things through my eyes.”

Secondly, the relationship manager needs a much more holistic and strategic set of business intelligence skills. Without those he or she offers little value and will probably default to a product conversation. CEOs “hate dealing with companies who are trying to sell a product”.

In fast-paced businesses, CEOs don’t care about products and propositions and are not much impressed with ‘rapport’. What they crave are thought-provoking conversations, perspective and real challenge. That is what creates the greatest value. As one CEO put it  “good relationships challenge my thinking. You’re never going to get anywhere if you don’t challenge your client”.

And that takes the kind of broad business knowledge and confidence totally lacking in most relationship managers.

So, what’s the answer? Recruit MBA students? Send all of your people back to college? Not really. Quite apart from the cost, most MBA and business programmes don’t address the reality and experience of running a real private business. What is needed is a business education programme designed by entrepreneurs and delivered by entrepreneurs; a programme that teaches corporate relationship managers how to engage with business owners emotionally and how to offer real business challenge and perspective.

Frustrated by their experience of relationship management, a group of entrepreneurs set out to design and deliver just such a programme. And the results have been remarkable. In research on 600 global banking relationship managers who had experienced just a two day programme (with on-line learning support), 95% had won business from new customers and, remarkably, 93% had uncovered significant new business from existing customers simply by learning to asking the right questions.

These results have been replicated again and again around the world. The impact on the relationship between Bank and client is profound. One banker reports clients asking ‘have you just been on an MBA?’ as a result of his new skills. Another reports on the impact on his relationships ‘I would describe in one word the effect of the programme as ‘MAGICAL’.

And this success is almost universal with relationship managers commonly reporting clients emailing them to say ‘that was the single best meeting I have ever had with a Bank’ or  ‘this is first time I’ve ever experienced a meeting like this with a Bank.’

And the impact on the confidence and enthusiasm of the RM is just as profound. Managers are left enthused by the programmes which, because they are delivered by entrepreneurs, regularly score an NPS of 100. As one banker said ‘this is the best programme I have been on in my working career’ and another ‘this has been mind-opening, game-changing, I have so much confidence in myself’.

In an age when barriers to entry have never been lower and challenger businesses are rampant, 74% of customers feeling their Bank doesn’t understand or care about them is unsustainable. We’d love to show you how some simple human intelligence and business education can turn this around for your business and transform the effectiveness of your relationship management teams in the SME market. Do please get in touch.


Bridging the crisis of trust between big and small businesses

There is a crisis of trust between small companies and their big business suppliers. 74% of small businesses don’t believe that the banks, tech and utility companies that seek their custom care in the least bit about their business.

And the gap in understanding isn’t getting any narrower; in a recent survey of corporate CEOS 80% confidently believed their companies offered excellent service. Only 8% of their customers agreed.

[pullquote]Those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it[/pullquote]

This is a crisis for all large corporates. Whether in banking, accountancy or technology, the small business market represents the key area for growth globally. There are 5.2 million ‘SMEs’ in the UK alone.  Big companies who want a share of that market need to act fast to transform how they approach the market.

“We made a decision to invest in the people, not the product,” says the head of a UK Challenger Bank. “In recruiting relationship managers we looked for people who were good listeners and were patient, who were willing to understand the needs of the business. We attribute our 700% growth to the relationship approach not the products or the price”.

[pullquote]Does a whole generation of relationship managers simply not care?[/pullquote]

Yet most UK Banks don’t seem to have really got the message. In interviewing mid market CEOs positive stories of banking relationships are rare. As one CEO explained “we recently acquired a business and needed new banking facilities. We interviewed a few banks. I was shocked. Only one stood out; they came at it from a different angle. They weren’t interested in where we were now. They were interested in where are you going? What’s our next move?”

In other words, they took the trouble to understand the business and demonstrated that they cared.

And it’s not just a problem confined to banking. Another CEO was blunt in his exasperation with all his corporate relationships. “Here’s what I don’t understand about big corporates. The first thing I would do with MY client is to actually understand their business!”

So, what’s the problem?  Does a whole generation of relationship managers simply not care? It hardy seems likely. Instead, in our experience, it’s simply down to how corporates train and reward their people. To turn this around requires a radical rethink of how their people understand small companies. The alternative is to watch as ‘challenger’ businesses that understand this steal this lucrative market for good.

Put simply, those who seek a sustainable relationship with fast-paced small businesses need to demonstrate that they understand their business and care about it. And that requires two distinct, and currently generally poorly developed, skill sets.

[pullquote]CEOs of fast-paced businesses crave thought-provoking conversations, perspective and real challenge.[/pullquote]

The first is a range of human intelligence, listening and coaching skills. Rapport is not good enough. To be effective, client-facing teams must have the skills and emotional intelligence to step into the client’s shoes. As one CEO said “The best relationships are when the advisors are solely looking at things through my eyes.”

Secondly, the relationship manager or salesperson needs a much more holistic and strategic set of business intelligence skills. Without those he or she offers little value and will probably default to a product conversation. CEOs “hate dealing with companies who are trying to sell a product”.

In fast-paced businesses, CEOs don’t care about products and propositions and are not much impressed with ‘rapport’. What they crave are thought-provoking conversations, perspective and real challenge. That is what creates the greatest value. As once CEO put it  “good relationships challenge my thinking. You’re never going to get anywhere if you don’t challenge your client”.

And that takes the kind of broad business knowledge and confidence totally lacking in most corporate ‘sales’ people.

So, what’s the answer? Recruit MBA students? Send all of your people back to college? Not really. Quite apart from the cost, most MBA and business programmes don’t address the reality and experience of running a real private business. What is needed is a business education programme designed by entrepreneurs and delivered by entrepreneurs; a programme that teaches corporate managers how to engage with business owners emotionally and how to offer real business challenge and perspective.

Frustrated by their experience of corporate relationship management a group of entrepreneurs set out to design and deliver just such a programme. And the results have been remarkable. In research on 600 global banking relationship managers who had experienced just a two day programme (with on line learning support), 93% had uncovered significant new business from existing customers simply by asking the right questions.

In an age when barriers to entry have never been lower and challenger businesses are rampant, 74% of customers feeling their suppliers don’t understand or care about them is unsustainable. We’d love to show you how some simple human intelligence and business education can turn this around for your business and transform the effectiveness of your sales and client teams in the SME market. Do please get in touch.


Catalyst or Catastrophe? What's the role of shareholders in purpose-led businesses

At a recent purpose in business event the Corporate Affairs Director of one of the more respected businesses on the planet said to me ‘we would love to do more on our social agenda but we are restricted by our shareholders. No public business can willingly make a decision that means it will make less money.’

Given all the evidence that responsible business delivers a better and more sustainable return in the long run, is it really true that institutional investors have such a narrow focus on short-term return?

[pullquote]People with good intentions find themselves supporting evil deeds due to systemic or even regulatory inconsistencies.[/pullquote]

We thought we would find out by getting leading lights from the pensions and investments industry around the table with global corporate leaders, academics, charity heads and a sprinkling of entrepreneurs to have a no holds barred debate.

What we found out was a complete surprise.

According to this group of financial and business leaders, the idea that business is responsible not just for shareholder return but also for the wider good of society has become widely accepted.  A gradual shift to a more purpose-led business model seems inevitable and the responsible investment community wants to be seen as a driver not a hindrance of this.

“We are beginning to see that we can prove that socially responsible business offers a better long-term return”.

 “We are now absolutely starting to look at environmental, social and governance factors in our investments”.

Yet, it was also clear that this was a vastly complex issue. Investors are subject to a range of often conflicting forces.  People with good intentions find themselves supporting evil deeds due to systemic or even regulatory inconsistencies.

“The long term might be clearer but on an average investor cycle of 200 days what is the incentive for the investor? “                                                                    

“Pension law is clear; the sole duty of the trustees is to maximise the return on behalf of the beneficiaries.  This does not always support long term responsible business”

“The system we provide is not serving the outcomes we seek”

[pullquote]The system we have allowed to develop is still weighted towards driving short-term, profit-led decision-making[/pullquote]

And the interest in the wider good is by no means universal in the investment world.

“The growth of PE has been phenomenal and the culture of PE is the ruthlessly short term.  Nothing else is relevant”.

Despite evidence that the tide is beginning to turn, the system we have allowed to develop is still weighted towards driving short-term, profit-led decision-making. Which begs the question is looking at investors as a catalyst or constraint to purpose-led business even asking the right question?

Perhaps a fundamental reappraisal of what society wants is needed.  For some in the room that meant a fundamental change to how the dividends of business are distributed.

“Businesses that are not purpose-led are already obsolete. They just don’t know it yet”

“We have to have the courage to admit that return to shareholders must be compromised if we are to protect people and the environment. To pretend otherwise it is dishonest”

For others there were different and complementary business models emerging.

“Already there are 1 million people employed by social business in the UK.  In India there is a dairy company bigger than Nestlé owned by 3 million poor farmers.  Business models are changing. And changing fast”.

There was broad agreement that despite poor practice, confused regulation and hidebound legacy structures, change was coming.

“We’re overstating the importance of companies here. The life-cycle of a company is only 15 years. The typical model is changing fast. Businesses that are not purpose-led are already obsolete. They just don’t know it yet”.

And what is driving that change is society itself.

“There is a talent time-bomb. Talent will drive the change. Ultimately, no-one wants to work for an asshole.”

“The sentiment that this is not good enough is shared very widely now. Institutional brands will increasingly be judged by their actions.

This is a change driven not by governments nor by institutions but by an alliance of the socially responsible. Socially-aware consumers, morally-focused business leaders, investors with a longer term view and talent voting with their feet are starting to create a shift in attitudes, all galvanised by the power of social media and global connectivity.

 “The solution will come when each of us, as individuals, simply say ‘this is not tolerable anymore”

“You just do the right thing because it’s the right thing to do.

[pullquote]‘As an entrepreneur I simply don’t get why this is so hard.  You just do the right thing because it’s the right thing to do.’[/pullquote]

Clearly we are at an early stage and it is far from clear how far and how quickly this change will manifest itself. Changing deep-set beliefs takes time. But it can happen; just consider the cultural acceptance of smoking or drink-driving and how these have completely changed in less than a generation.

“It’s about status and identity – what drives human behaviour? What if your identity was connected to your social responsibility. What if it was unacceptable to be paid ludicrous amounts or destroy the planet or not pay people fairly?”

Ultimately, if we are to change to a more sustainable, socially just and environmentally responsible business model the impetus to change will come from many directions. Early evidence that purpose-led business is simply better for shareholders needs to become overwhelming. And for this to happen we need to be able to measure social good as easily as we measure profit. Business leaders need to have the courage to do the right thing and empower their people to work towards a clearly defined purpose. Ultimately it is social pressure that will make the biggest difference.

And perhaps it would be a good start if , as leaders, we all just chose to behave in a way that we know is to the long-term good of the people we serve and the planet we inhabit.

As an entrepreneur I simply don’t get why this is so hard.  You just do the right thing because it’s the right thing to do.’