Reprinted from the Puget Sound Business Journal, January 31, 2014
I have found that people in Europe are far more curious and know much more about Seattle than the average Seattleite knows about comparably sized cities across the pond, such as Leeds, Frankfurt or Marseille.
What resonates the most with people is Seattle’s reputation for innovation and customer focus — attributes that have led to the growth of globally revered brands such as Amazon, Starbucks, Costco and Microsoft.
My career has been in banking and financial services, and I would love for companies from that industry to also be at the forefront of Seattle’s global reputation. The loss of Washington Mutual was indeed a large negative impact. However, there is no doubt that throughout the country, traditional banking models are on the downswing as seismic shifts in communication, technology and society are changing how consumers conduct their financial lives.
As a result, future financial industry growth will likely not come from a traditional player emerging to become a national brand. Rather, it is more likely going to come from a nontraditional financial services company that will draw from our region’s traditional strengths of technology, wireless and retail customer experience.
We have a growing ecosystem of financial technology companies that is alive and healthy — companies such as Remitly, Finsphere, Blucora and Piper, to name a few. Combined with that startup ecosystem is a spirit of continual innovation by large, consumer-centric companies that has led to offerings such as Amazon Payments and Starbucks’ e-wallet.
Finally, we have a legacy of customer service that spills into our locally grown financial institutions such as Umpqua, Sterling, Columbia, Washington Federal and BECU, the fourth-largest credit union in the country. The combination of those three ingredients could create something special.
Given that potential, what do we as business leaders need to do in order to foster growth in the local financial services industry?
One important step is to foster a culture of collaboration and make every effort to avoid parochialism. I call this “leading on the diagonal.” Companies traditionally have organized vertically. This management style worked well enough when the pace of technological change was less demanding. Eighty percent of managers focus vertically. Good managers, particularly those who team well, manage on the horizontal and work with their peer groups.
However, given the current pace of change, both vertical and horizontal integration are too inflexible.
Strategic change and breakthrough innovation often occur more by accident, through informal networks, than by design. Leading on the diagonal means trying to harness those informal networks by constructing cross-functional teams of subject-matter experts to solve specific issues made up from people from all levels within and outside the organization, with clear control points that keep them tied in with your vertical organization.
The attributes for success are engagement from all members, information transparency, empowerment and consistent communication.
Although my initial example of this was internally focused, it is important to think about leading on the diagonal in an external context as well. Our existing financial institutions, industry groups and Seattle-based companies should think diagonally and collaborate with small, innovative companies.
This is harder than it sounds, because it involves giving up control and partnering with third parties. However, it is encouraging to see new groups forming, such as the FinTech Meetup at SURF, and others will follow.
For financial services in Seattle to emerge tomorrow, we need to create stronger collaborative partnerships today.
Deanna Oppenheimer is CEO of boutique advisory firm CameoWorks LLC; non-executive director for AXA Group, Tesco PLC and NCR Corp.; former vice-chair of global retail banking for Barclays PLC; and former president of retail banking for Washington Mutual Inc.