Isn’t “Inspiring Bank” an oxymoron?

by John Furgurson on March 24, 2008

It’s funny, where people find inspiration; For Monet, it was the garden. For me it’s the bookstore. The ski slopes. And the Children’s Museum.

My bank is definitely not on the list.

The most exciting thing to ever happen at my bank was the emancipation of the counter pens…  They were released from their chains and replaced with crappy logo pens that were free to take home with just a minimal, $10,000 deposit into a 15-year Certificate of Deposit at the historically low rate of 0000.01 percent interest, less deposit verification fees and other institutional weasels.

Nope. The banking industry is the last place I’d look for business inspiration or marketing insight. That is, until I met Ray Davis, the CEO of Umpqua Bank. Mr. Davis was in Bend the other day, visiting his local “stores” and speaking at the entrepreneurs forum.

Turns out, he doesn’t get inspired by the banking industry either.

Twelve years ago Umpqua Bank was a small, community bank with about $150 million in deposits. Today it has 135 stores in three states and almost 8 billion in deposits. Umpqua ranks 34th on Fortune Magazine’s list of 100 best places to work in the country, and is #1 according to Oregon Business Magazine.

Bankers and banking consultants from all over the world visit the Umpqua headquarters in Portland to see what they’re doing and how they’re doing it. And what’s even more impressive is that other businesses, in completely different industries, are also looking to Umpqua for inspiration.

So what’s behind it? What’s turned this small town brand into one of the fastest growing banks in the nation?

“Umpqua started to take off once we realized what business we’re really in,” Davis said. “I don’t believe we’re in the banking industry. We’re in the retail services business.”

When Davis applied for the job at Umpqua he warned the Board of Directors that he was going to throw out all the old conventions of the banking industry and start something completely different. Because he believed they couldn’t compete against the big guys in any conventional way.

“Banking products are a commodity,” Davis said. “You can’t differentiate yourself that way. The big guys are just going to copy any good new product we come up with. But they can’t copy the way we deliver the service. They can’t copy our experience.”

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For that, he borrowed ideas from two great retailers… Nordstrom and Starbucks. Umpqua stores look more like the lobby of a stylish boutique hotel than they do a bank. You can settle into a comfortable leather chair and read all the leading business publications. Have a hot cup of their Umpqua blend coffee. Check your e-mail or surf the web. Listen to their own brand of music and maybe even make a deposit or open a new account. Who knows.

It’s a dramatic leap when you compare that experience to the cold, marble conventions of the banking industry.

Clearly, Davis knows how to execute. He doesn’t talk about “execution” per se, but he obviously has the discipline to match the vision. He’s knows how to motivate and how to manage an organization through dramatic changes.

“As a CEO, you absolutely HAVE TO BE an optimist. There’s no other choice. Because no one will follow a pessimist. But you also have to be unreasonable to some extent and relentless to stay the course once it’s set.”

Here are some of the things Davis has successfully implemented and some reasons why his bank is now on my inspiration radar…

• Random acts of kindness:  Local Umpqua teams just do good stuff, like buying coffee for everyone who walks into a neighboring Starbucks. They don’t have to ask permission.

• They get their customer service training from Ritz Carlton.

• Every Umpqua employee gets a full week of paid leave to devote to a local charity. That’s 40 hours x 1800 employees! Any other banker would do the math and say it’s too costly. Davis says it pays off 100 fold.

• They’ve opened a innovation center in Portland’s trendy South Waterfront District.

• They have their own blend of coffee.

• Proceeds from Davis’ book go to charity. Buy it at www.amazon.com “Leading for Growth. How Umpqua Bank Got Cool And Created A Culture of Greatness.”

• They invented a way to measure customer satisfaction. As Fast Company Magazine put it: Umpqua Bank has a rigorous service culture where every branch and each employee gets measured on how well they deliver on what they call “return on quality.” Our research division, BNResearch, handles that kind of work for another innovative, billion-dollar company in an even less glamourous industry… veterinary medicine.

• They embrace design as a strategic advantage. Everything looks good at Umpqua. It’s a visually pleasing experience, which appeals to the creative side of me.

• Davis GETS IT! He knows, intuitively, that his brand is connected to their corporate culture. “Banking executives always ask, ‘How do you get your people to do that?’ It’s the culture we’ve built over the last 10 years. It doesn’t just happen. You don’t wake up one day and say, gee, look at this great culture we’ve got here. Our culture our single biggest asset, hands down.”

• He’s a great communicator. Davis uses stories, analogies and real world examples to motivate and persuade. Not banking statistics.

• He embraces the idea of a big hairy audacious goal. Everyone answers the phone “Thank you for calling Umpqua Bank, the world’s greatest bank.”

So the next time I’m looking for inspiration, maybe I’ll skip my usual haunts and head down to the bank.

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