When 'good' isn't good enough.

• Author: Motley, L. Biff
• Position: Customer Satisfaction - What you can do better than anyone else is path to greatness - Brief Article

Just because you've been doing something for years and have become pretty good at it, doesn't mean you should continue doing it--or that you are in the right business. Jim Collins, in his current business book, "Good to Great," compares today's mediocre companies with a small group of companies that migrated from "just being good" to becoming great. He defines "great" as exceeding the "overall shareholder return" (stock price increases plus dividends) benchmark by a factor of four times the market average over a 15-year period. Firms like Wells Fargo, Walgreens, Philip Morris, Gillette, Kroger, all in extremely competitive businesses, made the grade, while A&P, Eckerd, B of A, and Warner-Lambert didn't.

Companies that became great knew this secret: By focusing on what you are good at will only make you good. But focusing on what you can do better than anybody else is the path to greatness.

We bankers are all trying to chart our paths to greatness. The question is how? Lets look at some alternatives.

Products. How about some new type of checking account? Better loans? Unique money-management concepts? Is there a possibility for your bank to develop the software and operational protocols that make your accounts truly great--far better than your competitors? A generation ago, Merrill Lynch invented the totally integrated "cash management account," which distinguished the company for a few years. Now these accounts are pretty ubiquitous.

Pricing. Is it possible to offer the lowest loan rates in existence? And the highest deposit rates? And free checking? And free Internet banking? This is what your frontline sales people would like, because this is what customers want. This is further confirmation that we are in a commodity business and that all banks offer pretty much the same products. The key question: Can you sustain a long-term strategy of offering better prices? Is your cost structure so much better that you are willing to hang your hat here? The Internet-only banks gave this a shot and it didn't seem to work very well.

Alternative delivery technologies. How about offering more and better ATMs? Or a more "robust" (don't you love this word) website? Or account aggregation? Or wireless Internet access? The history of advances in these...