The following information is used for educational purposes only.
¿Cuáles son las 10 mejores universidades de América Latina?
Cinco casas de estudio brasileñas aparecen en la selecta lista de este año; ¿entró la Argentina en el ranking?
La Universidad de São Paulo (USP) volvió este año al primer puesto de la lista QS de mejores universidades de América Latina. Foto: BBC
El ránking de las 10 mejores universidades de América Latina se escribe en verde-amarelo: Brasil lideró este año la calificación regional de la consultora QS y ratificó una supremacía que parecía en duda.
La Universidad de São Paulo (USP) volvió al primer lugar de la lista, una posición que había perdido el año pasado de acuerdo a Quacquarelli Symonds, que publica este ranking desde 2011.
La también brasileña Universidad Estatal de Campinas (Unicamp) pasó a la segunda posición y relegó al tercer lugar a la Pontificia Universidad Católica de Chile (UC), que encabezó la lista el año pasado.
En total hay cinco universidades de Brasil entre las primeras 10 latinoamericanas, un selecto grupo en el que también aparecen instituciones de México y Colombia.
"Brasil ha afirmado la presencia más fuerte en el ranking desde sus comienzos, y la edición 2015 no es una excepción", señaló QS al divulgar los resultados en su sitio web este miércoles.
La consultora global con sede central en Londres indicó que de las 17 universidades brasileñas ubicadas entre las 50 mejores de la región, ocho fortalecieron sus posiciones en 2015.
ESTUDIOS Y CRISIS
Este reconocimiento para la educación terciaria de Brasil ocurre en medio de un estancamiento de la economía de país y dificultades financieras en sus principales universidades.
La propia USP se sumergió el año pasado en una crisis histórica, con un déficit que comprometió su gestión y ajustes de gastos que desataron una huelga de funcionarios de más de 100 días.
De hecho, esta universidad estrella en América Latina está lejos de las posiciones de liderazgo global: calificó en el puesto 132 en la lista QS de las mejores del mundo divulgada en septiembre.
Pero su rector de la USP, Marco Antonio Zago, sostuvo que el primer lugar obtenido en el ranking latinoamericano de este año confirma una "tendencia general al progreso" pese a las oscilaciones anuales.
"Somos una gran universidad de masa, con más de 90 mil alumnos, mientras la mayoría de las universidades que lideran los rankings son mucho menores", sostuvo Zago en un comunicado.
La Universidad Federal de Río de Janeiro (UFRJ), quinta en la lista regional de QS, sufrió el mes pasado cierres temporales de su Facultad de Derecho por la falta de pagos a funcionarios de limpieza y seguridad, ante el ajuste fiscal del gobierno brasileño.
La Universidad Estatal Paulista (UNESP) quedó octava y la Universidad de Brasilia dio una de las sorpresas en el ranking, escalando siete posiciones respecto al año pasado y pasando al puesto 10.
OTROS PAÍSES
La consultora, que realiza sus rankings en base a indicadores como la tasa docentes/estudiantes y la capacidad de investigación de cada universidad, ubicó a Chile como segundo país latinoamericano más destacado.
Ocho universidades chilenas aparecen en la lista QS de las mejores 50 de la región, y dos están entre las cinco mejores: detrás de la UC quedó cuarta la Universidad de Chile, avanzando dos posiciones respecto al año pasado.
De las 17 universidades brasileñas ubicadas entre las 50 mejores de la región, ocho fortalecieron sus posiciones en 2015. Foto: BBC
Por otro lado, la Universidad Nacional Autónoma de México (UNAM) pasó del octavo al sexto puesto y el Tecnológico de Monterrey (ITESM) cayó de la séptima a la novena ubicación.
El "top 10" latinoamericano lo completó la Universidad de Los Andes Colombia, que quedó séptima tras descender dos escalones respecto a su calificación del año pasado.
En la lista QS de las 50 mejores universidades de América Latina hay en total siete mexicanas y cinco colombianas.
Aunque de acuerdo a la consultora ninguna universidad de Argentina está entre las primeras 10 de la región, sí hay ocho entre las mejores 50.
La Universidad de Buenos Aires (UBA) subió cuatro puestos en un año y quedó en el 15º, siendo la argentina mejor calificada en el ranking.
Fuente: www.lanacion.com.ar
In this blog, teachers, students and all those who have some kind of interest in the English language will find useful, interesting, curious and funny things to be used in their classes or for their personal enjoyment.
Friday, June 19, 2015
BUS/GralInt-Negocios para invertir en Estados Unidos
The following information is used for educational purposes only.
Negocios para invertir en Estados Unidos
Para quienes buscan invertir en la primera economía del mundo existen oportunidades de negocios para integrar pooles y también bajo el formato "llave en mano". Estos últimos califican para obtener una Visa de Inversionista y vivir legalmente en suelo americano
Producto del gran movimiento de una economía gigante como la de Estados Unidos se desprende un negocio que creció fuertemente en los últimos años: el transporte logístico terrestre.
El creciente aumento de buques de transporte que arriban a los principales puertos de carga de Estados Unidos como Miami, Nueva York, Los Ángeles y San Franciso demandan unos 43 millones de viajes terrestres anuales producto de las importaciones y exportaciones, convirtiendo al transporte terrestre en un eslabón indispensable para realizar los enlaces desde y hacia los puertos.
El 70% de las cargas que abastecen el mercado interno se transporta en camión, abarcando a todos los rubros de la industria, generando un promedio de 170.000 viajes diarios a lo largo de los 48 estados americanos, transformando esta actividad en un negocio con excelentes márgenes de rentabilidad.
Hay dos variantes para sumarse a este negocio: intergrar un pool o tener una flota propia. Además, en este último caso, se puede calificar para una Visa de Inversionista del tipo E-2.
POOL DE INVERSIÓN
Se ingresa con una base de USD 25.000, 50.000 ó 75.000 para formar parte de una empresa logística en marcha, donde se reciben acciones según el monto de participación.
El negocio propone una rentabilidad del 15% anual durante un ciclo de 4 años. Al finalizar este ciclo se reintegra el capital inicial, es decir, se obtiene el mismo dinero que se invirtió más un 60% de rentabilidad acumulada, la misma se va liquidando de forma semestral desde el momento en que se invirtió. Al ser un negocio en marcha las ganancias son inmediatas.
De esta manera es posible formar parte de un negocio de gran escala con una mínima participación, con dividendos en el corto plazo y a una tasa muy conveniente.
FLOTA PROPIA
Una posibilidad que no muchos conocen a la hora de invertir en Estados Unidos es la de tener un negocio propio bajo el concepto "llave en mano", es decir totalmente operativo. Sobre este mismo negocio logístico se puede acceder a tener una flota propia con montos que van desde los USD 100.000 y en donde la tasa ronda el 25% anual.
El inversor accede a tener su propia empresa de transporte bajo el formato LLC (Limited Liability Company), un esquema similar a nuestras SRL (Sociedad de Responsabilidad Limitada), sin tener que ocuparse de su gestión y completamente operativa. Es decir, se invierte, se adquieren las unidades (camiones y tráilers), y la operadora se ocupa de que esos camiones esten con trabajo permanente, transformandola automáticamente en proveedor de la empresa logística madre. Una excelente opción para tener el negocio propio en Estados Unidos.
VISA DE INVERSIONISTA
Para montos más altos, en el orden de los USD 360.000, además de tener una empresa de logística propia y, a través de ella, puede calificar para una Visa de Inversionista.
Argentina, junto con Bolivia, Chile, Colombia, Ecuador y México son los únicos países de Latinoamérica que poseen en la actualidad un tratado con Estados Unidos que habilita un tipo de visa denominada E-2, que permite invertir en un negocio y vivir junto con su familia en suelo americano.
Estas visas están cobrando gran auge, sobre todo en países con perspectivas poco favorables, porque permiten mudarse al primer mundo y desarrollarse económicamente con un negocio propio. Y si hablamos de que puede hacerse extensiva a los familiares directos del inversor (cónyuge e hijos menores de 21 años), estamos hablando de un cambio de vida realmente.
Se están presentando casos de jóvenes recién recibidos que buscan poder ampliar su capacitación y quieren residir en los Estados Unidos. También familias que deciden dar un golpe de timón de cara a un futuro más promisorio.
El espíritu de esta clase de visas es que ingrese dinero a la economía americana al tiempo de que se genere empleo y resulte un negocio sustentable. Mientras el negocio siga en marcha la visa puede renovarse indefinidamente cada 5 años.
Las oportunidades están a la vista y quienes realmente consideren estas opciones de inversión en Estados Unidos pueden asesorarse a través de SOUTHERN CAPITALS. La empresa cuenta con abogados y contadores especialistas en inmigraciones para abordar con éxito el proceso de inversión. Para mayor información y asesoramiento personalizado solicitar entrevista a través del sitio web: www.southerncapitals.com.
Fuente: www.lanacion.com.ar
Negocios para invertir en Estados Unidos
Para quienes buscan invertir en la primera economía del mundo existen oportunidades de negocios para integrar pooles y también bajo el formato "llave en mano". Estos últimos califican para obtener una Visa de Inversionista y vivir legalmente en suelo americano
Producto del gran movimiento de una economía gigante como la de Estados Unidos se desprende un negocio que creció fuertemente en los últimos años: el transporte logístico terrestre.
El creciente aumento de buques de transporte que arriban a los principales puertos de carga de Estados Unidos como Miami, Nueva York, Los Ángeles y San Franciso demandan unos 43 millones de viajes terrestres anuales producto de las importaciones y exportaciones, convirtiendo al transporte terrestre en un eslabón indispensable para realizar los enlaces desde y hacia los puertos.
El 70% de las cargas que abastecen el mercado interno se transporta en camión, abarcando a todos los rubros de la industria, generando un promedio de 170.000 viajes diarios a lo largo de los 48 estados americanos, transformando esta actividad en un negocio con excelentes márgenes de rentabilidad.
Hay dos variantes para sumarse a este negocio: intergrar un pool o tener una flota propia. Además, en este último caso, se puede calificar para una Visa de Inversionista del tipo E-2.
POOL DE INVERSIÓN
Se ingresa con una base de USD 25.000, 50.000 ó 75.000 para formar parte de una empresa logística en marcha, donde se reciben acciones según el monto de participación.
El negocio propone una rentabilidad del 15% anual durante un ciclo de 4 años. Al finalizar este ciclo se reintegra el capital inicial, es decir, se obtiene el mismo dinero que se invirtió más un 60% de rentabilidad acumulada, la misma se va liquidando de forma semestral desde el momento en que se invirtió. Al ser un negocio en marcha las ganancias son inmediatas.
De esta manera es posible formar parte de un negocio de gran escala con una mínima participación, con dividendos en el corto plazo y a una tasa muy conveniente.
FLOTA PROPIA
Una posibilidad que no muchos conocen a la hora de invertir en Estados Unidos es la de tener un negocio propio bajo el concepto "llave en mano", es decir totalmente operativo. Sobre este mismo negocio logístico se puede acceder a tener una flota propia con montos que van desde los USD 100.000 y en donde la tasa ronda el 25% anual.
El inversor accede a tener su propia empresa de transporte bajo el formato LLC (Limited Liability Company), un esquema similar a nuestras SRL (Sociedad de Responsabilidad Limitada), sin tener que ocuparse de su gestión y completamente operativa. Es decir, se invierte, se adquieren las unidades (camiones y tráilers), y la operadora se ocupa de que esos camiones esten con trabajo permanente, transformandola automáticamente en proveedor de la empresa logística madre. Una excelente opción para tener el negocio propio en Estados Unidos.
VISA DE INVERSIONISTA
Para montos más altos, en el orden de los USD 360.000, además de tener una empresa de logística propia y, a través de ella, puede calificar para una Visa de Inversionista.
Argentina, junto con Bolivia, Chile, Colombia, Ecuador y México son los únicos países de Latinoamérica que poseen en la actualidad un tratado con Estados Unidos que habilita un tipo de visa denominada E-2, que permite invertir en un negocio y vivir junto con su familia en suelo americano.
Estas visas están cobrando gran auge, sobre todo en países con perspectivas poco favorables, porque permiten mudarse al primer mundo y desarrollarse económicamente con un negocio propio. Y si hablamos de que puede hacerse extensiva a los familiares directos del inversor (cónyuge e hijos menores de 21 años), estamos hablando de un cambio de vida realmente.
Se están presentando casos de jóvenes recién recibidos que buscan poder ampliar su capacitación y quieren residir en los Estados Unidos. También familias que deciden dar un golpe de timón de cara a un futuro más promisorio.
El espíritu de esta clase de visas es que ingrese dinero a la economía americana al tiempo de que se genere empleo y resulte un negocio sustentable. Mientras el negocio siga en marcha la visa puede renovarse indefinidamente cada 5 años.
Las oportunidades están a la vista y quienes realmente consideren estas opciones de inversión en Estados Unidos pueden asesorarse a través de SOUTHERN CAPITALS. La empresa cuenta con abogados y contadores especialistas en inmigraciones para abordar con éxito el proceso de inversión. Para mayor información y asesoramiento personalizado solicitar entrevista a través del sitio web: www.southerncapitals.com.
Fuente: www.lanacion.com.ar
BUS/GralInt-How to get the most from big data
The following information is used for educational purposes only.
Article
How to get the most from big data
Organizations need specialists, or “translators,” who can analyze, distill, and clearly communicate information of the greatest potential value.
December 2014 | byMatt Ariker, Peter Breuer, and Tim McGuire
Simply collecting big data does not unleash its potential value. People must do that, especially people who understand how analytics can resolve business issues or capture opportunities. Yet, as most executives know, good data people are hard to come by. According to a McKinsey survey, only 18 percent of companies believe they have the skills necessary to gather and use insights effectively.1 At the same time, only 19 percent of companies are confident that their insights-gathering processes contribute directly to sales effectiveness. And what if number crunchers aren’t enough? After all, if a great insight derived from advanced analytics is too complicated to understand, business managers just won’t use it.
That’s why companies need to recruit and cultivate “translators”—specialists capable of bridging different functions within the organization and effectively communicating between them (exhibit). But looking for a single translator at the right intersection of all the various skills you need is like looking for a unicorn. It’s more realistic to find translators who possess two complementary sets of skills, such as computer programming and finance, statistics and marketing, or psychology and economics. In all but the rarest of cases, you’ll need at least two translators to bridge each pair of functions—one of whom is grounded in his or her own function but has a good enough understanding of the other function to be able to communicate with a counterpart grounded there. That’s because when this process works best, it’s a collaboration rather than a straight “translation.”
(Exhibit):Organizations should focus on finding ‘translators,’ people who can bridge different functional areas.
Consider, for example, business and analytics. Business managers generally have an incomplete understanding of the data available, no matter how well versed they are in data or how well developed their analytics requirements are. In this case, analytics managers with a fuller appreciation of the data, who also understand the business and have a clear vision of the objectives, can proactively offer solutions and options.
When considering what translators you need, it’s important to understand that business impact based on analytical insights requires bringing together the right group of people with complementary skills, and then creating the necessary connections between them. In effect, translators form the links that bind the chain of an effective advanced-analytics capability. On the business end, that requires people who can define a strategy and run the economic and financial analysis to determine the value of the opportunities to pursue. Translators turn those analyses into requirements that guide IT’s development of an analytics environment to perform, validate, and ultimately scale analytics. When the data are rendered into insights, business managers need to then translate them into messages and offers to be delivered to the marketplace.
The ability to work together quickly and flexibly is critical. The best processes are highly iterative, requiring business, IT, and analytics teams to rapidly review real-world results, recalibrate analyses, adjust assumptions, and then test outcomes.
While companies don’t often think about talent in terms of value chains, the skill and capability links between people are crucial for unlocking the full value of advanced analytics.
About the authors
Matt Ariker is the chief operating officer of McKinsey’s Consumer Marketing Analytics Center and is based in the San Francisco office, Peter Breuer is a director in the Cologne office, and Tim McGuire is a director in the Toronto office.
Source: www.mckinsey.com
Article
How to get the most from big data
Organizations need specialists, or “translators,” who can analyze, distill, and clearly communicate information of the greatest potential value.
December 2014 | byMatt Ariker, Peter Breuer, and Tim McGuire
Simply collecting big data does not unleash its potential value. People must do that, especially people who understand how analytics can resolve business issues or capture opportunities. Yet, as most executives know, good data people are hard to come by. According to a McKinsey survey, only 18 percent of companies believe they have the skills necessary to gather and use insights effectively.1 At the same time, only 19 percent of companies are confident that their insights-gathering processes contribute directly to sales effectiveness. And what if number crunchers aren’t enough? After all, if a great insight derived from advanced analytics is too complicated to understand, business managers just won’t use it.
That’s why companies need to recruit and cultivate “translators”—specialists capable of bridging different functions within the organization and effectively communicating between them (exhibit). But looking for a single translator at the right intersection of all the various skills you need is like looking for a unicorn. It’s more realistic to find translators who possess two complementary sets of skills, such as computer programming and finance, statistics and marketing, or psychology and economics. In all but the rarest of cases, you’ll need at least two translators to bridge each pair of functions—one of whom is grounded in his or her own function but has a good enough understanding of the other function to be able to communicate with a counterpart grounded there. That’s because when this process works best, it’s a collaboration rather than a straight “translation.”
(Exhibit):Organizations should focus on finding ‘translators,’ people who can bridge different functional areas.
Consider, for example, business and analytics. Business managers generally have an incomplete understanding of the data available, no matter how well versed they are in data or how well developed their analytics requirements are. In this case, analytics managers with a fuller appreciation of the data, who also understand the business and have a clear vision of the objectives, can proactively offer solutions and options.
When considering what translators you need, it’s important to understand that business impact based on analytical insights requires bringing together the right group of people with complementary skills, and then creating the necessary connections between them. In effect, translators form the links that bind the chain of an effective advanced-analytics capability. On the business end, that requires people who can define a strategy and run the economic and financial analysis to determine the value of the opportunities to pursue. Translators turn those analyses into requirements that guide IT’s development of an analytics environment to perform, validate, and ultimately scale analytics. When the data are rendered into insights, business managers need to then translate them into messages and offers to be delivered to the marketplace.
The ability to work together quickly and flexibly is critical. The best processes are highly iterative, requiring business, IT, and analytics teams to rapidly review real-world results, recalibrate analyses, adjust assumptions, and then test outcomes.
While companies don’t often think about talent in terms of value chains, the skill and capability links between people are crucial for unlocking the full value of advanced analytics.
About the authors
Matt Ariker is the chief operating officer of McKinsey’s Consumer Marketing Analytics Center and is based in the San Francisco office, Peter Breuer is a director in the Cologne office, and Tim McGuire is a director in the Toronto office.
Source: www.mckinsey.com
BUS/INTERNET/GralInt-McKinsey Interview:How Google breaks through
The following information is used for educational purposes only.
How Google breaks through
Lorraine Twohill, Google’s senior vice president of global marketing, describes what has and hasn’t changed for marketers trying to connect with customers.
February 2015
Lorraine Twohill has made a career of pushing frontiers and forging connections. A 1992 graduate of Dublin City University, she spent a decade building brands for organizations across Europe. In 2003, Google tapped Twohill for its growing EMEA business, and in the process made her their first non-US marketing hire. Twohill advanced steadily from there; in 2009, she was named global head of marketing and then, in 2014, senior vice president of global marketing.
Twohill recently sat down with McKinsey’s Jonathan Gordon to share her views on a new inflection point in marketing. What new technologies are arising, which best practices are emerging, and what fundamentals still hold true since marketing’s first golden age?
The Quarterly: Has marketing changed fundamentally since the first golden age?
Lorraine Twohill: The core assets that were so important in the first golden age are as important today: a great central thought, great writing, great creativity. Back in the ’60s, TV was coming onboard but all the work was in print. And the brilliance of print is that you have to have a really great thought and great writing. The bar isn’t any lower today. You have to have authenticity, a great central thought. Those same skills that were needed back then are as critical today.
The way I think about marketing—and the way I tend to talk to my team about it—is “knowing the user, knowing the magic, and connecting the two.” Knowing the user means understanding who your consumers are, who your customers are. Not just knowing who they are, but what they need, what are their deep insights, and understanding how we can help them. Knowing the magic means knowing what’s in the hearts and minds of your engineers and your product managers, and what they’re building. Connecting the two means bringing the magic built by engineers to the world in a way that is relevant, meaningful, and compelling to the everyday consumer. So we create something that the world will be excited about.
The Quarterly: What does the digital side allow you to do that you couldn’t do before?
Lorraine Twohill: The beauty of marketing today is that we can really show the return. The data allows us to demonstrate impact in a much more transparent way than in the past. It’s measurable, and we focus a lot on that. We’re very rigorous about the modeling we put in place and the tracking of our campaigns. Impact matters, results matter, tracking matters.
And I think right now we’re at a very interesting inflection point. The tools available to marketers today are extraordinary. They know far more about their consumers than ever before. They are able to have a much more meaningful, two-way conversation. It’s definitely the golden age for marketing in many ways.
We are excited about the automation of media planning and buying through the use of data and algorithms—what’s known as “programmatic.” I’ve challenged my team to hit a target of 60 percent for our display marketing via programmatic. You still have to define your audience but it is now much simpler to deliver the right message to the right person at the right time with precision. There are fewer wasted ad impressions. It’s also better for users because I’m not frustrating them with ads that aren’t relevant. And since it takes a lot of the grunt work out of media planning, it frees my team to focus on creativity.
The Quarterly: How so?
Lorraine Twohill: Google has a very data-led culture. But we care just as much about the storytelling and the brand, and how we tell the world about our mission. So I have found that getting the storytelling right—and having the substance and the authenticity in the storytelling—is as respected internally as the return and the impact. And with the use of the analytic tools we have, the storytelling becomes more important than ever. If anything, there’s too much talk about the science right now. I have a colleague who is writing a paper on the future of marketing: it’s data, data, science, science. I’m like, “It’s not!” Or rather, it is those things, yes. But if you fall down on the art, if you fail on the messaging and storytelling, all that those tools will get you are a lot of bad impressions.
The Quarterly: How do you approach the messaging and the storytelling, especially given the challenges of proliferation? How do you break through the clutter?
Lorraine Twohill: We start with the user, and we focus on what we call “one real user.” You have to think about the consumer as a human being. What matters in his or her life. And, honestly, you do not wake up in the morning and think, “I need a new browser today,” for example. You wake up in the morning and worry about getting your kids to school and paying your mortgage and saving for the future.
If we are going to interrupt you with something that we think is important to you, we have to find a way to tell you about it so that it resonates with you. There has to be a benefit to you. There has to be substance. So, we tell real-life stories. We say, “Listen, your life will change because our product will do this.” Or “Your life just got better because now you can have this.” We don’t do the storytelling unless we have that. Before we get into storytelling, we’ll sit with the team and say, “Okay, why does the world need this? What is going to change in a person’s life if they have this? What’s unique about this? What’s truly great about it?” There has to be substance there.
The Quarterly: That’s interesting; we’ve also identified “substance” as one of the leading elements of marketing’s new golden age—along with science, storytelling, speed, and simplicity.
Lorraine Twohill: Substance is really important. And I think that’s what gave marketing a lot of its bad name in the ’80s and ’90s. There was an awful lot of hype without substance. And a lot of exaggeration. You know: big hair, big everything.
Our engineers have a real sense of purpose and they care about building products and features that have substance and will make a meaningful difference in people’s lives; for example, look at the impact of search in giving people all over the world access to information. So that makes my job a lot easier and it gives my team something real to talk about. For example, Gmail launched the promotions and social tabs because we realized everybody’s inboxes were getting flooded with promotional emails and social-media emails. So we created two tabs where they all just immediately go: “Job done.” And people just loved that—a little feature for a mature product that people went nuts over because it was a real pain point. We call them “toothbrush problems.”
The Quarterly: Toothbrush problems?
Lorraine Twohill: Toothbrush problems—small problems, pain points—like you brush your teeth twice a day. But they are recurring problems, and we should just make them go away. And at the same time, we also look at big problems, like the deaths on the road from cars; whereas if you had driverless cars, that problem would go away. We look at what we can solve, from everyday toothbrush problems all the way up to epic problems.
The Quarterly: Would you say, as well, that achieving the best customer experience means not only getting better at telling stories to the customer, but also getting better at listening?
Lorraine Twohill: Certainly. I think that should be marketing’s role in the company—to really be the champion of the consumer, the face of the user internally, and the guardian of the user’s best interests and the user’s needs.
We can put products in front of people and get consumer insights back almost in real-time. We can test and iterate, test and learn. Even more traditional companies can now exist in the digital world, and be smart about how they use the Internet as a great focus group. You can more quickly get user insights, and reach more people. And we can very quickly get that feedback to the teams as they go through their evolutions of a product. Then we bake that feedback into the product as it gets better.
The Quarterly: And yet, there is still room for disagreement and creative judgment.
Lorraine Twohill: Storytelling is the ultimate example of creative judgment. And in my view, the one thing you cannot train marketers on is creative judgment. You can train on most other things. But the folks who have great creative judgment—and you really know it when you see it—are few and far between. You can have principles and guidebooks and frameworks and brand guidelines. You can have the whole kit and caboodle. But just innate gut instinct, brilliant, creative judgment—that’s what we look for, and that’s where you see results.
The Quarterly: How do you make sure your marketers stay in touch with prevailing trends?
Lorraine Twohill: Well, you have to look at the world around you. You have to leave the building. Not enough folks do that; too many become very internally focused. They’re in management team meetings; they’re working with cross-functional teams. But you have to go out and look at the world around you—see the people, how they use your products, go into homes, walk around the city. No matter where I go in the world, I don’t just go somewhere for meetings. For example, if I go to Tokyo, I won’t sit in the office for two days and fly back. I’ll take a half a day to walk that city. You don’t understand the idea of paying with a phone until you actually pay with a phone. You walk into any store in Tokyo, beep, and it’s done.
I’ll also take the most junior folks on the team and say, “Where do you hang out, where do you shop? Put me around your neighborhood. Take me to where you buy your groceries. Show me what you’re excited about.” They love this! And I learn so much from them—I come back bursting.
The Quarterly: It’s a smaller world.
Lorraine Twohill: And a faster one. You know, it’s not a two-year lead time for a Google product. It’s much quicker. Being able to bring insights to the table, consumer insights, in real time and get insights back in—being able to test and iterate, test and iterate—is extremely important. We also like to keep a healthy sense of urgency, the feeling of being on a small, multifaceted team up against the odds. Usually, that’s drawn from our own people: engineers, creative, and product managers. It’s very creative because engineers are creative at heart. And when you bring creatives together with engineers, you get phenomenal ideas and phenomenal thinking.
The Quarterly: What’s it like working with engineers?
Lorraine Twohill: It means marketing needs to raise its game. Engineers look at the world in a different way than the rest of us. They see things that are broken and want to fix them. They’re big visionaries, big thinkers, because they have huge imaginations. They think of crazy ideas and go build them. You have to be as good as that. You have a seat at the genius table with people that can code, people that are creative, and are extraordinarily talented. To have a seat there, you need to raise your game.
About the authors
Lorraine Twohill is Google’s senior vice president of global marketing. This interview was conducted by Jonathan Gordon, a principal in McKinsey’s New York office.
Source: www.mckinsey.com
How Google breaks through
Lorraine Twohill, Google’s senior vice president of global marketing, describes what has and hasn’t changed for marketers trying to connect with customers.
February 2015
Lorraine Twohill has made a career of pushing frontiers and forging connections. A 1992 graduate of Dublin City University, she spent a decade building brands for organizations across Europe. In 2003, Google tapped Twohill for its growing EMEA business, and in the process made her their first non-US marketing hire. Twohill advanced steadily from there; in 2009, she was named global head of marketing and then, in 2014, senior vice president of global marketing.
Twohill recently sat down with McKinsey’s Jonathan Gordon to share her views on a new inflection point in marketing. What new technologies are arising, which best practices are emerging, and what fundamentals still hold true since marketing’s first golden age?
The Quarterly: Has marketing changed fundamentally since the first golden age?
Lorraine Twohill: The core assets that were so important in the first golden age are as important today: a great central thought, great writing, great creativity. Back in the ’60s, TV was coming onboard but all the work was in print. And the brilliance of print is that you have to have a really great thought and great writing. The bar isn’t any lower today. You have to have authenticity, a great central thought. Those same skills that were needed back then are as critical today.
The way I think about marketing—and the way I tend to talk to my team about it—is “knowing the user, knowing the magic, and connecting the two.” Knowing the user means understanding who your consumers are, who your customers are. Not just knowing who they are, but what they need, what are their deep insights, and understanding how we can help them. Knowing the magic means knowing what’s in the hearts and minds of your engineers and your product managers, and what they’re building. Connecting the two means bringing the magic built by engineers to the world in a way that is relevant, meaningful, and compelling to the everyday consumer. So we create something that the world will be excited about.
The Quarterly: What does the digital side allow you to do that you couldn’t do before?
Lorraine Twohill: The beauty of marketing today is that we can really show the return. The data allows us to demonstrate impact in a much more transparent way than in the past. It’s measurable, and we focus a lot on that. We’re very rigorous about the modeling we put in place and the tracking of our campaigns. Impact matters, results matter, tracking matters.
And I think right now we’re at a very interesting inflection point. The tools available to marketers today are extraordinary. They know far more about their consumers than ever before. They are able to have a much more meaningful, two-way conversation. It’s definitely the golden age for marketing in many ways.
We are excited about the automation of media planning and buying through the use of data and algorithms—what’s known as “programmatic.” I’ve challenged my team to hit a target of 60 percent for our display marketing via programmatic. You still have to define your audience but it is now much simpler to deliver the right message to the right person at the right time with precision. There are fewer wasted ad impressions. It’s also better for users because I’m not frustrating them with ads that aren’t relevant. And since it takes a lot of the grunt work out of media planning, it frees my team to focus on creativity.
The Quarterly: How so?
Lorraine Twohill: Google has a very data-led culture. But we care just as much about the storytelling and the brand, and how we tell the world about our mission. So I have found that getting the storytelling right—and having the substance and the authenticity in the storytelling—is as respected internally as the return and the impact. And with the use of the analytic tools we have, the storytelling becomes more important than ever. If anything, there’s too much talk about the science right now. I have a colleague who is writing a paper on the future of marketing: it’s data, data, science, science. I’m like, “It’s not!” Or rather, it is those things, yes. But if you fall down on the art, if you fail on the messaging and storytelling, all that those tools will get you are a lot of bad impressions.
The Quarterly: How do you approach the messaging and the storytelling, especially given the challenges of proliferation? How do you break through the clutter?
Lorraine Twohill: We start with the user, and we focus on what we call “one real user.” You have to think about the consumer as a human being. What matters in his or her life. And, honestly, you do not wake up in the morning and think, “I need a new browser today,” for example. You wake up in the morning and worry about getting your kids to school and paying your mortgage and saving for the future.
If we are going to interrupt you with something that we think is important to you, we have to find a way to tell you about it so that it resonates with you. There has to be a benefit to you. There has to be substance. So, we tell real-life stories. We say, “Listen, your life will change because our product will do this.” Or “Your life just got better because now you can have this.” We don’t do the storytelling unless we have that. Before we get into storytelling, we’ll sit with the team and say, “Okay, why does the world need this? What is going to change in a person’s life if they have this? What’s unique about this? What’s truly great about it?” There has to be substance there.
The Quarterly: That’s interesting; we’ve also identified “substance” as one of the leading elements of marketing’s new golden age—along with science, storytelling, speed, and simplicity.
Lorraine Twohill: Substance is really important. And I think that’s what gave marketing a lot of its bad name in the ’80s and ’90s. There was an awful lot of hype without substance. And a lot of exaggeration. You know: big hair, big everything.
Our engineers have a real sense of purpose and they care about building products and features that have substance and will make a meaningful difference in people’s lives; for example, look at the impact of search in giving people all over the world access to information. So that makes my job a lot easier and it gives my team something real to talk about. For example, Gmail launched the promotions and social tabs because we realized everybody’s inboxes were getting flooded with promotional emails and social-media emails. So we created two tabs where they all just immediately go: “Job done.” And people just loved that—a little feature for a mature product that people went nuts over because it was a real pain point. We call them “toothbrush problems.”
The Quarterly: Toothbrush problems?
Lorraine Twohill: Toothbrush problems—small problems, pain points—like you brush your teeth twice a day. But they are recurring problems, and we should just make them go away. And at the same time, we also look at big problems, like the deaths on the road from cars; whereas if you had driverless cars, that problem would go away. We look at what we can solve, from everyday toothbrush problems all the way up to epic problems.
The Quarterly: Would you say, as well, that achieving the best customer experience means not only getting better at telling stories to the customer, but also getting better at listening?
Lorraine Twohill: Certainly. I think that should be marketing’s role in the company—to really be the champion of the consumer, the face of the user internally, and the guardian of the user’s best interests and the user’s needs.
We can put products in front of people and get consumer insights back almost in real-time. We can test and iterate, test and learn. Even more traditional companies can now exist in the digital world, and be smart about how they use the Internet as a great focus group. You can more quickly get user insights, and reach more people. And we can very quickly get that feedback to the teams as they go through their evolutions of a product. Then we bake that feedback into the product as it gets better.
The Quarterly: And yet, there is still room for disagreement and creative judgment.
Lorraine Twohill: Storytelling is the ultimate example of creative judgment. And in my view, the one thing you cannot train marketers on is creative judgment. You can train on most other things. But the folks who have great creative judgment—and you really know it when you see it—are few and far between. You can have principles and guidebooks and frameworks and brand guidelines. You can have the whole kit and caboodle. But just innate gut instinct, brilliant, creative judgment—that’s what we look for, and that’s where you see results.
The Quarterly: How do you make sure your marketers stay in touch with prevailing trends?
Lorraine Twohill: Well, you have to look at the world around you. You have to leave the building. Not enough folks do that; too many become very internally focused. They’re in management team meetings; they’re working with cross-functional teams. But you have to go out and look at the world around you—see the people, how they use your products, go into homes, walk around the city. No matter where I go in the world, I don’t just go somewhere for meetings. For example, if I go to Tokyo, I won’t sit in the office for two days and fly back. I’ll take a half a day to walk that city. You don’t understand the idea of paying with a phone until you actually pay with a phone. You walk into any store in Tokyo, beep, and it’s done.
I’ll also take the most junior folks on the team and say, “Where do you hang out, where do you shop? Put me around your neighborhood. Take me to where you buy your groceries. Show me what you’re excited about.” They love this! And I learn so much from them—I come back bursting.
The Quarterly: It’s a smaller world.
Lorraine Twohill: And a faster one. You know, it’s not a two-year lead time for a Google product. It’s much quicker. Being able to bring insights to the table, consumer insights, in real time and get insights back in—being able to test and iterate, test and iterate—is extremely important. We also like to keep a healthy sense of urgency, the feeling of being on a small, multifaceted team up against the odds. Usually, that’s drawn from our own people: engineers, creative, and product managers. It’s very creative because engineers are creative at heart. And when you bring creatives together with engineers, you get phenomenal ideas and phenomenal thinking.
The Quarterly: What’s it like working with engineers?
Lorraine Twohill: It means marketing needs to raise its game. Engineers look at the world in a different way than the rest of us. They see things that are broken and want to fix them. They’re big visionaries, big thinkers, because they have huge imaginations. They think of crazy ideas and go build them. You have to be as good as that. You have a seat at the genius table with people that can code, people that are creative, and are extraordinarily talented. To have a seat there, you need to raise your game.
About the authors
Lorraine Twohill is Google’s senior vice president of global marketing. This interview was conducted by Jonathan Gordon, a principal in McKinsey’s New York office.
Source: www.mckinsey.com
BUS/INFO/NEWS/GralInt-McKinsey Interview:Thomson Reuters on making information useful (unedited)
The following information is used for educational purposes only.
Interview
Thomson Reuters on making information useful
The CEO of the news, information, and professional-software company, Jim Smith, discusses how truly meeting customer expectations is at the heart of the company’s effort to continue growing and digitally adapting.
May 2015
It’s no secret that the world is awash in information. But how do you take the terabytes of data at your fingertips, extract what you need, and make the right decisions? In this interview, Jim Smith, president and chief executive officer of Thomson Reuters, explains to McKinsey’s Rik Kirkland how the company is seeking not only to remain competitive but also to grow by hiring and developing the right talent to meet its customers’ ever-rising expectations. An edited transcript of Smith’s comments follows.
Interview transcript Evolving growth opportunities Our opportunities have shifted a bit. We spent a lot of time trying to build out in markets where we thought we had the best chance to compete and the best chance to win. So we did a good bit of portfolio reshuffling over the last several years. We feel comfortable with where those markets are now, and we’re focused on how we exploit that growth. Writ large, the way we view our opportunities are those that lie right at the intersection of regulation and commerce. We see enormous opportunities there. When you take a look at the breadth and depth of content sets that we have, of offerings that we have, and the geographic reach that we have, I think it’s really unrivaled. The trick for us is how we knit those solutions together to serve our global customers. If you think about what we do uniquely, we connect the global economy. And we serve both established multinational players—who are looking to continue to grow their business around the globe—and new regional emerging players, who are looking to connect with the broader global economy. I think you see a lot more emphasis from us, just as you are for a lot of other companies, to responding to the needs of these new emerging players in the new regional hubs that are really stepping in and driving a lot of the global growth that used to be driven kind in one direction. Today, we cover more than 500 regulatory agencies around the world. And we update all the changes that they make, each and every single day. But we also have built workflow tools that tie not only to an announcement of, “This particular regulator has changed this rule,” but will tell you how that affects specific policies inside your business, what you need to do in order to change those practices, and what you need to do to be sure that you comply. Innovation as a constant “Innovation” is one of those incredibly overused words, and it often becomes kind of a theme-of-the-day. We obviously have to talk about it inside the organization. In order for us to be successful, though, innovation can’t be a project. It can’t be a program. It can’t be this year’s thematic exercise, and all of the retreats revolve around it and the posters look nice. Innovation’s about really being focused on customers and about constantly driving toward organic growth. So what we’re trying to look at this year is a far more granular approach to growth and to thinking about what types of innovation will be required in order to get us in a position where we can be driving growth—year in and year out—just by the way we go through our paces of doing business day to day. It’s not enough to say, “This is our growth initiative,” or, “This is our innovation initiative.” You really have to get growth wired into the fabric of the way you talk about customers and the way you talk about the challenges inside the organization. Some of it is through process. It can be a process that helps you take costs out in a new and clever way. It can be a new way of doing customer service that unlocks a whole new level of relationships. Or it can be everyone thinks about products, and it can be new products. One way technology is really impacting our business and our customers is that, increasingly, our professional customers are bringing their consumer expectations into the workplace. The experiences that they have—whether they be from gaming or whether they be from iOS or Android devices in their personal life—they’re looking for immediate answers. And they’re looking for a very slick, touch-and-feel user interface. That challenges an organization like ours that’s grown through the green-screen days and is very focused on getting the information exactly right—the way some consumer folks have learned—and not so much on the end-user experience. So that’s a bit of a challenge for us. And we’re out hiring some talent to bring that kind of DNA into our company. It’s more design thinking. It’s more about the context. For us, it’s about making information immediately useful. That’s really important. And when I think about the future, I have whole categories of places where I’m confident we have the best information. I don’t worry about being obviated by someone who’s going to come out and do the information a bit better. I worry about people who can take good-enough information and make it more useful, because they’re delivering it in more relevant ways. I think that we’ve done a very good job—amongst the old-information publishers—of adopting technology early. But what we did is we took the library onto the desktop. And people went to the desktop and they did research. The current phase we’re going through is taking that desktop and putting it in the hands of the professional. So it’s not about providing the best information utility. It’s about providing the right kind of tool—for a practicing lawyer, for a trader who’s not at his or her desk. Everybody needs to be thinking about that. Everybody needs to be thinking about how they can better serve their customers. Not just, “How can I sell a little bit more of a product that’s been really good for me for the past 10, 20, 30 years?” Cultivating leaders Where are the future leaders coming from? What’s that pipeline look like? What’s the current bench? What’s my team look like today? And are we up to the challenge? Not only is it are we individually up to the challenge; are we functioning as a team? Are we being open and honest with each other and constructive? We’ve done a lot of work around shared purpose, around values, and about the behaviors that we have to exhibit if we’re going to live those values. And I know that sounds like soft stuff. But I think it’s absolutely critical, particularly in this day and age when you need to move quickly. It isn’t about, you know, precisely describing the geographic boundaries of command and control. It’s about creating a team that’s capable of morphing and changing as opportunities arise, and redirecting throughout the year as opportunities arise. I worry about that a lot. And we spend more time on purpose, values, and culture with the top now 2,000 people in the organization than we ever have in the past. I spend a lot more time working on that long-term-succession-planning chart that we have. And it’s not succession because we need to make certain we can fill slots as they open, it’s “Where’s that pipeline of future leaders? Where are they coming from? What kind of experiences are they having? Where am I seeing people develop faster? And what are those common kinds of characteristics? Where can we expose some bright, young, talented leaders to the kind of experience that’s galvanizing top leaders today?” If I look across our company over the past three to five years, I’ve seen a lot of growth from a lot of people who’ve been in emerging markets. And as we have put more emphasis there and put more talent there, it’s a sink-or-swim situation when you’re far away from head office and no one’s there to help. We’re seeing a lot of great development in those kinds of roles. We’ve got rotational assignments. We’ve got cross-functional teams. I think we try everything that we can think of to provide both developmental opportunities for up-and-coming young managers, but also to get the right kind of skill sets on projects. That’s because many of our most exciting projects are in what today are small markets. And you say, “Hmm. Would I like to put a lot of resources behind that opportunity?” Yes. “Would I like to put a lot of resources behind that opportunity with a relatively inexperienced management team on the ground?” Eh, not really. So we do a little bit more of going and getting some of the experienced managers from other places and helping them go in and support some of those opportunities on the ground. And hopefully, that cross-pollination works for everybody. I spend far more time on talent even than I did when I started in the job. And I suspect far more time on talent, physically on talent, than any of my predecessors did. I think the times have changed. And the breadth of experiences that you’re looking for has changed. About the authors Jim Smith is the president and chief executive officer of Thomson Reuters. Rik Kirkland is the senior managing editor of McKinsey Publishing, based in McKinsey’s New York office. Source: www.mckinsey.com
Interview
Thomson Reuters on making information useful
The CEO of the news, information, and professional-software company, Jim Smith, discusses how truly meeting customer expectations is at the heart of the company’s effort to continue growing and digitally adapting.
May 2015
It’s no secret that the world is awash in information. But how do you take the terabytes of data at your fingertips, extract what you need, and make the right decisions? In this interview, Jim Smith, president and chief executive officer of Thomson Reuters, explains to McKinsey’s Rik Kirkland how the company is seeking not only to remain competitive but also to grow by hiring and developing the right talent to meet its customers’ ever-rising expectations. An edited transcript of Smith’s comments follows.
Interview transcript Evolving growth opportunities Our opportunities have shifted a bit. We spent a lot of time trying to build out in markets where we thought we had the best chance to compete and the best chance to win. So we did a good bit of portfolio reshuffling over the last several years. We feel comfortable with where those markets are now, and we’re focused on how we exploit that growth. Writ large, the way we view our opportunities are those that lie right at the intersection of regulation and commerce. We see enormous opportunities there. When you take a look at the breadth and depth of content sets that we have, of offerings that we have, and the geographic reach that we have, I think it’s really unrivaled. The trick for us is how we knit those solutions together to serve our global customers. If you think about what we do uniquely, we connect the global economy. And we serve both established multinational players—who are looking to continue to grow their business around the globe—and new regional emerging players, who are looking to connect with the broader global economy. I think you see a lot more emphasis from us, just as you are for a lot of other companies, to responding to the needs of these new emerging players in the new regional hubs that are really stepping in and driving a lot of the global growth that used to be driven kind in one direction. Today, we cover more than 500 regulatory agencies around the world. And we update all the changes that they make, each and every single day. But we also have built workflow tools that tie not only to an announcement of, “This particular regulator has changed this rule,” but will tell you how that affects specific policies inside your business, what you need to do in order to change those practices, and what you need to do to be sure that you comply. Innovation as a constant “Innovation” is one of those incredibly overused words, and it often becomes kind of a theme-of-the-day. We obviously have to talk about it inside the organization. In order for us to be successful, though, innovation can’t be a project. It can’t be a program. It can’t be this year’s thematic exercise, and all of the retreats revolve around it and the posters look nice. Innovation’s about really being focused on customers and about constantly driving toward organic growth. So what we’re trying to look at this year is a far more granular approach to growth and to thinking about what types of innovation will be required in order to get us in a position where we can be driving growth—year in and year out—just by the way we go through our paces of doing business day to day. It’s not enough to say, “This is our growth initiative,” or, “This is our innovation initiative.” You really have to get growth wired into the fabric of the way you talk about customers and the way you talk about the challenges inside the organization. Some of it is through process. It can be a process that helps you take costs out in a new and clever way. It can be a new way of doing customer service that unlocks a whole new level of relationships. Or it can be everyone thinks about products, and it can be new products. One way technology is really impacting our business and our customers is that, increasingly, our professional customers are bringing their consumer expectations into the workplace. The experiences that they have—whether they be from gaming or whether they be from iOS or Android devices in their personal life—they’re looking for immediate answers. And they’re looking for a very slick, touch-and-feel user interface. That challenges an organization like ours that’s grown through the green-screen days and is very focused on getting the information exactly right—the way some consumer folks have learned—and not so much on the end-user experience. So that’s a bit of a challenge for us. And we’re out hiring some talent to bring that kind of DNA into our company. It’s more design thinking. It’s more about the context. For us, it’s about making information immediately useful. That’s really important. And when I think about the future, I have whole categories of places where I’m confident we have the best information. I don’t worry about being obviated by someone who’s going to come out and do the information a bit better. I worry about people who can take good-enough information and make it more useful, because they’re delivering it in more relevant ways. I think that we’ve done a very good job—amongst the old-information publishers—of adopting technology early. But what we did is we took the library onto the desktop. And people went to the desktop and they did research. The current phase we’re going through is taking that desktop and putting it in the hands of the professional. So it’s not about providing the best information utility. It’s about providing the right kind of tool—for a practicing lawyer, for a trader who’s not at his or her desk. Everybody needs to be thinking about that. Everybody needs to be thinking about how they can better serve their customers. Not just, “How can I sell a little bit more of a product that’s been really good for me for the past 10, 20, 30 years?” Cultivating leaders Where are the future leaders coming from? What’s that pipeline look like? What’s the current bench? What’s my team look like today? And are we up to the challenge? Not only is it are we individually up to the challenge; are we functioning as a team? Are we being open and honest with each other and constructive? We’ve done a lot of work around shared purpose, around values, and about the behaviors that we have to exhibit if we’re going to live those values. And I know that sounds like soft stuff. But I think it’s absolutely critical, particularly in this day and age when you need to move quickly. It isn’t about, you know, precisely describing the geographic boundaries of command and control. It’s about creating a team that’s capable of morphing and changing as opportunities arise, and redirecting throughout the year as opportunities arise. I worry about that a lot. And we spend more time on purpose, values, and culture with the top now 2,000 people in the organization than we ever have in the past. I spend a lot more time working on that long-term-succession-planning chart that we have. And it’s not succession because we need to make certain we can fill slots as they open, it’s “Where’s that pipeline of future leaders? Where are they coming from? What kind of experiences are they having? Where am I seeing people develop faster? And what are those common kinds of characteristics? Where can we expose some bright, young, talented leaders to the kind of experience that’s galvanizing top leaders today?” If I look across our company over the past three to five years, I’ve seen a lot of growth from a lot of people who’ve been in emerging markets. And as we have put more emphasis there and put more talent there, it’s a sink-or-swim situation when you’re far away from head office and no one’s there to help. We’re seeing a lot of great development in those kinds of roles. We’ve got rotational assignments. We’ve got cross-functional teams. I think we try everything that we can think of to provide both developmental opportunities for up-and-coming young managers, but also to get the right kind of skill sets on projects. That’s because many of our most exciting projects are in what today are small markets. And you say, “Hmm. Would I like to put a lot of resources behind that opportunity?” Yes. “Would I like to put a lot of resources behind that opportunity with a relatively inexperienced management team on the ground?” Eh, not really. So we do a little bit more of going and getting some of the experienced managers from other places and helping them go in and support some of those opportunities on the ground. And hopefully, that cross-pollination works for everybody. I spend far more time on talent even than I did when I started in the job. And I suspect far more time on talent, physically on talent, than any of my predecessors did. I think the times have changed. And the breadth of experiences that you’re looking for has changed. About the authors Jim Smith is the president and chief executive officer of Thomson Reuters. Rik Kirkland is the senior managing editor of McKinsey Publishing, based in McKinsey’s New York office. Source: www.mckinsey.com
BUS/BANK/TECH/GralIntThe rise of the digital bank
The following information is used for educational purposes only.
The rise of the digital bank
As European consumers move online, retail banks will have to follow. The problem is that most banks aren’t ready.
July 2014 | by’Tunde Olanrewaju
Across Europe, retail banks have digitized only 20 to 40 percent of their processes; 90 percent of European banks invest less than 0.5 percent of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions.
Neither customers nor digital upstarts are likely to wait for retail banks to catch up. Recent analysis shows that over the next five years, more than two-thirds of banking customers in Europe are likely to be “self-directed” and highly adapted to the online world. In fact, these same consumers already take great advantage of digital technologies in other industries—booking flights and holidays, buying books and music, and increasingly shopping for groceries and other goods via digital channels. Once a credible digital-banking proposition exists, customer adoption will be breathtakingly fast and digital laggards will be left exposed.
We estimate that digital transformation will put upward of 30 percent of the revenues of a typical European bank in play, particularly in high-turnover products such as personal loans and payments. We also estimate that banks can remove 20 to 25 percent of their cost base by leveraging this digital shift to transform how they process and service. Put together, the economics of a digital bank will give it a vast competitive edge over a traditional incumbent. It’s fair to say that getting digital banking right is a do-or-die challenge.
So why are European banks not aggressively moving in this direction? One of the reasons for the slower transformation in banking is that bank executives have tended to view digital transformation too narrowly, often as stand-alone front-end features such as mobile apps or online product-comparison charts. Commonly lost in the mix are the accompanying changes to frontline tools, internal processes, data assets, and staff capabilities needed to stitch everything together into a coherent front-to-back proposition. Although the journey may begin “digitally” on an online form or payment calculator, it does not remain so for long, as anyone who has taken on a mortgage can attest. Instead, the onerous documentation requirements and significant manual intervention that characterize the typical bank’s mortgage process soon emerge. This can seem jarring to customers accustomed to more seamless interactions with nonbanking services.
Some banks point to security and risk concerns as justification for their slow approach, but this is a contrast to other industries. The airline industry, arguably beset by even stronger risk concerns, has automated just about every aspect of its customer experience in the last ten years, boosting customer service without compromising safety. Banks can do the same. What’s more, the effort is likely to pay for itself—and then some.
Where exactly is the value in digital banking?
Our modeling indicates that European retail banks that pursue a full digital transformation, pulling all improvement levers, can realize improvements in earnings before interest, taxes, depreciation, and amortization of more than 40 percent over the next five years. Almost two-thirds of this potential value comes from the impact of digital on the cost base and loss provisions rather than from revenue uplift, which is why a focus beyond front-end investments is critical.
While the cost-saving opportunity for banks comes in many forms and touches every area of the bank, there are two areas that are especially significant and represent the bulk of the value: automation of servicing and fulfillment processes and migration of front-end activity to digital channels. On automation, European banks can realize 40 to 90 percent cost reductions in a range of internal processes through careful deployment of work-flow tools and self-servicing capabilities for customers and staff. On front-end transformation, beyond diverting existing branch activity into digital channels, digital tools can also be used to augment frontline servicing (for example, with iPad forms rather than paper forms, or videoconference access to specialists to maximize their utilization)—easily doubling staff productivity and enhancing the customer experience.
The potential for revenue uplift is not quite so concentrated. Rather, European banks need to pursue a broader range of opportunities, including improved customer targeting via digital marketing and microsegmentation, more dynamic, tailored pricing and product bundling, third-party integration (for example, with Facebook), product white-labeling, appropriate distribution via aggregators, and, of course, establishment of distinctive mobile and online sales offerings. In the near term, we expect shorter-tenure, high-turnover products like credit cards, loans, and payments to see the most digital transformation. In fact, these are the areas most under attack from new digital entrants. Looking further ahead, bank accounts and mortgages, which together drive more than 50 percent of many banks’ revenues and usually provide “sticky” annuity streams, will be brought into the fray. Given this development, European banks will need to carefully watch the evolution of their digital share and the success rate of digital products in the front book. The future replacement rate of these annuity streams will be increasingly dependent on digital capabilities. In essence, it’s about securing the future and not being lulled into a false sense of security based on the back book.
How to go digital without going crazy
Going digital doesn’t have to mean millions in new investment dollars or convulsive upheaval in IT. Sizable investment will no doubt be necessary in some areas, but in general, many of the elements banks need to exploit this opportunity may already be in place. Banks just need to leverage them better and invest in these targeted ways.
Maximize the use of existing technology. Many banks have widely deployed imaging and work-flow systems, online servicing, capacity-management software, interactive-voice-response systems, and other connectivity and work-management technologies. But they’re not using them widely or well enough. One European bank, for instance, installed a new high-resolution-imaging platform but never fully enforced its use. Customer-service representatives continued to send documentation by fax, and the poor image quality led to significant inefficiency in downstream processing. Addressing this problem requires systematic evaluation of existing capabilities, their usage rates, and barriers to adoption.
Apply lightweight technology interventions. Banks can generate significant performance gains with surprisingly small targeted investments. Examples include wider deployment of tools like e-forms and work-flow systems, which can be implemented relatively rapidly, sometimes without deep integration into complex legacy architectures. The relationship managers and underwriters at one bank, for instance, got together with IT to design a stripped-down and user-friendly online loan application. The form automatically adapts to input data and guides underwriters on which risk processes to follow. Another European bank sped up mortgage decisions by tweaking its existing application to follow standard rules, such as minimum down-payment thresholds and rating data, which allowed applications to be scored and routed faster, with less manual intervention.
Place a few selective big bets. There will be places where you need to pursue more sweeping transformation investments. However, instead of trying to automate every aspect of a given process or product, home in on the few that drive the most capacity consumption and give the greatest return. Do not build a gleaming digital empire for the sake of it. One European bank that went through a systematic mapping of its processes for automation potential found fewer than ten processes that represented the bulk of full-time-employee capacity. In these targeted areas, the bank embarked on more radical investments, retiring old platforms, deploying new digital solutions, and reinventing the way the process works.
Address the people dynamics
No amount of technology will help if you don’t address the people issues driven by digital. Success requires more than rethinking technology; it requires rethinking the organizational model, too, especially when it comes to skills, structure, incentives, and performance management. The following steps can help.
Set the right structure and incentives. There’s more than one way to organize around digital. Some European banks appoint a head of digital with profit-and-loss responsibility. Others use a center-of-excellence (COE) model to develop offerings that the rest of the business can take and deploy. Either model can work, but you must make concerted efforts to realign incentives to ensure collaboration. For instance, creating a COE but not giving the business digital targets often leads to a lot of technology being successfully built, but with limited drive and pull for adoption. In extreme cases, the wrong functionality is built—it’s exciting to demonstrate to senior leaders and wins awards externally but ultimately creates no bottom-line impact.
Increase the focus on business outcomes, not digital activity. Too often, banks manage the progress of their digital transformations by tracking activity metrics, such as the number of app downloads and log-in rates. Such metrics are inadequate proxies for business value. Banks must set clear aspirations for value outcomes, looking at productivity, servicing-unit costs, and lead-conversion rates, and link these explicitly to digital investments. Only then will the collective focus be on shaping the right actions to fully capture the value available.
Formulate and implement a people vision. Finally, you need a vision for the role of employees in the new digital reality. This takes two forms: expectations of how they spend their time and how they work alongside the new technologies, and clarity on what technology competencies they need to develop. Digital transformation will clearly diminish the importance of some roles, which is why many employees will view it as a threat and be resistant to the change that digital brings. However, it also shifts the focus of many workers’ time toward higher-value tasks, creating exciting new opportunities for development. For example, relationship managers will spend less time capturing customer details and more time giving valuable advice. Additionally, deeper awareness of the technical capabilities available and how they can affect processes will be a prerequisite to effectively manage in this new world. Business leaders need to be conversant in how technology can be leveraged to address commercial challenges. You cannot rely on bringing in new talent from digitally savvy industries to transform your bank. New talent provides an important stimulus, but digital needs to become a new management competence across the organization.
Digitization will change the traditional retail-banking business model, in some cases radically. The good news is that there is plenty of upside awaiting those European banks willing to embrace it. The bad news is that change is coming whether or not banks are ready.
About the author
’Tunde Olanrewaju is a principal in McKinsey’s London office. This article was originally published in the Financial Times on October 25, 2013 (ft.com).
Source: www.mckinsey.com
The rise of the digital bank
As European consumers move online, retail banks will have to follow. The problem is that most banks aren’t ready.
July 2014 | by’Tunde Olanrewaju
Across Europe, retail banks have digitized only 20 to 40 percent of their processes; 90 percent of European banks invest less than 0.5 percent of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions.
Neither customers nor digital upstarts are likely to wait for retail banks to catch up. Recent analysis shows that over the next five years, more than two-thirds of banking customers in Europe are likely to be “self-directed” and highly adapted to the online world. In fact, these same consumers already take great advantage of digital technologies in other industries—booking flights and holidays, buying books and music, and increasingly shopping for groceries and other goods via digital channels. Once a credible digital-banking proposition exists, customer adoption will be breathtakingly fast and digital laggards will be left exposed.
We estimate that digital transformation will put upward of 30 percent of the revenues of a typical European bank in play, particularly in high-turnover products such as personal loans and payments. We also estimate that banks can remove 20 to 25 percent of their cost base by leveraging this digital shift to transform how they process and service. Put together, the economics of a digital bank will give it a vast competitive edge over a traditional incumbent. It’s fair to say that getting digital banking right is a do-or-die challenge.
So why are European banks not aggressively moving in this direction? One of the reasons for the slower transformation in banking is that bank executives have tended to view digital transformation too narrowly, often as stand-alone front-end features such as mobile apps or online product-comparison charts. Commonly lost in the mix are the accompanying changes to frontline tools, internal processes, data assets, and staff capabilities needed to stitch everything together into a coherent front-to-back proposition. Although the journey may begin “digitally” on an online form or payment calculator, it does not remain so for long, as anyone who has taken on a mortgage can attest. Instead, the onerous documentation requirements and significant manual intervention that characterize the typical bank’s mortgage process soon emerge. This can seem jarring to customers accustomed to more seamless interactions with nonbanking services.
Some banks point to security and risk concerns as justification for their slow approach, but this is a contrast to other industries. The airline industry, arguably beset by even stronger risk concerns, has automated just about every aspect of its customer experience in the last ten years, boosting customer service without compromising safety. Banks can do the same. What’s more, the effort is likely to pay for itself—and then some.
Where exactly is the value in digital banking?
Our modeling indicates that European retail banks that pursue a full digital transformation, pulling all improvement levers, can realize improvements in earnings before interest, taxes, depreciation, and amortization of more than 40 percent over the next five years. Almost two-thirds of this potential value comes from the impact of digital on the cost base and loss provisions rather than from revenue uplift, which is why a focus beyond front-end investments is critical.
While the cost-saving opportunity for banks comes in many forms and touches every area of the bank, there are two areas that are especially significant and represent the bulk of the value: automation of servicing and fulfillment processes and migration of front-end activity to digital channels. On automation, European banks can realize 40 to 90 percent cost reductions in a range of internal processes through careful deployment of work-flow tools and self-servicing capabilities for customers and staff. On front-end transformation, beyond diverting existing branch activity into digital channels, digital tools can also be used to augment frontline servicing (for example, with iPad forms rather than paper forms, or videoconference access to specialists to maximize their utilization)—easily doubling staff productivity and enhancing the customer experience.
The potential for revenue uplift is not quite so concentrated. Rather, European banks need to pursue a broader range of opportunities, including improved customer targeting via digital marketing and microsegmentation, more dynamic, tailored pricing and product bundling, third-party integration (for example, with Facebook), product white-labeling, appropriate distribution via aggregators, and, of course, establishment of distinctive mobile and online sales offerings. In the near term, we expect shorter-tenure, high-turnover products like credit cards, loans, and payments to see the most digital transformation. In fact, these are the areas most under attack from new digital entrants. Looking further ahead, bank accounts and mortgages, which together drive more than 50 percent of many banks’ revenues and usually provide “sticky” annuity streams, will be brought into the fray. Given this development, European banks will need to carefully watch the evolution of their digital share and the success rate of digital products in the front book. The future replacement rate of these annuity streams will be increasingly dependent on digital capabilities. In essence, it’s about securing the future and not being lulled into a false sense of security based on the back book.
How to go digital without going crazy
Going digital doesn’t have to mean millions in new investment dollars or convulsive upheaval in IT. Sizable investment will no doubt be necessary in some areas, but in general, many of the elements banks need to exploit this opportunity may already be in place. Banks just need to leverage them better and invest in these targeted ways.
Maximize the use of existing technology. Many banks have widely deployed imaging and work-flow systems, online servicing, capacity-management software, interactive-voice-response systems, and other connectivity and work-management technologies. But they’re not using them widely or well enough. One European bank, for instance, installed a new high-resolution-imaging platform but never fully enforced its use. Customer-service representatives continued to send documentation by fax, and the poor image quality led to significant inefficiency in downstream processing. Addressing this problem requires systematic evaluation of existing capabilities, their usage rates, and barriers to adoption.
Apply lightweight technology interventions. Banks can generate significant performance gains with surprisingly small targeted investments. Examples include wider deployment of tools like e-forms and work-flow systems, which can be implemented relatively rapidly, sometimes without deep integration into complex legacy architectures. The relationship managers and underwriters at one bank, for instance, got together with IT to design a stripped-down and user-friendly online loan application. The form automatically adapts to input data and guides underwriters on which risk processes to follow. Another European bank sped up mortgage decisions by tweaking its existing application to follow standard rules, such as minimum down-payment thresholds and rating data, which allowed applications to be scored and routed faster, with less manual intervention.
Place a few selective big bets. There will be places where you need to pursue more sweeping transformation investments. However, instead of trying to automate every aspect of a given process or product, home in on the few that drive the most capacity consumption and give the greatest return. Do not build a gleaming digital empire for the sake of it. One European bank that went through a systematic mapping of its processes for automation potential found fewer than ten processes that represented the bulk of full-time-employee capacity. In these targeted areas, the bank embarked on more radical investments, retiring old platforms, deploying new digital solutions, and reinventing the way the process works.
Address the people dynamics
No amount of technology will help if you don’t address the people issues driven by digital. Success requires more than rethinking technology; it requires rethinking the organizational model, too, especially when it comes to skills, structure, incentives, and performance management. The following steps can help.
Set the right structure and incentives. There’s more than one way to organize around digital. Some European banks appoint a head of digital with profit-and-loss responsibility. Others use a center-of-excellence (COE) model to develop offerings that the rest of the business can take and deploy. Either model can work, but you must make concerted efforts to realign incentives to ensure collaboration. For instance, creating a COE but not giving the business digital targets often leads to a lot of technology being successfully built, but with limited drive and pull for adoption. In extreme cases, the wrong functionality is built—it’s exciting to demonstrate to senior leaders and wins awards externally but ultimately creates no bottom-line impact.
Increase the focus on business outcomes, not digital activity. Too often, banks manage the progress of their digital transformations by tracking activity metrics, such as the number of app downloads and log-in rates. Such metrics are inadequate proxies for business value. Banks must set clear aspirations for value outcomes, looking at productivity, servicing-unit costs, and lead-conversion rates, and link these explicitly to digital investments. Only then will the collective focus be on shaping the right actions to fully capture the value available.
Formulate and implement a people vision. Finally, you need a vision for the role of employees in the new digital reality. This takes two forms: expectations of how they spend their time and how they work alongside the new technologies, and clarity on what technology competencies they need to develop. Digital transformation will clearly diminish the importance of some roles, which is why many employees will view it as a threat and be resistant to the change that digital brings. However, it also shifts the focus of many workers’ time toward higher-value tasks, creating exciting new opportunities for development. For example, relationship managers will spend less time capturing customer details and more time giving valuable advice. Additionally, deeper awareness of the technical capabilities available and how they can affect processes will be a prerequisite to effectively manage in this new world. Business leaders need to be conversant in how technology can be leveraged to address commercial challenges. You cannot rely on bringing in new talent from digitally savvy industries to transform your bank. New talent provides an important stimulus, but digital needs to become a new management competence across the organization.
Digitization will change the traditional retail-banking business model, in some cases radically. The good news is that there is plenty of upside awaiting those European banks willing to embrace it. The bad news is that change is coming whether or not banks are ready.
About the author
’Tunde Olanrewaju is a principal in McKinsey’s London office. This article was originally published in the Financial Times on October 25, 2013 (ft.com).
Source: www.mckinsey.com
BUS/TECH/GralInt-McKinsey Interview:Citigroup on engaging the digital customer (unedited)
The following information is used for educational purposes only.
Interview
Citigroup on engaging the digital customer
For Citigroup CEO Michael L. Corbat, growth will come from within: focusing on customers’ financial needs to help inform the bank’s digital offerings, as well as understanding when to invest and when to stay the course.
June 2015
The rush to meet bank customers’ growing digital needs has sparked debate about whether traditional branches should become a thing of the past. For Citigroup chief executive officer Michael L. Corbat, the answer is simple: no. That’s because even as some customers seek more digital-banking options, others continue to use branches for a variety of services. In this interview with McKinsey’s Rik Kirkland, Corbat explains how Citi is seeking to better understand its customers, meet their needs, and cope with an ever-changing regulatory environment. An extended and edited transcript of Corbat’s remarks follows.
Interview transcript Pursuing organic growth As opposed to growth through acquisition—which I don’t think will occur—we’re going to be primarily, if not exclusively, focused on organic growth. From a regulatory perspective, we see that if big financial institutions don’t have scale, they aren’t going to be allowed to buy it. That means if you don’t have scale, your alternative is to build it. And so that organic growth is going to come in a few ways. One is that we’re very focused in terms of our client and customer segmentation, and we just have to get more out of our existing client base. If you look at the segmentation we’ve done in terms of the way we work in countries or in our products, there are areas around the world that we’ve labeled as “invest to grow.” And we’ve got a couple of handfuls of those. We’ve also got those we view as “staying the course”—reasonable, GDP-style growth. And we’ve got those where we actually don’t necessarily see the robust opportunity—where we should be, in essence, trimming resources. That is, supporting customers and clients, but not in an investment or growth mode, because when you try to force growth in those places, we’ve learned that it typically isn’t good growth. We’re in the institutional-client business, and we’ve got a broad range of products there, ranging from advice through investment banking, corporate banking, private banking. We’ve got our markets business—our capital-markets business. And, of course, we have our transaction-service business. So, coming to work in 100 countries, people often say, “How do you decide where you want to be, and where are those places that you want to make investments?” And the answer, in many ways, is very straightforward. It’s where our customers and clients want to be. Where do the Nestlés, the Coca-Colas, the General Electrics see growth? It’s our objective to have the resources to meet that need, whether that’s a balance sheet, capital-markets access, advice, transaction services, or retail banking. Our objective is to be there on the ground, to have those products available to them, to make sure that we’ve got the resources in terms of capital-balance-sheet liquidity and to be able to show them what it is that they’re wanting and expecting. Oftentimes, as an example, companies approach cash management on a regional basis. Africa is an example. As the only Pan-African bank operating in all three or four subterritories, we’ve got the ability to offer a comprehensive solution—as opposed to having to use a French bank in the north and a British bank in the west, et cetera. We’ve got the ability to come together, and we’ve got the power of pricing that we can deliver on that front. From a consumer perspective, it feels much more like a local business. But what’s going on behind the scenes is our ability to leverage global infrastructure. And if you look at our presences in many consumer countries, we’re not the biggest bank, but we have the ability to create scale out of the common approach, the common systems that we’re doing in the middle and back offices. It radically changes and improves our customer service, our call centers, our speed to purpose, our investments, and the focus of our investments. So on the front end, it feels a bit more local. But what’s going on behind the scenes is that it actually comes together nicely. Engaging the digital customer In order to be a bank and to be successful, digital has to be an integral part of that strategy. And you can’t think of it along separate channels. What we see today from the consumer parts of our business is that the way we’re interacting with and attracting customers toward our products has changed. The ways our customers are choosing to observe and to be part of their financial lives have changed. An example I use is the serial balance checker who used to call our call center five times a day to hear their balance. That person can now simply go online or check the mobile app wherever they are. This way, we allow people to be the architects of the information they’d like to receive and when they’d like to receive it. So there’s a transition happening. Oftentimes, we speak about the branch being the physical vehicle of delivery, of really taking a customer from physical to digital. But if you travel around the world and look at our branches, our branch constructs are radically changing. We’re piloting smart branches: building new branches that are, in many cases, just 700 square feet, no counters, a couple of automated cash machines, lending machines. I fully expect over time that we’re going to continue to see, as an industry, a reduction in terms of physical-branch footprint. If you look at branch traffic and the things today that we can do online, there’s not that necessity to go into a branch like there was historically. Digital is, in many ways, revolutionizing many of the things we do, from finance to parts of operations to the way client onboarding happens. A great example is the transformation that we’re taking our consumer business through. If you go back and you look at Citi historically, it’s very product-centric: Citi mortgage, Citi auto, Citi this, Citi that. And now it’s much more client-centric. Digital has been very powerful in terms of our ability to look at our customers holistically, of having that information and being able to pull that information together so that we can see the entire financial lives of our customers. We can service them better, we can help them make better decisions, and we can be much more focused in terms of the products that we’re offering. That resonates with them. And we’re moving away from the so-called big project, big thing. A lot of digital today is about experimentation in terms of what works. It’s really trying to turn that lens and say, “What are the things that we can be doing? Where are the pain points?” And in a digital age, we learned that in our own applications online, we had certain things we were asking for that weren’t necessary, that were causing customers to just stop filling out the application. So now, just measuring clicks, we can see where we’re losing their attention or where people become uncomfortable giving us information. We really went back and tore things apart by looking at what was really essential and putting ourselves in the customer’s perspective. Retaining talent I’m going on 32 years at our company today. For the average employee in the financial-services industry, it’s four or five years between jobs. What we have to do is not only bring in the right talent but also keep the talent. And from Citi’s perspective, what we’ve got the ability to do is to offer multiple careers within the same firm. We pay attention to whether the employee has a geographical preference or a product preference or whatever those things are. And that’s caused us to really engage in a very different way with our employees, asking them to really take ownership and be vocal about their careers. Our commitment back to them is if they get it halfway, we’ll meet you more than halfway in terms of being engaged. The response around that so far—it’s still early—has been positive. Leading in a regulated age One of the big challenges is that regulation has been evolving. And, like anything in life, it’d be great if somebody came in and said, “Here are the rules. Go to work.” What we’ve seen is the evolution of regulation, capital, increasing capital, liquidity, stress testing, resolution. The good news is I think we’re getting toward the latter stages of definition and implementation. So I’d hope in the next couple of years we get those largely finalized. I probably spend somewhere in the order of 25 to 30 percent of my time on regulation and on historical issues. I’ve been very conscious of making sure that even though the institution needs to spend a lot of time on regulation, only the people who absolutely need to spend time on it do so. Our other people have the ability, then, really to be focused on customers and clients. We have two significant work streams under way. One is our work around what we’ve termed as execution 2.0, which is a combination or series of six work streams. Every member of my management team, of my direct reports, is an owner of one of those work streams. It’s incorporated in my scorecard and cascaded down through the institution. Citi takes a similar approach to the way we approach ethics, ranging from making sure our employees feel comfortable escalating issues to their supervisors to reducing the number of issues that we’re creating to finding faster fixes to things as we identify them. About the authors Michael L. Corbat is the CEO of Citigroup. Rik Kirkland is the senior managing editor of McKinsey Publishing, based in McKinsey’s New York office. Source: www.mckinsey.com
Interview
Citigroup on engaging the digital customer
For Citigroup CEO Michael L. Corbat, growth will come from within: focusing on customers’ financial needs to help inform the bank’s digital offerings, as well as understanding when to invest and when to stay the course.
June 2015
The rush to meet bank customers’ growing digital needs has sparked debate about whether traditional branches should become a thing of the past. For Citigroup chief executive officer Michael L. Corbat, the answer is simple: no. That’s because even as some customers seek more digital-banking options, others continue to use branches for a variety of services. In this interview with McKinsey’s Rik Kirkland, Corbat explains how Citi is seeking to better understand its customers, meet their needs, and cope with an ever-changing regulatory environment. An extended and edited transcript of Corbat’s remarks follows.
Interview transcript Pursuing organic growth As opposed to growth through acquisition—which I don’t think will occur—we’re going to be primarily, if not exclusively, focused on organic growth. From a regulatory perspective, we see that if big financial institutions don’t have scale, they aren’t going to be allowed to buy it. That means if you don’t have scale, your alternative is to build it. And so that organic growth is going to come in a few ways. One is that we’re very focused in terms of our client and customer segmentation, and we just have to get more out of our existing client base. If you look at the segmentation we’ve done in terms of the way we work in countries or in our products, there are areas around the world that we’ve labeled as “invest to grow.” And we’ve got a couple of handfuls of those. We’ve also got those we view as “staying the course”—reasonable, GDP-style growth. And we’ve got those where we actually don’t necessarily see the robust opportunity—where we should be, in essence, trimming resources. That is, supporting customers and clients, but not in an investment or growth mode, because when you try to force growth in those places, we’ve learned that it typically isn’t good growth. We’re in the institutional-client business, and we’ve got a broad range of products there, ranging from advice through investment banking, corporate banking, private banking. We’ve got our markets business—our capital-markets business. And, of course, we have our transaction-service business. So, coming to work in 100 countries, people often say, “How do you decide where you want to be, and where are those places that you want to make investments?” And the answer, in many ways, is very straightforward. It’s where our customers and clients want to be. Where do the Nestlés, the Coca-Colas, the General Electrics see growth? It’s our objective to have the resources to meet that need, whether that’s a balance sheet, capital-markets access, advice, transaction services, or retail banking. Our objective is to be there on the ground, to have those products available to them, to make sure that we’ve got the resources in terms of capital-balance-sheet liquidity and to be able to show them what it is that they’re wanting and expecting. Oftentimes, as an example, companies approach cash management on a regional basis. Africa is an example. As the only Pan-African bank operating in all three or four subterritories, we’ve got the ability to offer a comprehensive solution—as opposed to having to use a French bank in the north and a British bank in the west, et cetera. We’ve got the ability to come together, and we’ve got the power of pricing that we can deliver on that front. From a consumer perspective, it feels much more like a local business. But what’s going on behind the scenes is our ability to leverage global infrastructure. And if you look at our presences in many consumer countries, we’re not the biggest bank, but we have the ability to create scale out of the common approach, the common systems that we’re doing in the middle and back offices. It radically changes and improves our customer service, our call centers, our speed to purpose, our investments, and the focus of our investments. So on the front end, it feels a bit more local. But what’s going on behind the scenes is that it actually comes together nicely. Engaging the digital customer In order to be a bank and to be successful, digital has to be an integral part of that strategy. And you can’t think of it along separate channels. What we see today from the consumer parts of our business is that the way we’re interacting with and attracting customers toward our products has changed. The ways our customers are choosing to observe and to be part of their financial lives have changed. An example I use is the serial balance checker who used to call our call center five times a day to hear their balance. That person can now simply go online or check the mobile app wherever they are. This way, we allow people to be the architects of the information they’d like to receive and when they’d like to receive it. So there’s a transition happening. Oftentimes, we speak about the branch being the physical vehicle of delivery, of really taking a customer from physical to digital. But if you travel around the world and look at our branches, our branch constructs are radically changing. We’re piloting smart branches: building new branches that are, in many cases, just 700 square feet, no counters, a couple of automated cash machines, lending machines. I fully expect over time that we’re going to continue to see, as an industry, a reduction in terms of physical-branch footprint. If you look at branch traffic and the things today that we can do online, there’s not that necessity to go into a branch like there was historically. Digital is, in many ways, revolutionizing many of the things we do, from finance to parts of operations to the way client onboarding happens. A great example is the transformation that we’re taking our consumer business through. If you go back and you look at Citi historically, it’s very product-centric: Citi mortgage, Citi auto, Citi this, Citi that. And now it’s much more client-centric. Digital has been very powerful in terms of our ability to look at our customers holistically, of having that information and being able to pull that information together so that we can see the entire financial lives of our customers. We can service them better, we can help them make better decisions, and we can be much more focused in terms of the products that we’re offering. That resonates with them. And we’re moving away from the so-called big project, big thing. A lot of digital today is about experimentation in terms of what works. It’s really trying to turn that lens and say, “What are the things that we can be doing? Where are the pain points?” And in a digital age, we learned that in our own applications online, we had certain things we were asking for that weren’t necessary, that were causing customers to just stop filling out the application. So now, just measuring clicks, we can see where we’re losing their attention or where people become uncomfortable giving us information. We really went back and tore things apart by looking at what was really essential and putting ourselves in the customer’s perspective. Retaining talent I’m going on 32 years at our company today. For the average employee in the financial-services industry, it’s four or five years between jobs. What we have to do is not only bring in the right talent but also keep the talent. And from Citi’s perspective, what we’ve got the ability to do is to offer multiple careers within the same firm. We pay attention to whether the employee has a geographical preference or a product preference or whatever those things are. And that’s caused us to really engage in a very different way with our employees, asking them to really take ownership and be vocal about their careers. Our commitment back to them is if they get it halfway, we’ll meet you more than halfway in terms of being engaged. The response around that so far—it’s still early—has been positive. Leading in a regulated age One of the big challenges is that regulation has been evolving. And, like anything in life, it’d be great if somebody came in and said, “Here are the rules. Go to work.” What we’ve seen is the evolution of regulation, capital, increasing capital, liquidity, stress testing, resolution. The good news is I think we’re getting toward the latter stages of definition and implementation. So I’d hope in the next couple of years we get those largely finalized. I probably spend somewhere in the order of 25 to 30 percent of my time on regulation and on historical issues. I’ve been very conscious of making sure that even though the institution needs to spend a lot of time on regulation, only the people who absolutely need to spend time on it do so. Our other people have the ability, then, really to be focused on customers and clients. We have two significant work streams under way. One is our work around what we’ve termed as execution 2.0, which is a combination or series of six work streams. Every member of my management team, of my direct reports, is an owner of one of those work streams. It’s incorporated in my scorecard and cascaded down through the institution. Citi takes a similar approach to the way we approach ethics, ranging from making sure our employees feel comfortable escalating issues to their supervisors to reducing the number of issues that we’re creating to finding faster fixes to things as we identify them. About the authors Michael L. Corbat is the CEO of Citigroup. Rik Kirkland is the senior managing editor of McKinsey Publishing, based in McKinsey’s New York office. Source: www.mckinsey.com
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