Author and Fast Company co-founder Bill Taylor spoke with us in 2015 about his book-in-progress, “Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways.” The book is out this month, and we’ve got an excerpt that focuses on how Britain’s Metro Bank — the first new “high street” bank to launch in that country in more than a century — is shaking up financial services.
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Metro Bank is not just another entrepreneurial growth story. It is quite literally unlike any financial institution England has seen before.
Like all of Metro’s retail branches, the location in Milton Keynes, a pleasant, active, fairly unremarkable city about fifty miles northwest of London, is bright and brash, playful and provocative. The shimmering glass structure, with its red-and-black interior color scheme, its high ceilings and silver columns, evokes the spirit of a polished Apple Store rather than a musty bank. Signs in the lobby and slogans on the screens of the ATMs feel like rallying cries more than product messages: LOVE YOUR BANK AT LAST! DOGS RULE! KIDS ROCK! NO MORE STUPID BANK RULES! Brightly colored coin-counting stations, called Magic Money Machines, look like contraptions Willy Wonka might have designed for his chocolate factory. Images of the company’s mascot, an oversized M named Metro Man, loom large. (Metro Man himself is on hand to greet the crowd in Milton Keynes.) Bank staffers make their own design statements in keeping with Metro’s look and feel. The women wear red dresses with black blazers, or black dresses with red blazers, the men wear suits with crisp white shirts and red ties.
“We didn’t come here to make a better bank branch,” declares Shirley Hill, the wife of Metro Bank cofounder Vernon Hill and the person most responsible for Metro’s “architectural fabric” — a one-of-a-kind blend of physical space, customer experience, and company culture that distinguishes the bank from all of its peers in the United Kingdom. “We came here to be the greatest in the world. To be a little better is not very interesting, even though it is very easy to do.” So what does it take to be the greatest in the world? “It requires fanatical attention to detail,” she replies. “Everything we do either helps or hurts the brand. Everything. If a sign is crooked, if one of our people doesn’t smile, if we don’t maintain a sense of energy, then we are hurting the message. We have to make customer service fun for our people. People won’t do it if it isn’t fun, if they don’t feel proud every day. Nobody else works like this.”
It’s hard to argue the point. For decades, centuries, really, banking in the United Kingdom has been dominated by five so-called high street institutions, the British term for retail banks that accept consumer deposits. The Big Five (giants such as Lloyds, Barclays, and Royal Bank of Scotland) are immensely powerful, highly unpopular, and virtually indistinguishable from one another. A think-tank report from London’s Cass Business School estimates that the giant banks account for 77 percent of the United Kingdom’s personal accounts and 85 percent of its business accounts, even as the banking system generated 21 million customer complaints from 2008 to mid-2014. The Big Five have struggled under “a toxic culture [that was] decades in the making,” the report concludes, with demoralized employees, unhappy customers, and low public esteem. That culture, the think tank warned, “will take a generation to clean up.”
Metro Bank is the forward-looking alternative to this tortured history, with an emphasis on history. It is the first new high street bank chartered in England since 1835. Talk about old money: Metro’s “youngest” Big Five rival was incorporated before Buckingham Palace became the official home of the British monarch. (Queen Victoria took up residence back in 1837.) No wonder the upstart feels so unorthodox, so full of swagger, so eager to reinvent every aspect of how the industry operates. For example, in a country with a financial system infamous for limited hours and plentiful “bank holidays,” Metro locations are open 362 days per year, twelve hours a day during the week, ten hours on Saturday, six on Sunday. (The bank’s locations are closed only on Christmas, Easter, and New Year’s Day.)
Open an Account in Fifteen Minutes, No Paper Forms Required
Moreover, in an industry plagued by long lines and painfully slow response times, Metro vows that new customers can walk into a branch, open an account, and leave with a working debit card and full access to online banking—all within fifteen minutes and without any paper forms. It imposes no fees on checking accounts or ATM cards, and makes huge investments in amenities (such as safe-deposit boxes and its coin-counting machines) that have largely vanished from the banking scene in many places. In Slough, a city one hour south of Milton Keynes, Metro opened the first drive-through bank in UK history, an innovation deemed so remarkable (seriously) that it attracted the attention of the BBC.
This sense of enthusiasm is not limited to customers and the media. Metro Bank has attracted a genuinely impressive roster of financial backers, from high-powered American billionaires (including hedge-fund titan Steven A. Cohen, home builders Bruce and Robert Toll, and Willett Advisors LLC, which handles investments for Michael Bloomberg) to blue-chip institutional investors such as Fidelity and Wellington Management. In March 2016, less than six years after the bank opened its first location, Hill and Metro Bank announced that they had raised another big round of capital from investors (more than $580 million) and were preparing to be listed on the London Stock Exchange with a market value of roughly $2.3 billion.
Indeed, on the day I visited Metro Bank’s London headquarters, one of Hill’s early financial backers, a value investor by the name of Thomas Tryforos, happened to be visiting as well. Tryforos, who is a disciple of the security-analysis principles pioneered in the 1930s by Benjamin Graham and David Dodd, and who, like they once did, teaches at Columbia Business School, had never before invested in a new company, which are, by and large, anathema to value investors. “This was the second-biggest investment I ever made, and the first time I invested in a start-up,” Tryforos told me. “Now I ask myself, ‘Why didn’t I make it even bigger?’ You can’t imagine this until you’ve seen it yourself. Every person I meet is like a marketing machine for Metro Bank. I went to a branch opening last year and I thought, ‘This is my favorite company to visit because it’s fun.’ And if it’s fun for me, as an investor, what must it be like for customers?'”
Hunting for People with ‘Zest’
Not to mention employees. Like any fast-growing company, Metro Bank has been on a hiring binge over the last five years, building a team of senior executives, private bankers, commercial lenders, and front-line service people to staff the retail stores. (“Our job is to find great bankers trapped in broken bank models,” Vernon Hill quips.) Of course Metro evaluates candidates for their product knowledge, technical expertise, and relevant industry experience, especially as it applies to executives and specialists in commercial banking. But what the bank insists on, explains Danielle Harmer, Metro’s chief people officer, is what she calls “zest”—a palpable sense of enthusiasm, a positive energy and sense of commitment to the cause, that informs how people behave, communicate, and interact. “Ultimately, how we treat each other is how we treat our customers,” she told me. “So who you are counts for as much as what you know. You can be outwardly zesty or inwardly zesty, either way is fine. But if you’re the kind of person who sucks the energy out of those around you, this is the wrong place for you.”
But here’s what’s even more remarkable about the rise of Metro Bank in the United Kingdom. It is, in a real sense, nothing all that new. In fact, it is the living, breathing reincarnation of a business model that Vernon Hill created decades ago in the United States to great acclaim and recognition, and ultimately to great wealth. Hill founded Commerce Bank in 1973, at age twenty-six, with a handful of employees, $1.5 million in capital, and one location in southern New Jersey. Commerce was sold thirty-five years later to Canada’s TD Bank for $8.5 billion — after Hill and his colleagues built one of the country’s most distinctive financial-services brands, with outposts from Florida to Maine and a major presence in the ultracompetitive New York City market.
“Every great company has redefined the business that it‘s in,” Hill likes to say, and that’s what Commerce did up and down the East Coast of the United States.
As I stood next to him in Milton Keynes, he watched a crowd of visitors sizing up Metro Bank’s newest location. “People here hate their banks,” Hill told me. “In America, people dislike their banks, they find them annoying. This is rabid hate. The high street banks had a cartel. They trained people to accept whatever they offered because they had no alternative. Well, we are the alternative. And customers are going berserk. Everything we did in New York works better in London. Metro will do in ten years what it took Commerce more than thirty years to do.”
Creating a ‘Lighthouse Identity’
Metro Bank has created what brand strategist Adam Morgan dubs a “lighthouse identity.” Morgan is the founder of a global marketing agency called eatbigfish, with offices in London, San Francisco, and New York City. He and his colleagues have spent years studying companies that break from prevailing norms and practices in their fields. These challenger brands, Morgan argues, exhibit many different personalities, from the Democratiser to the Irreverent Maverick to the Feisty Underdog.
But all of them exude a strategic presence built on four key pillars. First is a point of view: “They have a very particular take on how they see the world.” Next is intensity: “They offer an intense projection of who they are in everything they do.” Then comes salience: “They are highly intrusive, one cannot avoid noticing their activity even if not actively looking in their direction.” Finally, they are built on rock: They assert “a compelling conviction that the stance they are taking is one that is uniquely theirs.”
It’s this lighthouse identity, their richly defined values proposition, that separates challenger brands from the incumbents in their field, most of whom are content to refine their dollars-and-cents value proposition. Every time you encounter them, however you encounter them, you understand how they see the world and what they care about, why their point of view matters and how they expect to win, and why what they’re doing and how they’re competing is relevant to you. In short, companies and brands with a lighthouse identity “do not attempt to navigate by the consumer,” Morgan argues. “Instead, they invite the consumer to navigate by them.”
To be sure, Vernon Hill had access to vast resources that he has used to play for big stakes in and around London, raising huge sums of private capital to establish a one-of-a-kind presence in one of the world’s most vital cities. But you don’t need deep pockets or marketing glitz to develop a richly defined values proposition. Nor, for that matter, must a lighthouse identity be built first and foremost around a focus on customers. Sometimes, maybe most of the time, entrepreneurs and innovators begin by challenging the expectations of their customers and building an organization that can deliver on a new set of expectations. But they can also begin by challenging the expectations of the organization itself, and allowing the people in it to fashion compelling alternatives to a dispiriting status quo.
Excerpted with permission from “Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways,” by Bill Taylor
