CU Employee Community Chair

Digital Trinity and You

Change is one aspect which everyone is noticing, experiencing, feeling and fearing. It cannot be anticipated or predicted before a reasonable time. Data plays a huge role amidst this change and controlling its modulations. In this session, Christopher Surdak ( President, Surdak and company, deals with the notion of digital transformation and the impact it has on credit unions. He draws various insights in his discussion from his books, Data Crush and Jerk.

Six challenges of the New normal :

Six things in the world that are driving the way we live, the way we work, and which drive our expectations.

Quality: Consumers expect perfection. Deliver less, and your customers will abandon you forever. What matters is what a credit union does in the face of a problem, when it has only a limited duration of time to make it up to the consumer.

  1. Ubiquity: Globalization means anything, anywhere, anytime. Anything less is unacceptable.
  2. Immediacy: Immediate gratification. Instant and predictive services and solutions. Meeting expectations immediately or your customers lose interest.
  3. Disengagement: Don’t build, don’t run, don’t outsource, don’t care. The consumer only buys the result.  He has the attitude of “I don’t care what it takes for you to deliver a particular service to me. I want it. And within 30 seconds or less.”
  4. Intimacy: Customers hunger from other forms of connectedness. Feeling like a part, the community will be even more important as our needs are met more anonymously.
  5. Purpose: Credit unions should be able to support the customer’s need for and sense of purpose.

He discusses how these challenges lead to creepy expectations. Creepy expectations are expectations which initially arise from the need of intimacy, but gradually cross the line of being normal. Good Companies and analysts like Amazon look out for this creepiness edge.  The requirements of intimacy include anticipation needs, reverse grouping, E-coupons, and suggestion lists. The Creepy list includes geo-tracking, cookies, i-coupons, behavior modeling, and behavior manipulation. A good company is one which walks the edge between these two extremes. Example- Predictive shipping

By referring to his work in the second book, Jerk, he discusses that Cooperation is a survival strategy. We collaborate because together we can create better results than individually. The challenge with this is that cooperation requires submission.

The notion of social change is the currency of power. For social contracts to work, there must be a transfer of power, one to another; submission is exchanged for survival. In the contract Basis, distribution, application, and control of power is determined.

The Tool Trinity

For the longest of time, the basis of power has been knowledge, the distribution is memory, the application is storytelling and control is teaching.

The Dirt Trinity

From the tool trinity, we shifted to the dirt trinity, wherein the basis of power was land, whose distribution was through heredity, the application is through Edict, and control is violence.

The Analog Trinity

This originated 250  years ago wherein the basis of power was capital, whose distribution was in the form of bureaucracy, was applied through the process, and controlled through rules.

The Digital Trinity

This is the new realm we are now moving towards. In the digital trinity, the basis of power is information, it is distributed through mobility, applied through social media which creates social media based wealth, and is controlled through data analytics.

The shift from analog to digital trinity is the digital transformation. According to Christopher,  this is not technological change. Technology enables this change, but it is majorly a social and economic development.

Digital Transformation

It is enhancing the outcome of business operations through the effective use of information. It is more about innovation rather than improvement. He states that digital transformation is the reason that 51% of the companies in Fortune 500 list of 2000, fell off the list by 2015.

Currently, 1/5th of the global economy exists in countries whose central banks have a negative interest rate.

Christopher’s book, "Jerk" means an increasing rate of acceleration, an instantaneous change of force, which is highly destructive to systems which are not designed for it. Companies like Uber and Airbnb have created a massive disruption in the economy by creating new ways to deliver customer value. By merely using data and analytics through their business models, they can jerk their entire economy. Here are the reasons which are discussed by him.

The “Dirty Dozen” of being a Jerk. How jerks do what they do.

  1. Jerks use other people’s capital. Example- Uber, Airbnb
  2. Jerks replace capital with information. Jerks do not monetize data; they data-fi money. They generate information wealth. Example- Facebook.
  3. Jerks monetize context, not content. Example- Uber is a context engine.
  4. Jerks eliminate friction. Capitals in motion have no value. Information has no value at rest.
  5. Jerks replace value chains with value webs.
  6. Jerks invert economies of scale and scope.
  7. Jerks sell with and through, not to. Example: Friend and family suggestions in Amazon
  8. Jerks print their own money. Example- Loyalty points.
  9. Jerks flout the rules. They are led by analytics.
  10. Jerks hightail it. They try to make their products and services as efficient as possible. They use analytics to determine the unserved hightail and low tail which is missed through analog averageness.
  11. Jerks do, then learn. Not learn and do. A data analyst should be first able to see and experience the impact rather than waiting for research.
  12. Jerks look forward not backward. Analogs believe in reports  Data should be used to make better predictions of the future.

Credit unions can gain massive insights from these principles. For example - Loyalty reward system is a solution for focusing on context rather than content. Predictive suggestions and selling through personal interactions and relationships is an example of selling with and through, and not to. They can use these principles by adopting them in their daily functions.

Action should be at the speed of insight. What can be done about Jerks?

  1. Use your capital to DIE: Discover, Infiltrate, and Exploit. If you have capital in your business, you should use it to innovate not within the box, but you should be able to switch boxes and innovate.
  2. Rewrite your books: If you do not value speed and time, if your ROI analysis does not cover the changing context, you will not be able to prepare for it.  You can change your organization only through metrics and rewards. It is important to hire the right people.
  3. Regulatory and legal backlash. For example - Fanduel not only did they stick to elective compliance but also gained legislation by plebiscite.
  4. Annihilate your process: Focus on innovation rather than improvement. Christopher quotes his book Data Crush, and suggests to  “ Cut every cycle time in half, every 12 months.”
  5. Fail fast: Fail small and fail fast. This leads to practical analysis and innovation.
  6. Seek discomfort: Digital transformation should scare you, and you should be able to embrace the changes.
  7. Analogs can go digital: They can service hightail, go through gamification, diseconomies of scale and scope, put customers to work, owing to intimacy and purpose, do, then learn attitude and fail fast approach.

An interesting question that Christopher discusses towards the end of this session is whether loans are products or experiences?

The approach used by First Tech credit union of “life stage” strategy is a right approach.         

But Christoph highlights that not all lives are lived the same. Boomers and Gen-X are object-oriented, and millennials and Gen Z are experience oriented. This highlights the importance of context.

In credit unions, there is an increasing requirement to solve customer’s needs for intimacy and purpose in the face of digital transformation and its disruption.


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