Most banks do not have an AI problem. They have a thinking problem.
In this week’s video, Roxanne Emmerich challenges bank executives to move beyond first-order thinking—the easy, obvious, defendable answer that rarely fixes the real issue. “We need sales, so let’s get sales training.” “We need deposits, so let’s hire a new head of retail.” Those are pedestrian solutions for a complex, fast-moving environment.
The banks that win the next era will be led by executives who force second-order thinking into the organization before AI accelerates bad assumptions, scattered activity, and expensive misfires.
In this video, you’ll discover:
If your team is resisting change, waiting for old roles to return, or chasing activity instead of strategy, this is the wake-up call. The future will not reward pedestrian thinking.
Watch now.
I have a book that I love that I read a couple times last year, and I continue to reference it often. It’s called Intelligent Thinking, which sounds like a pretty good thing to do. And on pages fifty-eight and fifty-nine, there’s the concept of first-order thinking and second-order thinking. And I think it’s important to understand as an executive to make sure that you are using the right thinking and make sure that you’re evolving your people to the right thinking.
Here’s how he defines it. First-order thinkers look for things that are simple, easy, defendable. But, unfortunately, the whole ecosystem we live in is not that simple. Rather, it’s a complex permutation and combination of various factors and their interaction at any given point in time.
Examples of that would be, “We need sales. Let’s get sales training.”
“We need to improve deposits. Let’s get a new head of retail.” First-order thinking, does it ever work?
Maybe one percent of the time. Second-order thinkers go way beyond the simple and look outside, extending to different parameters.
They go to second, third, and subsequent levels of probable consequences and think deeper.
Second-order thinkers think in terms of interactions amongst various factors, with attention to time and system-related aspects. They ask questions like, “What different factors or parameters are involved in this problem, and what’s the interaction? What could be different possible consequences of taking a particular action and analyzing each consequence? How do we leverage to speed up the solutions?”
Charlie Munger says it best when he talks about second-level thinking. He says, “It’s not supposed to be easy. Anyone who finds it easy is stupid.”
Gotta love Charlie Munger. Right? I mean, the guy was one of the most brilliant business minds of our time. And here’s why I think this is an important concept for bank executives to be thinking of right now. In the world of AI, if you don’t have a second order of thinking guiding the direction of things, you will have a whole lot of activity that you find to be going in the wrong direction because everybody came up with their first-order thinking approach, and now suddenly it’s not working.
We have a crisis in the industry right now, and we have a small window of time to elevate the thinking to the next level of thinking. You don’t have a lot of time to figure this out. You gotta get moving here. So it’s not about training programs because training is teaching people what to do. It’s kind of like how to be a monkey. Right?
Education is teaching people how to be, how to think at a deeper level, how to go down deep, and to get rid of the pedestrian solutions and go for deeper-level thinking that actually solves the problems and, more importantly, takes advantage of the opportunities.
Stick with me as we talk about how you are going to take your team and get them ready for this new world of AI while they’re resisting and fighting and saying, “No way, not me. I want my old job,” when you know you cannot guarantee their old job because it’s just not going to continue to exist. Welcome to the world of second-order thinking.
A lot of bad things happen around acquisitions. If you’re being acquired, it’s rarely pretty. And if you’re the one acquiring, the Wharton School of Business says your chance of failure is greater than 83 percent. And even if you don’t go down in flames in the opening round, the real heartaches continue for two years after the acquisition as two dark forces are inevitably unleashed:
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Most banks are screaming for loan growth. But they’re not going to get it.
They think the only way to achieve that growth is to do traditional sales training.
Never, in the history of time has that ever worked. No really…never.
Can you give them what they need to succeed? Not unless you’ve created a franchisable system to help them duplicate your success.
Here are the seven crucial elements of building a franchisable system in your own bank:
The coming bank consolidation isn’t a surprise. It’s been predicted for years. In fact, the next 18 months are destined to be a major “shake out” period when weak banks will be acquired or closed—and banks that are in a position to capture the best customers in town will become stronger and more profitable.
Culture asks, “Will your people leap over tall buildings in a single bound to make sure your client is successful in their business or personal financial goals?” “Will you go beyond bank “product” to create Unique Selling Propositions that rock their world and cause hundreds of thousands of dollars of impact for them? And will your people have fun doing it so that your system is sustainable?
Ready to stop wasting your marketing dollars and grow your profits and safety with a predictable model of organic growth of top and bottom lines?
Thousands of bank executives are waking up to 2013 saying, “SALES training! Of course! It’s SALES training we need.”
Yeah, well sometimes the first thing that pops into our heads isn’t a keeper. Sales training is fine, but it’s NOT what you need to solve your problem and create a sustainable solution.