Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways - Hardcover

Bill Taylor is a cofounder of Fast Company, author of Practically Radical, and coauthor of Mavericks at Work. He has published essays and interviews with CEOs in the Harvard Business Review, and blogs regularly for HBR. He has written management columns for the Sunday Business section of the New York Times and for the Guardian. A graduate of Princeton and the MIT Sloan School of Management, he lives in Wellesley, Massachusetts, with his wife and two daughters.

Chapter 1

What's Your Values Proposition?

"Competition Is Not the Same as Choice"

It's a pleasant, active, fairly unremarkable Friday in Milton Keynes, a pleasant, active, fairly unremarkable city about fifty miles northwest of London, equidistant from Cambridge and Oxford. Milton Keynes offers little of the history, pageantry, and color of these legendary destinations. It is an unassuming place of office buildings, shopping malls, and residential developments-a so-called "new city" created in the 1960s to showcase the power of commonsense urban policies and business-friendly economic strategies. Today, Milton Keynes boasts solid growth and low unemployment, even as it lacks a sense of style. Francis Tibbalds, the late British architect and urban planner, and the author of an influential book called Making People-Friendly Towns, was impressed with the substance of what the city had achieved, but dismissed its personality as "bland, rigid, sterile, and totally boring." In a paper titled "Milton Keynes-Who Forgot the Urban Design?" Tibbalds lamented that the city had missed the opportunity "to become one of the world's greatest examples of new place-making" and had become instead "just another collection of good, bad, and indifferent buildings."

All of which makes what's happening in the Oakgrove district so out of character. Crowds of curious residents drive, walk, and otherwise gather around a noisy, energetic sidewalk scene. A DJ is spinning tunes and swaying to the thumping beat of the latest dance music. A clown on stilts is delighting kids and high-fiving anyone tall enough to reach her hand. There's popcorn and ice cream and face painting. There are also several prominent politicians, including the mayor of Milton Keynes, sporting his ornate chain of office, a British ceremonial artifact that extends back to the Middle Ages, and the local member of Parliament, a Tory who beat the mayor in the last election. (The former rivals seem to get along fine.) But perhaps the most notable celebrity is a twelve-year-old Yorkshire terrier named Sir Duffield, who passersby recognize, fawn over, and ask to pet.

Does this energetic gathering herald the opening of a big show from Cirque du Soleil? Or the local premiere of a Hollywood blockbuster? Actually, believe it or not, it's the first day of a two-day festival celebrating the arrival of a new bank-a bank that is taking Milton Keynes, and England as a whole, by storm. Metro Bank opened its first retail location, in central London's Holborn neighborhood, back in July 2010. The company has been on a tear ever since, opening locations in London's busiest areas (Earls Court, Kensington, the City of London financial district), as well as Cambridge to the northeast, Brighton to the south, and Reading to the west. This grand opening is for Metro's second branch in Milton Keynes, and its twenty-seventh in England. The bank's near-term goal is to open 200 locations, sign up 1 million customers, recruit 5,000 employees, and attract $40 billion in deposits by 2020-an audacious plan that has attracted more than $1.4 billion in capital from some of the world's best-known investors and created the buzziest financial-services brand in the United Kingdom.

Metro Bank, it should be understood, is not just another entrepreneurial growth story. It is quite literally unlike any financial institution England has seen before. This location, like all of Metro's retail branches, 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. Even Sir Duffield sports a fetching Metro Bank dog scarf.

"We didn't come here to make a better bank branch," declares Shirley Hill, the wife of 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."

"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."

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.)

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. In October 2015, when it opened its second drive-through window, this time in Southall, thirty minutes due east of Slough, it created a similar sense of fascination.

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. But Commerce didn't rely on cutting-edge technology, never-seen-before business models, or other forms of radical business disruption. Instead, in a bland, dull, colorless field, it created a banking experience around what he calls "retailtainment"-fun, lighthearted, surprising gestures that encouraged customers to visit the branches, spend time there with the kids, and get to know the staffers-rather than treat their bank like the electric utility or the cable company, or, in recent years, to do as many transactions as possible online. Sure, Hill and his American colleagues used to joke that they operated on the "lunatic fringe" of the financial-services industry, that their business practices and culture were so unlike any other bank that their competitors would not dare copy them, even when their results showed how powerful and effective they were. But they were fueled as much by common sense and old-fashioned values as they were by new-wave thinking and futuristic software.

Well, the "lunatic fringe" now extends across the Atlantic. Hill exported the most advanced and cosmopolitan version of the Commerce model, which he and his colleagues rolled out in New York City, first to London and now to cities and towns within a two-hour radius of the British capital. It's hard to overstate the sense of movement and momentum Metro has unleashed. The notoriously skeptical British press has lionized Hill as a breath of fresh air in an industry choking on bad practices and lousy service. When Mike Bird, a reporter covering European markets and financial-services companies, visited Metro's Holborn location to see for himself what the fuss was about, he wrote an article titled "I Was So Impressed with This New British Bank That I Opened an Account." Hill spends a big chunk of his time giving speeches to business leaders eager to learn from his unconventional strategies and brash rules for success. Inexplicably, his canine sidekick, Sir Duffield, has attracted nearly as much coverage as the bank's founder. "Duffy may be the most famous dog since Rin Tin Tin," his proud owner quips as yet another fan asks to pet him. (Hill is only half joking; Sir Duffield has his own business card and Twitter account, along with a stack of newspaper clippings attesting to his celebrity.)

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?"

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 frontline 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 Farmer, 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."

In short, in less than six years, Metro Bank has become an undeniable passion brand in a field in desperate need of positive passion. "People here hate their banks," Hill told me in Milton Keynes as he watched the crowd of visitors sizing up his newest location. "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."

"Kill Routine Before It Kills You" -Why Average Is Over

The first rule of strategy is that how you think shapes how you compete. Back in the mid-1980s, a McKinsey & Company consultant by the name of Michael J. Lanning coined a term that still shapes how businesspeople think about competition and markets, and how they evaluate their positioning versus rivals. The true logic of success, Lanning argued, did not just revolve around R&D and the most advanced technology, or supply chains and the most efficient operations-stuff that h...