How to Think Outside the Box


It’s a popular exhortation — “think outside the box.” But finding a solution to a problem by looking in a different direction often is easier said than done.
Perhaps that’s why those who make that leap are so admired. Take Joseph Gallieni, a French general during the First World War. In 1914, the Germans were pressing close to Paris in the First Battle of the Marne, and more French troops were badly needed at the front. Railways were clogged and other transport non-existent –- until Gallieni thought of the Paris taxis. Over a couple of days, hundreds of elegant taxis made numerous trips to the battleground, transporting some 4,000 soldiers. Paris was saved.
Thinking outside the box won’t always involve something so dramatic or historic. But it can make your operation more responsive and more successful. And it can help you find ways to stop concentrating on why something can’t be done and instead figure out how it can be accomplished.
In today’s complicated world, the best way to do this often is in a group; there’s a reason that “two heads are better than one” became a popular adage. In the business world, that group usually is the board of directors. Privately held company without a board? Consider setting up an advisory board of either outside specialists or staff members.
Whether the group comprises directors or advisors, experts advise that they spend 50 percent to 75 percent of each meeting on strategy and trends. That allows board members to change how they think and makes it more likely they’ll see innovative ways to address trends.
You might also hold an annual retreat with outside speakers, or do so two to three times a year. Unlike staff members, outsiders have permission to challenge you and your advisors without offending them.
Speakers from within the industry can talk about what one expert calls “scary things that innovators are doing.” But you should also look outside the industry, at what companies from big international banks to technology giants such as Google are doing. That can generate paradigm-shifting thoughts.
Secondarily, you need to address your tactics. Here, questions can facilitate thinking outside the box. Some you might pose include:
“If money were no object, what would you do to serve customers?”
“If younger customers members could redesign your operation, what would they do?”
Answering these what-ifs give you and your advisors permission to think outside the box, because you’re not actually making decisions.
Another approach would be for all members of your advisory board to read a book and discuss it. “What Would Google Do?” by Jeff Jarvis presents modern-day rules to manage and live by.
“A Whack on the Side of the Head” by Roger van Oech is another possibility. The author has turned it into a deck of cards, he adds, that ask such questions as, “How would a child solve this problem?” or issue orders such as “Slay this sacred cow.” These are ways to change your mid-set.
Questions generally work well to help you open up to new ways of thinking. A good one is what you would do differently if you were able to start your business all over again.
Would you have it focus more on technology? On customer loyalty? Or hire A-players only, even if that slowed staff growth?
Then ask what you have learned that is useful for the future. Take a good look at your mission statement, and try to tease out three, four or five driving elements, and ask further questions about each one.
This analysis is needed because there is no one-size-fits-all approach for the industry as a whole; each operation is unique.
It all leads to the critical question: What do you want your company to be? What matters most?
That answer must be scutinized, too. For example, if you want your company to be high in public perception, what does that mean to you?
Avoid questions that focus on strengths, weaknesses, opportunities and threats. You may address those issues at another time, but don’t force yourself into the traditional four quadrants.
The series of questions and answers helps you and your advisors identify what you want accomplished in big-picture results. That could be to go deeper into areas where you excel to garner more profits, for example. Once that’s determined, it’s time to ask, “How?”
When a plan is formulated, the board of advisors should ask a final question: “Does this plan moving forward seem reasonable and sound?”
No plan will mature instantly. It takes about three years to move a company to a new track, and an operating plan is needed for each of those years.
Most important: while a board of directors or advisors may determine the why or what, management is responsible for the how.

‘Creativity of Thought’

Today, with changes in the financial environment coming fast and furious, only the fittest in the industry will survive, and it will help to view things differently. Too many executives still keep clinging to “We’ve always done it this way.”
To survive, you must be market-driven. And that can’t be done in a few hours or days. There’s no magic bullet.
Start with a rigorous market analysis. It doesn’t matter what other lenders or check cashers do. What matters is the experience customers have become used to from all types of merchants and service providers.
To produce that kind of experience, you need to establish a marketplace of ideas and opinions, engaging staff members down to the lowest level. A particularly effective way to do that is with a research team put together from within your company.
The team must include people from all levels in the company, not just those with titles. What’s most important is that there are no shrinking violets –- all staffers must be willing and able to speak up, even if someone above them says their idea won’t work.
The team’s job is to formulate strategy to answer the big question: How do we stay relevant?
At the end, the research team culls down to the most important ideas that could drive the company into the future, then develops a whole business plan based on critical success factors, risks and potential threats. They identify four or five key strategic ideas.
At a retreat, those four or five ideas are put to teams, Oliver says. Each team debates the ideas; other groups try to shout them down.
Everyone is forced to get very involved. The goal is customer experience management.
It’s a tough process. Everyone would love for there to be an easy answer, but there isn’t. It’s a lot of hard work, facing the good, the bad and the ugly about your company.
But doing it means survival and growth in an equally tough environment.

Federal Bill Would Set Up New Loan Companies


Alternative financial institutions may apply for federal charters if a bi-partisan bill gains momentum.
Reps. Joe Baca, a California Democrat, and Blaine Luetkemeyer, a Missouri Republican, are sponsoring HR 6139, which would “create a Federal charter for National Consumer Credit Corporations, and for other purposes.” The bill, also known as “The Consumer Credit Access, Innovation and Modernization Act” was introduced on July 18.
Essentially, the bill would grant federal charters to alternative financial institutions.
Industry reaction to the bill has been mixed. The Online Lenders Alliance supports the measure, while the Community Financial Services Association and the Financial Service Centers of America are staying neutral.
“A federal charter, as opposed to the current conflicting state regulatory schemes, will establish one clear set of rules for lenders to follow. This will lead to the creation of innovative financial products for consumers demanding them,” says Lisa McGreevy, OLA president and CEO.
“CFSA, the storefront payday lenders association, does not advocate for this legislation since it does not include our products,” CFSA says in a statement. “Our member companies have long operated in a highly regulated environment — at both the state and federal level. Such regulation is effective, balancing credit availability and consumer protection. While we generally support innovative efforts like this to extend credit options to more hardworking Americans, this bill does not include the payday loan product offered by CFSA members and we are not working for its passage.”
“FiSCA is officially neutral on H.R. 6139, the Consumer Credit Access, Innovation, and Modernization Act,” says William Sellery, executive director of FiSCA. “We have not and are unlikely to be taking a position on this legislation.”
A CFSA spokesperson noted that the bill doesn’t cover institutions that offer loans for less than 30 days. Most payday loans are for a two-week period.

Backed by Cash America

A strong supporter of the legislation is Cash America, which believes HR 6139 will level the online playing field.
“On the Internet, you have a tremendous amount of competition that does not play by the rules that we do,” Mary Jackson, a senior vice president at Cash America, says in a published report, adding that regulations on the state level are “a competitive noose.”
The Ft. Worth, Texas-based company also has been ramping up its contributions to its political action committee. According to a published report, Cash America’s PAC is on pace to double its annual campaign contributions from the $200,000 it gave in 2007.
Even more interesting is that the proposed regulator of the credit corporations believes the bill would do more harm than good.
Concerns were expressed at a July 24 hearing on the legislation by Grovetta Gardineer, deputy comptroller for compliance policy office of the Comptroller of the Currency.

The Ownership Model Has Changed, Too


In The Model Has Changed, I focused on the need to adjust to the shifting sands of the industry’s business and economic models. There was such a great response to that article that I proposed and chaired workshops under the same name at Financial Service Centers of America, and again at the Financial Service Centers of New York annual meeting.
Those workshops ended up morphing into a much broader discussion, dealing not only with the business and economic models, but delving deeply into the changing ownership model as well.
Through that came my recognition that unless you adapt to changes in all three models — business, economic and ownership — you are sitting on a stool that is about to tip over.
This article provides some of the highlights and insights of the ownership model discussions from those workshops.
What exactly is the “changing ownership model?” Well, it starts with a state of mind and ends with a modified behavior pattern that is built for success. The problem is, it ain’t easy. In fact, it requires the most effort of all three models.
You have to be ready to deal with issues such as self-evaluation, behavioral changes, personal life changes, lifestyle shifts, changes in daily living, revisiting business relationships and plans, achieving personal balance, attitude improvement, honesty and directness between business partners, and a general adjustment to the “New Normal,” to name a few.

The New Normal

Except for a select few of us, our grandparents did not grow up driving a Cadillac (or whatever the American equivalent of a Mercedes or BMW was at the time).
Being older than many of you, my grandparents grew up in eastern Europe in the 1880s, and my parents grew up in New York during The Great Depression of the 1930s — riding the subway.
In this day of the “New Normal,” their childhood experiences and the life lessons they taught at home turned out to be a real advantage for me. Those lessons made it easier for me to achieve a balance in my life between what I want and what I need.
Whether you were raised by Depression Era parents or not, you have no choice but to adjust to the New Normal.
The New Normal includes dialing back ostentatious consumption, and instituting a process of making choices — conscious decisions — even in circumstances where your ability to bear the monetary cost of that decision is not an issue.
For help in finding your New Normal, I highly recommend reading The Millionaire Next Door because the New Normal will be around for the foreseeable future.

A Small Word: “No”

Even if your first car was a BMW, you need to come to grips with today’s reality. Here’s the first lesson: Learn to say “no.” Sure, “yes” is almost always easier at the moment — until the bill arrives.
And that bill is not always paid in dollars. Sometimes, it is the loss of your business time or your free time. Sometimes, it involves loss of morals, principles and reputation. Sometimes, you pay in stress and sleepless nights. So I suggest that you get comfortable with the word “no.”
That’s not just saying “no” to your kids or your spouse; it’s “no” to yourself and your wants; “no” to questionable business practices, “no” to demanding more from your business than it can give, “no” to checks you know are way too risky, “no” to long lunches at expensive restaurants, and “no” to the lifestyle, to name a few.
How can you say “no” to your kid’s “need” for a new iPad? The “need” for a new car before the lease expires? The “need” for that extra vacation that you just have to take or you’ll go crazy? The “need” for dinner out three nights a week?
Practice in the mirror: “No,” “no,” “no.”
Aside from the obvious — managing some deflated expectations — what you will get back is empowerment, freedom and a sudden flexibility.

And “Good Morning”

Your employees are a direct reflection of you. If you come in angry, aggressive, or negative, that is exactly how your employees will treat your customers. If you walk through the door positive and upbeat, regardless of the challenges you expect, they will be positive and upbeat.
If you come in expecting results without a business plan (and involving your employees in implementing that plan), you will be disappointed.
In short, you need to start every day with a positive outlook, with a plan for the day and for the business, accept and adjust to the day’s events, and stop being surprised by reality and using it as an excuse for a bad attitude and lack of planning.

Resetting Partnerships

Time and again, I am asked by owners, “What’s wrong with my business?” All too often it is a question of simple math.
In multi-generational operations, the math can get even more fuzzy. For example, take Dad, who always drew $300k from the business each year, plus perks. Dad brings in his older son (Son No. 1) to run the business. Dad says to Son No. 1, “You can pay yourself $125k.” Dad also asks his younger son (Son No. 2) to come in to the business. Son No. 2 doesn’t much like working every day, but still wants $75k to hang around.
With all of the business and economic changes of the past few years, the business only generates, at most, $400k. The problem is, dad still wants his $300k (plus perks)! (Hint: $300k + $125k + $75k + $Perks = $500k + $Perks, which is way more than $400k)
You know where this is going. Playing cash flow games, drawing on credit lines, inadequate liquidity and net worth, loss of bank and vendor relationships and worse. Math like this is delusional and unsustainable.
If all of them (Dad, Son No. 1 and Son No. 2) are to stay in the business (and perhaps they cannot), the partnership must be reset.
That means honest and direct conversation and analysis. What the business can and cannot afford. What each party’s effort needs to be, what effort each party is willing to commit, and what that effort is worth in the marketplace. What money needs to be left in the business to maintain adequate net worth, provide working capital, support banking and vendor relationships, and provide an operational safety net.
The same analysis applies even if you are a one-person-owned operation.

Happiness Leads to Success

Most people believe that the key to personal happiness is business success. They live and work for years in a perpetual state of unhappiness on the theory that some day they will be successful, and therefore suddenly become happy. That can happen — in the movies.
In the real world, especially when you own your own business, it works the other way. The key to business success is personal happiness. Living a life in balance and accepting the reality of how things are while embracing change in order to move forward.
If you work on improving your personal happiness every day, your family, business partners, employees and customers will sense it, your energy, focus and ability to manage and cope will dramatically increase, and the doors to business success will open.

Richard Kelsky is president of TellerMetrix, a provider of POS transaction, compliance, interface, electronic deposit and marketing software to check cashers, payday lenders and retail banks. He is also a New York and Connecticut Bar member, a Polytechnic Institute of NYU and NY Law School grad, a Certified Anti-Money Laundering Specialist and a frequent lecturer on business, legal, compliance, and technology issues. He can be reached at