Determined to build strength amongst employees Davis requires that every employee begin their shift with a “motivational moment” (Tweel, 2008, p. 402). McDaniel recalls how strange participating in this ritual felt at first, but now admits that it has indeed brought her store employees closer together (McDaniel, 2011). Davis believes so strongly in the power of this ritual that failing to participate in the exercise is considered grounds for termination (Tweel, 2008, p. 402).
It is through ensuring employees understand the corporate culture and activities such as the “motivational moment” that Davis has managed to build goodwill throughout the company and in turn increase the level of social capital held by Umpqua.
Ethics and Values
When Umpqua acquired Humboldt Bank they went above and beyond what would expected of any company to offset the negative effects of the merger that would be felt by the local community. They knew that the merger would result in a significant reduction in workforce and rather than simply sending these displaced workers off to the unemployment line Umpqua created a career center to serve these individuals, gave them money to purchase clothing for interviews, and encouraged them to apply for new positions that resulted from the merger (Tweel, 2008, p. 405). McDaniel saw similar care taken when the bank she previously worked for merged with Umpqua. All of the employees were immediately offered jobs at their previous pay (McDaniel, 2011) which likely went a long way to helping build the ties between employee and employer.
This commitment to the community is again shown in Umpqua’s volunteer policies and their dogged determination to get their employees involved in the community. Employees may volunteer their time at any youth and community development organization or in neighborhood schools. Ensuring youth are financially literate is also an important focus as Umpqua provides financial education to school-aged children both within their branch and at local schools. They also invite other businesses to participate in their volunteering programs and encourage them to create their own. (Umpqua)
This isn’t all simply written in a book that is forwarded onto managers to teach their crew, but something that is lived by all who exist within the company as a whole. Everyone plays a part in helping to breed this community nurturing culture, including Davis. Scoffing at executives who hide in their offices Davis tries to make himself as accessible as possible (Tweel, 2008, p. 403). He visits each area twice a year and according to McDaniel the visit is a tradition (McDaniel, 2011). In addition to the regular visits each store also contains a phone that gives anyone who dials “8” access to Davis (Al-Ghawas, 2010).
Employee support and recognition are also an integral part of life at Umpqua. Beyond empowering employees to do the right thing and encouraging them to make a difference in their community, Umpqua seeks to make sure that every employee knows where they stand and how they can improve. Communication is imperative amongst employees and even Davis visits stores to personally encourage employees and give them feedback. Recognition is also important and each year Umpqua holds the “Umpqua Oscars” and the “Celebration of Excellence”. The Celebration of Excellence focuses solely on the efforts of those in the front lines. (Tweel, 2008, p. 403)
Innovation and Change
Davis felt that in order for Umpqua to stand above other banks, much less survive, the brand must be differentiated from every other bank on the market. He didn’t want Umpqua to follow standard procedure and simply end up trying to coax potential customers into opening accounts and using their services based solely on typical banking standards such as location and rates. Instead, Davis took a look at those businesses outside of the banking arena that were successful, almost to the point of a cult following, and considered what he could take away from businesses like Starbucks, Nordstrom, and Ritz-Carlton Hotels (Tweel, 2008, p. 399). This resulted in his decision to run Umpqua banks like retail stores.
This change was a huge departure from what consumers have come to expect when they step into a bank. Building an inviting retail atmosphere that simply encourages customers to stop by and hang out may seem a bit strange to customers, and even new employees, at first, but managers like McDaniel do see customers taking advantage of the services offered at Umpqua that aren’t necessarily banking related (McDaniel, 2011). However, Umpqua feels that those who take advantage of these non-banking services are more likely to make the eventual choice to bank with them.
Like any retail establishment Davis also understands the value of top-notch customer service and realized that achieving this meant he had to change how employees work as well. Rather than having designated personnel to manage specialty items, such as mortgages and business banking, every employee is given the ability to play those roles. This removes the problem of specialized personnel having nothing to do while tellers frantically work to get through customers wanting to make deposits while also ensuring there is always someone available who can help with these special needs. This, according to Davis, improves efficiency and decreases wait time, while making it easy for customers to know where they need to go for information. (Tweel, 2008, pp. 400-401)
Of course, any innovative concept or idea that is implemented will become passé or commonplace if it is not updated regularly to keep it fresh and new. Umpqua has teamed-up with the Ritz-Carlton which provides training to some Umpqua employees that is aimed at teaching them exceptional customer service using tactics they may not have considered on their own (Umpqua Holdings Financial Corporation). Umpqua also houses a Creative Strategies department whose main focus is creating innovative ways to keep Umpqua unique and in-line with their vision as a company (Drea, 2008).
Executive Vice President of Creative Strategies, Lani Hayward, notes that each Umpqua branch is built to be a community center, where neighbors can gather, lounge, read the newspaper, and do other productive activities. While taking advantage of these non-banking services Hayward feels these visitors are more likely to become Umpqua customers. (Drea, 2008)
One of the more interesting innovations is something Umpqua refers to as the Innovation Lab. This isn’t a place where Umpqua does the innovating, but rather invites customers to do so. Presented as a website the lab seeks to open up doors to the community, sharing with them the opportunities available to them in each store. These opportunities take advantage of all of the elements within the store that educate, entertain, and inspire customers. The site includes a schedule of classes Umpqua offers that cover a broad range of topics. Community members are not only encouraged to partake in these classes, but also to come in and teach classes of their own on topics that may or may not have anything to do with banking at all. (Umpqua) What does Umpqua get from this? Beyond increased visitors to their store and deeper integration into the community, they also get a unique view of what is important or interesting to those in the community which can translate into innovative opportunities to serve these communities better.
Keeping Ahead of the Curve
In 2010 US Banker published an article offering banks ways to optimize each branch to be more productive and profitable. Interestingly, nearly all of these ideas seem to have been embraced by Umpqua long ago. (Paula, 2010)
Build smaller and design smarter – Umpqua stores aren’t the 5,000 square foot monsters some banks had turned to. Instead, Umpqua maintains most of its stores at about 1,500 square feet (Paula, 2010). These stores are just big enough to encompass all of the things they want to offer, but still small enough to integrate into the community. Their designs further this desire to integrate by creating a community centered and welcoming atmosphere going as far as to make sure the kids and pets waiting on their busy parents even have something to keep them busy and happy (McDaniel, 2011).
Use technology – The use of technology and Umpqua’s understanding of its importance are clear throughout each store. They seem to understand that technology is important on both sides of the equation as well by opening up computer stations and Wi-Fi access for customers. Technology is also used to create community boards and interactive polls that help to further integrate Umpqua into each local community (McDaniel, 2011).
Cross-train employees – As mentioned before, every associate in every store location has the ability to do all of the jobs a teller or a more specialized banker might perform at a more traditional bank.
Staying Relevant
With most banking functions now available online the need to actually walk into a branch to conduct banking business has decreased significantly. Hayward explains that banks must give customers a reason to actually come into the bank and, more importantly, want to come into the bank in order to stay relevant. This, according to Hayward, is why community integration is such a vital part of Umpqua’s strategy. (Bhatt, 2010) Umpqua is counting on drawing in customers by creating a unique banking and social experience to keep the relevance of branch offices.
The question becomes whether or not individuals taking advantage of the non-banking services will make the move to Umpqua or simply enjoy the free services being provided to them. This is where Umpqua is counting on their exceptional customer service and more industry standard perks, such as good rates and useful services, to seal the deal. While this type of information doesn’t seem to be force-fed to visitors and customers, it is evident throughout any store location and on their website. Just like with any bank there are brochures offering information and associates waiting to help you with any questions you might have. Add to that financial literacy classes and other ways of educating the public and it’s quite possible that Umpqua may turn visitors into customers.
However, there are two factors that may derail Umpqua’s efforts to gain customers. First, community residents may find it odd to go hang out at a bank no matter what activities are offered therein. Those who lack internet at home or are looking for a quick, free Wi-Fi hook-up may more naturally head for the city library than seek out an Umpqua store. Second, changing banks isn’t something most consumers consider easy and thus do so very seldom. According to J.D. Power and Associates most banking customers change banks only when life circumstances, such as a move, dictate that they must. However, they also note that with the state of the economy, loyalty to banks is eroding and customers are more willing to change banks if they feel the bank offers greater levels of stability and improved levels of service. (Ranii, 2011) If Umpqua can in fact fill their lobby with potential customers taking advantage of their non-banking services and convince these visitors that their bank is a stable and integral part of the community and make changing banks simple, they may in fact manage to significantly improve their numbers.
Works Cited
Al-Ghawas, L. (2010, November 10). #28 Case Study: Umpqua Bank. Retrieved May 2, 2011, from Glorious Bites: http://gloriousbites.wordpress.com/2010/11/14/case-study-umpqua-bank/
Bhatt, S. (2010, December 10). Umpqua Banks On Not Feeling Like a Bank . Retrieved May 9, 2010, from The Seattle Times: http://seattletimes.nwsource.com/html/businesstechnology/2013620174_umpqua08.html
Drea. (2008, June 25). Fortune 100 Company Interview: Umpqua Bank Serves Up a Lifestyle. Retrieved May 2, 2011, from Business Pundit: http://www.businesspundit.com/fortune-100-company-interview-umpqua-bank-serves-up-a-lifestyle/
McDaniel, S. (2011, May 3). (G. Peck, & C. Allen, Interviewers)
Paula, M. D. (2010, May). 5 Ways to Optimize the Branch. Retrieved 10 2010, May, from WSFS Bank: http://www.wsfsbank.com/uploadedFiles/US%20Banker%205-ways-to-optimi.pdf
Ranii, D. (2011, March 2). Bank customers are willing to switch. Retrieved May 13, 2011, from NewsObserver.com: http://www.newsobserver.com/2011/03/02/1024727/bank-customers-are-willing-to.html
Tweel, C. A. (2008, February 20). Leading For Growth: Assessing the Growth Impact of Umpqua Bank's "cultural makeover". Retrieved May 2, 2011, from UNC School of Law: http://www.law.unc.edu/documents/journals/articles/121.pdf
Umpqua. (n.d.). Connect Volunteer Network. Retrieved May 2, 2011, from Umpqua LIFE: http://www.umpquabank.com/1.0/pages/ulConnect.aspx?prodCAT=ulConnect
Umpqua Holdings Financial Corporation. (n.d.). Retrieved May 2, 2011, from The Ritz Carlton: http://corporate.ritzcarlton.com/en/LeadershipCenter/Studies/UmpquaHoldingsCorporation.htm
Umpqua. (n.d.). The Umpqua Bank Innovation Lab. Retrieved May 9, 2011, from The Umpqua Bank Innovation Lab: http://www.umpqualab.com/
