‘It’s not rocket science’ people say when something is easy to do or understand. In Simplicity for Success in Business, Peter Eckart, rocket scientist who turned management consultant, writes that people generally prefer simplicity: when you buy a new cell phone, car or any other device, you don’t want to read a lengthy manual before you can use the thing.
It’s not different in business, his argument goes, and businesses that simplify life for their consumers will have an advantage over those that don’t.
Capitec has seen this first hand. Ranked the world’s best bank in 2018 by the respected Lafferty Group’s Global Bank Quality benchmarking study, they attribute their success to mastering simplicity. ‘When you do something in a simple and transparent manner, the client understands it and has a measure of control,’ CEO and co-founder Gerrie Fourie tells me.
But it doesn’t mean achieving simplicity is easy. Eckart paraphrases Albert Einstein when he writes that ‘simplicity is 1% talent and 99% hard work’. Simply put, making things simple is hard work.
To be successful, you must differentiate your product from the market, and if it is not differentiated, you have to perform 20–30% better than your competitors, Gerrie explains. This requires a strong culture of innovation and thinking differently.
Simplicity strategy
A strategy based on simplicity is easy to define, but its success sits in the execution. Yet if everyone in the organisation understands it, it becomes easy to implement. So, in the banking world, Gerrie says, when a client walks into a bank, they expect customer service. Getting customers to walk out satisfied with the service, is the ultimate test of whether the strategy is working.
‘We have about 10 000 consultants, and if we design a product we must ensure that they all understand it exactly the same way. If there’s variation in their understanding, it causes confusion – and ultimately client dissatisfaction. We therefore strive to invest not only in simplicity of design but also in how we train our people to understand both our strategy and our systems.
‘The way we set up our branches is such that both the client and the consultant see the same screen; as a result, there’s no room for confusion.’
The Capitec model treats all customers exactly the same; it doesn’t matter whether you’re rich or poor. So everyone gets a black card (no different colours for different income levels, as at some other banks) and the fee structure is the same for all customers. The service is also similar because products are uniform, making it easy for consultants to understand and sell their offerings.
Gerrie’s counsel to any upcoming professional is to understand what drives you. If you want to play the guitar, then strum those strings on a grand scale!
‘When I was 24, I asked my CEO Dave Marlow for advice,’ he reminisces. ‘He said that a career has three stages. When you first go into a job, you are trying to understand the job, making certain you know the A to Z of it. The next phase is to put your stamp of approval on it, making the job your own. In the third stage, you progress to developing a colleague and then move on. The last stage is probably the most challenging because people underestimate it, but it is actually the mark of true leadership.’
Ask until you understand
Gerrie also recommends not being afraid to question things and to ask when you don’t understand something. And to ask again, if it remains unclear. ‘Keep at it until you understand how everything fits together. People very quickly think they know what’s happening, even when they don’t really,’ he says. ‘At a leadership level, you must explain to people why they have to do something because when they understand why things are done the way they are, people will also know what is expected of them.’
Banking will likely change in the future to encompass a full range of financial services, reckons Gerrie. What will be critical, is the availability of data and how you optimise its use for value add and customer satisfaction.
Banks will also have to think about how cryptocurrency and blockchain technology are going to influence the way they do business in the future. According to Gerrie, institutions that think of the end-to-end client experience, instead of the experience a client derives from a single product will come out at the top.
The Capitec group recently purchased Mercantile Bank and have also obtained an insurance license. These two developments offer opportunities to expand the business. I ask Gerrie whether acquiring Mercantile, a business bank, does not conflict with their orginal focus of servicing the lower-income bracket.
‘Not at all,’ he says. ‘There are many small and medium enterprises with banking needs and business banking is complex. We intend to use the same model we have for retail banking by simplifying the opaque arena of business banking. South Africa needs thriving small businesses to achieve real growth and development.’
As we conclude, I offer to pen Gerrie’s biography when he eventually downs his tools. But he declines with a humble chuckle, saying he will be too busy coaching young entrepreneurs to make time for a book about himself.
True to his company’s philosophy, even in retirement, he’ll hanker after simplicity and service.
This article is a brief extract from the book THE CEO X FACTOR – Secrets for Success from South Africa’s Top Money Makers – available here https://www.takealot.com/the-ceo-x-factor/PLID92980382
