Buy the railroads

Over the holidays I played the board game Candyland with my nieces. Trivia Tidbit of the Day: Candyland was designed by a schoolteacher who taught children in a polio quarantine ward in the 1940s. She designed it so that children would not have to read or use any strategy at all to play. In the game, all players start at the beginning and follow a single colorful path toward a Candy Castle. Along the way, this path winds through the Peppermint Forest and the Chocolate Swamp, and players never deviate from the predetermined path provided by the game maker. Taking turns, each player draws from a face-down stack of cards that show one- or two-colored blocks and advances to the next block along the path with that color. The player who reaches the Candy Castle first wins the game.

The lack of any strategy whatsoever is excellent for children because it allows them to “compete” with adults. As I was losing to my niece, it struck me that this child’s game is similar to the digital roadmap many credit unions follow to manage digital banking solutions.

Like Candyland, the path for digital system management is always the same. A credit union reaches the end of the useful life of its existing solution, either by choice or because the provider will no longer support it, then embarks on an all-out effort to draft an RFP that reflects the frustrations and limitations it has suffered with the solution that is being retired. In the end, three or four providers are considered, and another system is chosen that has the same limitations as the old one, accompanied by a boatload of promises about how the vendor’s roadmap for the solution leads to the goal of Digital Transformation. Is “Digital Transformation” any less mythical than a Candy Castle?

For the next three to five years, the organization tries to follow the promised path while the provider attempts to deliver the next section of that path just before you arrive. Credit unions cannot deviate from the path the provider builds because of the closed nature of the system and the provider’s role in “facilitating” integration with other services. The digital banking providers are in control – a credit union cannot progress toward digital transformation until the provider is ready. More often than not there are a series of delays, with the level of frustration rising until the credit union or the provider flips over the game table and you have to start all over again. It’s like playing Candyland with additional cards that say, “Contract Expires – Start Over” or “System Sunsetted by Provider – Start Over.”

As I considered this paradox, I wondered if there was another game that credit unions should consider as a more modern and effective path to digital transformation success? And embedded in my question was a hint: the word “success.” What game is more synonymous with traditional concepts of success than Monopoly?

Monopoly is an entirely different game than Candyland.

Monopoly includes the ability to apply a strategy as you play. Your strategy can be different than the strategies employed by the other players and does not have to be sanctioned, or even anticipated by the game maker. Maybe you want to hold out, build up cash reserves and buy only a particular set of properties. Or perhaps you buy every property you land on until your cash reserves are low. Each time you go around the board you can make incremental moves that improve your strategy, or change it entirely based on the conditions of the game.  There is no single path; there is no one way to play.  You can even make your own house rules (do you put money in Free Parking or not?).

This open, strategy-based approach is the way credit unions can achieve Digital Transformation – not by following a single platform provider’s path, but by forging their own strategies and executing those strategies with providers who support credit unions’ roadmaps, not their own. To begin, you must define your strategy. Digital Transformation is a team game, so you should first sit down with your stakeholders to define how you want to pursue success. As a team, you should discuss different ways of approaching Digital Transformation. In these conversations, the how is much more important than the what. There are many strategies players use when playing Monopoly; how you play the game has a much bigger impact on your success than any individual roll of the dice.

The “Buy Every Property” Strategy

Many credit unions call themselves “fast followers”. You may think of this as the Goldilocks of innovation approaches as it allows you to adopt innovations while avoiding the risk that true innovators take. But it is a flawed strategy. We see it time and again in our business: an innovator does something new and a whole flock of institutions follows to avoid being left out. This is like buying every property you land on in Monopoly because you don’t want to miss out. Understanding that you could be left out is the sign of an experienced player but chasing everything within your grasp without considering its impact on your overall strategy is foolish. Credit unions who adopt this strategy spend money chasing the latest digital trend without considering whether it is appropriate for them and for their members.

The “Save It All for Park Place and Boardwalk” Strategy

Many credit unions save up a long list of requirements for their online and mobile banking provider, believing (hoping) that the provider can and will deliver on all those needs. The tell-tale sign that a credit union has adopted this strategy is when you ask them about their “enhancements list” they begin with, “our contract is coming up.” This is the equivalent of saving all your money with the hope that you can satisfy all your needs by snagging the ultimate solution. When players chase this strategy in Monopoly, they bleed money throughout the game, hoping for the chance to be the first to land on both Park Place and Boardwalk. Along the way, they hit every rent taker and deplete their reserves. Credit unions that are set on waiting for a chance to get a perfect, integrated system only obtain digital enhancements every five years, then wonder why they struggle to attract younger members.

“Buy the Railroads” Strategy

Instead of indiscriminately chasing every digital transformation fad or saving up to innovate everything in one big bang, the ideal strategy is to make incremental changes to your existing systems and address roadblocks that impede members who are trying to conduct business with you. These minor changes are typically far more cost-effective to implement than chasing a big slate of new systems and services.  When you need to add or replace a provider, prioritize truly enabling services and platforms upon which you can make ongoing, incremental improvements.

In Monopoly, this strategy is the equivalent of buying the railroads. Individually, these properties are inexpensive, as are the rents paid by those who land on them. But and this is the key, as you add more railroads, they work together to generate much greater value. So, while the cost of individual railroads is low and their low initial rents cause them to be overlooked by many players, their combined impact and effect can be powerful. Similarly, individual adjustments and tweaks to a system can have a much more positive effect than waiting and then searching for a whole new system.

One more thing. Note that the railroads in Monopoly are not all located in a single area; instead, they are evenly spaced around the game board.  Therefore, when you purchase the railroads, you make progress on all fronts.

Members encounter barriers in using your digital services every day, not necessarily because of the systems you’ve deployed but because of how you have chosen to deploy them. As an industry, we must start to manage our digital channels using concepts of agile Product Development and Product Management. Start with a minimally viable product, make incremental changes and additions to it, and most importantly, delete things based on observed needs to improve adoption of your services. This is not a once-and-done effort; no single provider will check all your boxes. Use enabling integrations and platforms, seek steady and consistent improvement on all fronts—month to month, year to year—the same way effective players add to their holdings and refine their strategies each time they go around the Monopoly Board.

You cannot win the game in one trip around the board – it’s all about the incremental steps that allow you to accumulate more of what you need to win as the game goes on.