How this CEO is beating the big banks by thinking like his customers
Don't let orthodoxy stand in the way of doing new things
First published onMay 11, 2020
“A lot of banks use regulation as an excuse,” declares Oliver Prill, CEO of Tide, half way into our conversation. “It’s an excuse for remaining static. They exercise total command and control, and this restricts innovation.”
This theme — the importance of not letting orthodoxy stand in the way of doing new things — is one that Prill will return to multiple times. He regards it as central to his organisation’s success. And such a contrarian attitude has helped Tide stand apart from the big banks. The organisation is now a fast-growing fintech with a strong and singular sense of purpose: to help business owners save time, which they can then spend tending to growth. It achieves this through an innovative product offering that encompasses a range of features from rapid account opening to expenses processing.
The winds are blowing in Tide’s favour. Crisis breeds entrepreneurship, Prill believes. “New waves of creative disruption happen all the time, but they happen even more when there are discontinuities”, he says. “And any crisis is a business discontinuity.” Circumstances will weed out business models that aren’t fit for purpose. “This clears the way for new ideas to spring up.” Now there’s a contrarian attitude to crisis.
Martin Hurworth, a leader of, and advisor to, scale-ups, agrees. “A crisis breaks the circle. It forces the questions to be asked, “What do our customers really want now? What do we really want to be doing now? What are the opportunities now?” It’s assertive and dominant and uncomfortably forces change on people.”
The evidence supports such a view. Every recent economic downturn has led to thousands of new businesses being created — partly through financial necessity, and partly because constraints (social, economic or otherwise) tend to fuel creativity. This will hold true in the current crisis. It might feel like desperate times for the global economy, but a new wave of positive creative disruption is already on the horizon.
Prill suggests that Tide is already seeing green shoots. “Accounts are still being opened. A lot of people still want and need to start businesses. There’s a lot of substitution taking place as things continue to shift online, and certain trends accelerate.”
Tide is well positioned to capitalise on such trends because of its forward-thinking, entrepreneurial approach to business management. It is an organisation that is as innovative and adaptive as the customers that it seeks to serve.
Take organisational design. Unlike other financial institutions, Tide’s people are encouraged to work within autonomous areas. “We have guardrails. We have quarterly financial plans. We have certain ways of doing things. But fundamentally we want people to just get on. We embrace an attitude of test and learn. We would rather have something done 90% right than 100% right in the interests of getting it done.” The final 10% is delivered at a later date.
People management is another area in which Tide’s approach is relentlessly entrepreneurial. When a function or area is maturing, leadership is often changed to drive performance to the next level. “We go for forward hires,” says Prill. “If you bring people in who are too far ahead, they’re no longer hands on. So, we think on two years horizons.” This doesn’t imply that the leader in question will not have a role at the end of that two-year period — but that leaders are required to challenge themselves and others at all times to stay ahead of the curve.
On the question of why financial services firms often struggle to innovate, I suggest that being entrepreneurial is not always easy in markets that are heavily regulated. Prill disagrees. Instead, he says, leaders need to regard constraints as a platform for creativity rather than a barrier to it. “There are many, many scenarios where you can give your people freedom without hitting the regulatory guardrail. Onboarding, for example.”
He suggests that the real problem is that most financial services businesses don’t know what innovation actually is. “There are a lot of people in banking who just haven’t seen it in action. They have mechanisms that don’t like innovation, and reject it.” A test-and-learn process yielding negative results but useful insights for Tide would be classed as a “big failure” in a major bank, Prill believes. “These cultural and mindset issues are much, much more important than the perceived regulatory issues.”
Again, this contrarian mindset echoes that of the entrepreneurs that Tide exists to serve. Prill agrees, and offers a salutary lesson for people looking to do things differently. “Don’t listen to every piece of advice. It’s important to ask whether someone has been successful because they’ve done something, or despite it.” Not every piece of advice has been successful universally, he says. “It might not apply in your industry or your stage of development.”
Ultimately, Prill believes that a new wave of entrepreneurship is necessary to help the global economy get back to health — and that financial services has a crucial role to play in this context. Crisis creates new opportunities for entrepreneurs to flourish, but they need financial institutions that understand their ways of thinking. Prill says Tide is well-positioned to come out of the crisis stronger than it went in, and to help unleash this potential. “The longer the crisis, the stronger the opportunities for entrepreneurship will be. And we exist to support that.”
Tide CEO Oliver Prill’s three tips for leaders:
- Design and run your business in a way that reflects the value system of the customers you are seeking to serve
- Allow your leaders to work autonomously as possible within clear guardrails
- Be careful whose advice you listen to.