Don't let the revolution slip by: the president and CEO of Umpqua Holdings Corp., Ray Davis, explains the innovative marketing approach that propelled his bank's growth from six to 120 branches in 11 years.

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I'm a believer in revolutions. They are out there in the market you serve. And you need to find them before they find you. If they find you, it's way too late. Think of Marie Antoinette in France or Nicholas II in Russia. Think of Kmart, the old AT&T, United Airlines, Kodak, and other companies now struggling to regain their footing after the competitive landscape shifted.

Big companies can invest billions and start revolutions, as Toyota did with the Prius model. Start-ups can get millions in venture financing and, if they're lucky, create something revolutionary, as the founders of Google did. Visionary founders can sometimes revolutionize an entire industry, as Phil Knight and Bill Bowerman did at Nike. But even if you are just a small company without huge budgets for research and development or angel investors with near-bottomless pockets, you can take advantage of revolutions. That's what we tried to do at Umpqua.

Revolutions come in many guises

You don't need to create revolutions. Just go out and find those that are already happening. To me, a revolution is anything that is changing the industry you do business in, whether it's cosmetics or finance or pharmaceuticals. Advanced technology has obviously brought about many revolutions in recent decades. But many revolutions have nothing to do with technology. Design, for example, is a revolution that is going on in my industry and a lot of others. Changes in customer behavior cause revolutions, as do new business models, government policies, social changes and more. These changes can create opportunities for you if you pay attention to them--or threaten your existence if you don't.

Revolutions don't have a big "R" on their sweaters. They often start small and become overwhelming over time. If you see the revolution coming while it is still on the horizon, you can often take advantage of it. Our story at Umpqua is a case in point.

Before coming to Umpqua ... I ran a bank consulting firm and dealt with CEOs from all sizes of banks. I was struck by the lack of creativity in the industry. Banks were all the same--while other retail establishments were busy creating distinctive atmospheres for themselves. Many service companies were reinventing what quality service means--Ritz-Carlton, for example, the upscale hotel.... Retailers were creating a total customer experience in their stores, using music, lighting, and other design elements to project a particular image. You could walk into a Gap store and know that's where you were even if you didn't see the signs. Same with Banana Republic, Victoria's Secret, and so on. These were revolutions that were obvious in retail. But my industry slept on. Every bank you walked into was the same as every other. They all came in one flavor: plain vanilla.

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But I knew that the revolution affecting retail clothing stores could and probably would spread to our industry. So we started revamping Umpqua by looking at other retailers.... I think that it always pays to look at what is happening in other industries. Because revolutions can start anyplace, and it's often in an industry unconnected to yours.

After we implemented a lot of the retail and service concepts we learned from Nordstrom, Ritz-Carlton and elsewhere, people started to call us revolutionary. U.S. Banker, BusinessWeek, Fast Company, and other publications took notice and started writing about us. We didn't have to invest big bucks in research and development or find angel investors. All we had to do was look around and see how companies in other industries were beating their competition. Then we had to get serious about breaking the rules in our industry, and then creating the discipline, sense of urgency, intensity and focus to make the changes necessary. And in some quarters, sad to say, that's revolutionary.

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How to find revolutions

It's hard to notice revolutions when you're in the heat of the battle because you're too busy fighting. And that's another reason why I say that a key role of a leader is to help people rise above the battlefield.... When you have a wider perspective it helps you to see the revolution gathering that can sweep you away--or, if you harness it, carry you ahead of the pack. But you can also use some specific strategies to sense changes in the marketplace that might turn into revolutions:

* Leave the building.

* Look outside your industry.

* Partner up.

* Ask "dumb" questions.

* Take your blinders off.

Leave the building

"In Search of Excellence" popularized the phrase "management by walking around," and I'm a believer in that. But it's not enough--not by a long shot. If you are going to grow your company, you've got to do more than manage by walking around: You've got to get out of the building. Too many leaders are focused on internal operations and pay too little attention to the world outside and the revolutions going on out there.

The best leaders spend a lot of time out in the field talking to frontline workers and customers. Bill Marriott, the legendary former CEO of Marriott International, used to log 200,000 miles a year visiting Marriott operations and a competitor or two, according to Fortune. "CEOs really don't listen enough," he told the magazine. "My ideas come from being exposed." One time, for example, he heard from hotel guests sitting around a hotel lobby that they would prefer to have tables, in addition to the usual easy chairs and couches, to make working and snacking easier--and soon Marriott lobbies sported tables for guests' comfort. Jack Welch of General Electric and Louis Gerstner of IBM used to make it a standard practice to spend more than 100 clays a year meeting customers to learn what was happening in the marketplace.

In setting the strategic direction of my company, I see it as a big part of my job to be constantly on the lookout for key trends that could change the way we do business. I make it a point to get out and about. Talking to frontline employees who deal with customers on a daily basis is critical. They can often sense changes in customer preferences quite quickly. If customers are asking for products or services you don't offer, bells and whistles you can't provide, or new ways to deliver products and services, your people on the front line will know it. All you need to do is ask them.

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A lot of people would say that its marketing's job to spot trends. But in my company, that is everybody's job. I try to build watching for revolutions into every department's responsibilities. For example, our commercial bankers may come to us and talk about the needs businesses have and suggest how we can meet those needs with a new type of product. Everybody should be listening to the customer.

Look outside your industry

We found many of our ideas for revamping Umpqua from great hotels and retailers. Most of the time, the revolution that will pay off for you is not in the industry you're in. You'll find it in another industry. You need to seek out other industries, see what their good ideas are, and then figure out how to apply those to your business. I guarantee you no one else in your industry is doing that as normal practice. You have a chance to do some really fresh thinking about your business, your strategy and your market. Yes, you can look inside your own company or industry for new ideas, but most of the time, the truly revolutionary ones are from a different arena altogether.

Ask your marketing director, for example, to sit down with the marketing director of a successful company in another industry. If you're selling hardware, for instance, sit down with somebody who is in the transportation business. You may not get ideas about selling your product, but you could get ideas about branding, strategy or public relations opportunities. You will get idea from somebody who sees the world in a fundamentally different way. And that is always eye-opening. For me, hiring bank consultants for advice is not exciting, because they're just going to tell me about trends in banking and what other banks are doing. That's OK, but it doesn't go very far. I would be much more inclined to hire a retail consultant or a hospital consultant to come in and say, "Here's how you can use our ideas in your industry." When you talk to someone who sees the world differently, you're probably going to discover brand new ideas for your business.

Also, consider reaching out to your own suppliers. Again, if you're selling hardware, reach out to the people who manufacture what you sell. How do they think about the market? What branding strategies do they use? Not only do you find ideas you might be able to use, you might also find ways to partner with them and generate additional revenue for you both.

Partner up

Partnering with other companies also gives you a fresh perspective that can help you spot trends and revolutions. We are always willing to listen to people who want to collaborate or partner with us. Recently, Umpqua teamed with Rumblefish--a leading music-focused marketing agency--to develop the Discover Local Music project. Rumblefish reviewed the music of hundreds of independent artists from the communities we serve in northern California and the Pacific Northwest to compile a compact disk, "Discover Local Music: Vol. 1 Sacramento to Seattle," that we feature in all our stores. Working with Rumblefish gave us a new take on the tastes of our customers. I can't say that it helped us spot a new revolution yet, but gaining a deeper understanding of the communities where we do business is all to the good.

Another partnering opportunity arose when Microsoft came to us, wanting to explore how their technology could help transform the banking experience of customers. Microsoft's vision included such concepts as enabling a customer's personal digital assistant (PDA) or cell phone to send an identifying signal to bank associates when the customer enters the store. In turn, an associate can immediately begin the process of accessing the customer's account to help reduce wait times. If using a bank kiosk, the customer could use the PDA to quickly transfer personal information to apply for a loan or other account services. Customers could also use the technology to transfer promotional information from in-store digital marketing display directly on to their PDAs. By partnering with Microsoft to test these concepts, we hope to ride the crest of the next technology revolution.

Proctor & Gamble has an important program it calls "connect and develop" for finding revolutions based on working with partners. CEO A. G. Lafley rays, "We want P&G to be known as the company that collaborates--inside and out--better than any other company in the world. I want us to be the absolute best at spotting, developing and leveraging relationships with best-in-class partners in every part of our business." P&G isn't just looking for new products, but what Lafley calls "game-changing" ideas that go beyond product improvements to packaging, technologies, processes and commercial connections that can change the playing field.

Ask "dumb" questions

Sometimes, when you've spent a while in an industry, you can grow a little jaded, thinking you've seen it all. It pays to get a naive perspective. People new to your company bring fresh eyes. They haven't absorbed the conventional wisdom that every company accumulates. They don't know what they can't do. They ask what might be called "dumb" questions. Next time you hear what sounds like a dumb question from a new employee, customer or business partner, stop and think about it. It may only seem dumb because of a blind spot you have. After all, a dumb question is one that has an obvious answer, one that "everybody" knows the answer to. My feeling is that when something is obvious to everybody, watch out. There is probably a better answer out there that isn't obvious. And it could help you uncover a revolution.

And don't be afraid to ask dumb questions yourself--of your customers, your employees, people in companies you admire, anyone who might have something to teach you about your market and how it is changing. Even if you think you know the answer to a question, ask it anyway because you may not know the answer from the perspective of the person you are talking to--and that other perspective is often crucial to gaining new insight. Dumb questions are simple questions that probe the obvious and simultaneously challenge us to take our blinders off.

For Umpqua, "How can we encourage people to hang out at our bank?" was a dumb question because everybody knew that people rarely want to hang out at banks. The conventional wisdom was that people just wanted efficiency--to be able to get in and out of the bank quickly. Good service meant fast service, and that was it. But we asked the dumb question, and it helped us on our way.

People look at Umpqua and say a lot of things we've done have been revolutionary for the banking industry. I take that as a compliment, but really, it's all a matter of differentiating ourselves. How do we stand out from the crowd? If what we do to stand out seems to others like it's revolutionary, that's a good deal. It'll get people charged up. But that's not what I mean when I talk about finding the revolution. Revolutions are going on out there that may have nothing to do with you, but it could be smart to tag along with them.

Take your blinders off

Blinders are used on horses to cut off their peripheral vision so they can only see straight ahead and don't get distracted by things along the side of the road. It keeps their focus on the road ahead and their destination. A lot of people have their own blinders keeping their eyes pointed straight, focusing just on their goal, doing their job day in and out. They cut off their own peripheral vision, even though that can be vitally important in business. You want to take your blinders off so that you can get distracted. A lot of discoveries are made serendipitously, which means finding one thing while you are looking for something else. But you can't do that if you are so focused on doing one thing that you can't even see something else that is right in front of you. If you are intent on panning for gold, you may not see the diamond that lands in your pan.

My idea of peripheral vision is not just being able to see farther to the left or right, but being able to see things that might help me wherever I run across them, in a store, at the airport, in a magazine, wherever. Be open to distractions. If you run across a product or service that seems fresh and original or just incredibly good, ask yourself, How can I apply this to my company?

I get most of my ideas from companies that have nothing to do with banking. But most of my competitors in the banking industry, bless 'em, don't try to learn from other industries. They don't seek out oddball ideas that they could turn to their advantage, and even when they run into one, they don't recognize it because they don't practice their peripheral vision.

It doesn't matter what type of business you are in. Revolutions are happening all around you. Make sure you find them before they find you.

This article was excerpted from the book, "Leading for Growth: How Umpqua Bank Got Cool and Created a Culture of Greatness," [c] 2007 by Ray Davis with Alan Shrader. Reprinted with permission of the publisher, John Wiley & Sons Inc. This book is available at all bookstores, online booksellers and from the Wiley website at www.wiley. com, or telephone: [phone].

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Editor's Note: Ray Davis, president and CEO of Umpqua Holdings Corp., parent company of Umpqua Bank (assets: $6.6 billion), Portland, Ore., is viewed as a pioneer of change in the banking industry, revolutionizing how banks look, feel, sound and operate. This year Davis, together with business writer Alan Shrader, authored a book on business Leadership entitled, "Leading for Growth: How Umpqua Bank Got Cool and Created a Culture of Greatness." In the excerpt here, Davis discusses the importance of identifying "revolutions" taking place in the market and quickly adapting or taking advantage of these changes.

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Alan Shrader is a writer and the managing editor of the award-winning journal, "Leader to Leader," published by the Leader to Leader Institute (formerly The Drucker Foundation). He has more than 25 years of experience in publishing as an author, editor, director of marketing and book publisher.