When 'good' isn't good enough. (Customer Satisfaction).

Just because you've been doing something for years and have become pretty good at it, doesn't mean you should continue doing it--or that you are in the right business. Jim Collins, in his current business book, "Good to Great," compares today's mediocre companies with a small group of companies that migrated from "just being good" to becoming great. He defines "great" as exceeding the "overall shareholder return" (stock price increases plus dividends) benchmark by a factor of four times the market average over a 15-year period. Firms like Wells Fargo, Walgreens, Philip Morris, Gillette, Kroger, all in extremely competitive businesses, made the grade, while A&P, Eckerd, B of A, and Warner-Lambert didn't.

Companies that became great knew this secret: By focusing on what you are good at will only make you good. But focusing on what you can do better than anybody else is the path to greatness.

We bankers are all trying to chart our paths to greatness. The question is how? Lets look at some alternatives.

Products. How about some new type of checking account? Better loans? Unique money-management concepts? Is there a possibility for your bank to develop the software and operational protocols that make your accounts truly great--far better than your competitors? A generation ago, Merrill Lynch invented the totally integrated "cash management account," which distinguished the company for a few years. Now these accounts are pretty ubiquitous.

Pricing. Is it possible to offer the lowest loan rates in existence? And the highest deposit rates? And free checking? And free Internet banking? This is what your frontline sales people would like, because this is what customers want. This is further confirmation that we are in a commodity business and that all banks offer pretty much the same products. The key question: Can you sustain a long-term strategy of offering better prices? Is your cost structure so much better that you are willing to hang your hat here? The Internet-only banks gave this a shot and it didn't seem to work very well.

Alternative delivery technologies. How about offering more and better ATMs? Or a more "robust" (don't you love this word) website? Or account aggregation? Or wireless Internet access? The history of advances in these concepts is pretty clear. People love them, they use them and come to expect them when they are forced to move to a new bank. it is possible that these innovations may attract "early adopters" to your bank. But eventually these innovations will be copied, and there is some evidence that second-generation offerings even exceed the initial concepts.

Traditional branches. Well-located, well-designed branches have demonstrated their enduring value to extract profits from a nearby perimeter of prospects. And a well thought-out network of branches in a "market" can create true network-value by enhancing the perceived convenience factor. Chalk this one up as a possible way to create enduring value.

Bank employees. Research shows the importance to consumers and business clients of such personal characteristics as "professionalism," "courtesy," "correct problems quickly," "follow-up," and other attributes of the people with whom they deal. When asked what is the most important aspect of their bank, they will almost invariably include behavioral characteristics of bank employees. And when asked why they left their bank (excluding "moved away"), they will refer to some problem with employee responsiveness. Recruiting, hiring, training, motivating and paying bank employees may well be the "killer app" that bankers are looking for to grow their business. The problem is that in most banks, employees are not viewed as valuable "products" to be managed with the same attention that software products receive.

These are the possible ingredients of your competitive offering. How to mix them into the correct combination to move from being "just good" to "great" is the challenge. Next time you have a chance, go to a new Walgreens store or visit the company website and see if you can glean any additional ideas.

L Biff Motley is president of Motley & Associates, New Orleans. He can be reached at [phone].