Developing the ATM Market

After infusing our sales, marketing, service, and development teams with people experienced in technology, and systems, we were ready to begin the process of market development.  I believe there were three philosophies that gave us the impetus for success.

1.  Our firm commitment to customer satisfaction.

2.  Our commitment to provide outstanding service and support to our customers and associates.

3.  An unwavering commitment to always doing the right thing in all circumstances.

Here are just a few examples of those philosophies at work.  Ray, our Chairman and CEO felt we had not fulfilled our commitment to customer satisfaction with our first ATM offering, the imports from the UK.  He called me to his office and expressed his concerns and directed me to offer each customer who had purchased one of those machines their money back or one of our new systems at no cost.  To give you some idea of the courageousness of that decision, the impact on the companies bottom line was nearly a negative20% .  The impact on our ATM business was a delay in any profit contribution for at least a year.  As it turned out the decision was received so well that the real impact was a kick start to our business.  This group of customers willingly became our pilot group and subsequently our biggest boosters.

We understood from our discussions with our customers that ATM systems had to be available to their customers 7/24 on a very consistent basis.  In keeping with that requirement and our service philosophy we established the following policies.

1.  Service response to a system down would be less than 2 hours.

2.  If the system were not back in service in 4 hours a notice would be posted in our home office system and in my office.

3.  If the system were not back in service in 8 hours, I would make a personal call to the president of the bank, explain our actions and assure him that the problem would be resolved.  I also gave them my direct office number and my home number in case they need to reach me for any reason.

4.  We also established a strict ratio of geography and number of systems a single service territory could support.

5.  Finally to assure control of these policies and facilitate the reporting, we established a central dispatch system in our headquarters to give every customer an 800 number to report problems on a nationwide basis.  Eventually this system was implemented for all of our products.

Fortunately, there were very few alerts that ended up in my office because our field teams really responded to the situation with great enthusiasm.

One of the most difficult policies for us to implement was to limit the areas we would allow our sales force to sell to because of the service area restrictions.  For example there were just not enough banks with a confined geography for us to keep our commitments to in the Dakotas and other areas like that.  As much as it disappointed our salesmen and some customers in those areas, “It was the right thing to do”. 

Going back to our decision to replace or reimburse our original ATM customers, although it was very costly, “It was the right thing to do”.

The lessons learned were somewhat obvious but worth repeating.

Lessons learned:

1.  A firm commitment to superior customer satisfaction is one of the primary keys to success with any product or system offering.

2.  Providing outstanding customer service not only provides customers who are willing to give positive testimonials, but willing to reorder your products and systems.

3.  “Doing the right thing” forms a solid basis for all decisions and in many cases allows you to make difficult decisions without remorse.

Changing The Sales Culture

Changing the sales culture of a 100 plus year old company is challenging.  Most of our relationships with our customers had been with the security and facilities organizations in Financial Institutions.  We had begun to establish some relationships with the retail bank as we developed the pneumatic tube and remote drive in banking business.  However we determined through many discussions with financial institutions and our consultants study that we needed to now learn to communicate with the marketing, retail, and systems organizations.  In addition as we were developing this market, we needed to elevate our contacts within financial institutions to the mid and upper management levels. 

The new sales specialists we were hiring would help us make these changes in disciplines’, but we knew that penetrating higher up in the organization would require the time and efforts of myself, the most senior managers in the field, and our upper management.

Since I had been working in the field for a couple of years developing the new drive in banking product line, I concentrated on the senior level Area Managers in the field.  I asked them to get me appointments with senior level managers at the large and medium size Financial Institutions.  We went in as a team, which was, myself, the Area Manager, the Diebold representative assigned to the account, and the ATM specialist for that region.  I wanted to make sure that all of our personnel involved with the account were introduced at these levels.  Earl, Ray, and Joe, our National Sales Manager, also participated in this process by arranging introductions where they had previous relationships.  They also joined us on a number of calls in the field. 

There were also a number of traditional events that helped this process.  At all the major conventions we hosted several luncheons for the senior level managers of financial institutions at very prestigious restaurants.  Because Ray was an avid baseball fan, we owned season tickets to all major league teams, and bought tickets to all playoff and World Series games.  Finally, we hosted an annual Christmas luncheon for all New York Financial Institution executives at the 21 Club.  Now all the ATM specialists and myself were included in these events.

As a result of all this effort, our sales organization was introduced to a higher level, which enabled them to get the audiences they needed to persuade prospects to consider Diebold as their supplier of ATMs.  This was a courageous task for many of them because their current contacts were not happy with them going ever their heads.  Fortunately, because they were an experienced sales force, in the majority of cases, they were able to manage the situation.

I do not want to leave you with the impression that we forced this strategy on them.  Prior to initiating the plan, we all spent a great deal of time in meetings, both group and one on one, explaining the reason and expected results of our plans.  We also made sure we listened to their concerns and adjusted were their recommendations made sense.  I felt that by the time we initiated our activities we were in sync and would be successful.  It did accomplish our goals.  I think some of the specific experiences might be interesting and educational.  I will discus them in the next chapter.

Lessons learned:

1.  Changing a culture requires good communications and support from all levels of management.

2.  Using entertainment allows you to establish more informal relationships that are very helpful.

3.  Allowing the people who will be effected the most be part of the planning process helps the process of culture change.

4.  Approaching the customer as a team, demonstrates to the customer that this is a company not individual program, and has the full support of management.

5.  Finally, we realized that this approach assisted our sales efforts in all product lines.

        

Creating a New Culture

We spent the better part of the next 5 years changing the culture of the Diebold Sales, Manufacturing, Service/Installation, Administrative, Data Processing and R & D organizations.  They all had to understand and embrace the new world of technology oriented; systems, and self service products. 

The sales organization was the biggest challenge.  They had to develop new contacts and prospects in their existing accounts that in many cases their old contacts did not even associate with.  We were asking them to talk to data processing, systems, and retail bankers instead of security and construction people.  In some cases where they had moved up in the organization and made contacts with higher management in financial institutions it was easier.  Unfortunately that was not the norm.  In many cases the sales people were afraid to go to new people, fearing they would upset their established relationships.  We were aware of all these challenges due to our interaction with this organization during our Product Management days.  The frequent trips to the field helped develop an understanding and empathy for our field organization.  This also helped me select, orient, and develop the five new Automatic Banking specialists that were hired to provide support and sales assistance to our field organization in the field.  We wanted them located in the Five Area Sales management offices so they could be closer to the field and become part of that culture.  We also added account managers for the larger financial institutions and a field support organization. 

The field support organization was designed to support the sales and service team with customer specific systems designs for proposals and installations, training for our customer and sales personnel, and service support related to systems issues.  As you can see this was a very critical resource.  Interestingly it was the first time, as a company, that we ever employed women in a professional salaried position interfacing directly with customers.  Another culture change for our company and I discovered later for some of our customers also. 

I think it is worth a short digression here to relate some of the challenges these women faced.  As much as I tried, I am not sure I completely prepared them for some of the situations they might face.  Inappropriate advances were made by both some of our people and customers.  Our employees were easy to deal with.  They were terminated immediately.  Unfortunately you cannot terminate a customer.  However I did find myself a few times having to have a very serious discussion with customers.  Having committed to our associates that any inappropriate behavior was unacceptable, I did tell, even, customers that we would cease our relationship with them if the behavior continued.  I recall one convention where I found our first and best support person, Judy, crying in the study of the suite we had rented for entertaining and socializing with our customers and prospects.  It was the last day of a very busy week and she had worked long hours every day.  She had just forcibly rejected a married customer that she had worked with for some time back in her territory.  She was both shocked and worried that she would damage our relationship with the bank.  I reassured her that she was more important than any customer relationship and we can fix the relationship by doing the right thing.  I spoke to the banker and asked him to apologize to her the next time she had occasion to be in his bank.  He apologized profusely to me and did put her at ease over the next few weeks.   I told her to take the rest of the night off and moved her to first class with me for the trip home.  We talked a lot about a number of similar situations that she had endured but was afraid to talk to anyone about.  I think I was able to assure her that she was more important than any customer that could not use proper decorum when working with her and she should not be afraid to tell us about these situations.  This of course prompted me to call the entire field support team into Canton and discuss our policies regarding these situations.  It was also a great opportunity to get their input on all the issues they were dealing with.

I will discuss the sales and service culture changes in the next chapter.

Lessons learned:

1.  Take time to understand why people resist change.

2.  Help everyone understand the reason change will be good for them and our company.

3.  Take time to listen to the people who are interfacing with your customers.

4.  Do not hesitate to demonstrate your moral and ethical principals to both associates and customers.

5.  Always treat people as the valuable asset they are and be sure to let them know it.

The Beginning of a New Era

About a week after the consultant’s presentation on Cash Dispensers and ATMs, I was asked to join Ray and Earl in Ray’s office to discuss the presentation.  They asked me what I thought and I said although I understood the reasoning behind their recommendations, everything I had been reading and hearing from our customers indicated a potential new business opportunity for our company.  I realized this was only a gut feel not necessarily based on hard facts, but to me it was a strong feeling.

Ray took a minute looked and Earl got a nod and said they agreed.  Then he said however we don’t think we can be successful with this kind of a product with our current organization structure or talent pool.  We would also have a problem with our existing sales and service organization.  What they proposed was the establishment of a new Automated Banking department separate from all other existing organizations in the company.

Then he said we want you to run that organization.  He added you would be provided all the resources you will need, justified by business plans, and we want to run it as though failure will mean you are out of a job.

I thought for a few minutes, convinced that this was a great opportunity, and agreed to take on the challenge.

I discussed it with my wife over cocktails that night.  We always had cocktails without the girls before dinner.  She was a bit concerned about putting all our eggs in one basket but agreed to support me in the decision to go forward.  The girls were still a little too young to understand all the implications but agreed.

I need to mention another type of mentor that entered into my life around this same time.  It was my executive assistant, or secretary at that time, Mary Ann.  We affectionately referred to her as MA. MA helped me in so many ways and stayed with me for the remainder of my career with Diebold.  MA was a long time employee with the company and really knew many of our associates, their skills and attitudes; she knew where the bones were buried, so to speak.  She was also an outstanding organizer of my schedule and very busy travel itineraries.   Most importantly she was not afraid to tell me when I was making mistakes or did things to offend others. 

We started our new department, The Automatic Banking Division, by moving to new quarters north of the city across the freeway from the Akron/Canton airport.  We began to recruit a new employees in product management, sales, and marketing.  We were looking for people with experience or at least a desire to be involved it technology, electronics and or computers.  At the same time our corporate engineering, research, and manufacturing divisions began doing the same thing.

Our first task was to develop a strong business plan.  Since we had some experience with an imported product, and had a very detailed market analysis done by the outside consultants, we were able to complete this task and get it approved in a couple of short months.

Organizationally, the plan called for a separate sales support team in the field reporting to me.  A separate engineering, and manufacturing group with a strong dotted line to me.  My own marketing and product management staff.   A separate service group both in the field and home office.  More about that later.  Finally, a separate P & L to allow us to measure our financial progress.

The next year was spent staffing the organization, training our new team, defining our new product specifications, and designing, testing and launching the new Diebold ATM product line.

The next phase of this new venture was probably one of the most challenging I have ever faced.  This was the challenge of changing the minds and attitudes of an experienced team of sales, manufacturing, engineering and support people who grew up developing primarily physical security and mechanical service products for banks.  This was a new world for them and their customers.

Lessons learned:

1.  Don’t be afraid to seize the moment.

2.  Always discuss major decisions with your family.  You need their support.

3.  Always look for new mentors and appreciate their efforts to help you.

4.  Always invite criticism and take it seriously.

5.   Good communications at all levels is the key to getting the support you need for success.

Managing Multiple CEOs

Managing Multiple CEOs

Soon after my appointment as Director of Product Management Earl called me into his office for a long chat. That is when he began to be my most important mentor. He wanted to talk to me about managing managers. He emphasized two major points. First, do not try to do their jobs for them. Help them do their jobs by removing obstacles they might face from other departments or divisions. Remember that you must work for them as much or more than they work for you. Second, help them learn your CEO approach to Product Management.

The first point was more of a challenge than I thought it would be. What it really meant was that I would have to acquaint myself with virtually every department and division in the company that might touch or be touched by our Product Managers. I had already done that with a number of them but I had not spent much time with the administrative groups. What Earl really knew was that this effort would provide me with invaluable knowledge about how our company really worked. Boy, was he right. What a great education and opportunity to get to know a broad base of fellow associates and them to get to know me. I was now ready to really assist our team.

The second challenge was not as easy as I thought it might be. The reason was that most of the Product Managers had been in their jobs for a number of years and had not been acting like CEOs and were a little intimidated by the concept. Although they all were aware of my success with this philosophy, they thought it was because I was new and didn’t really understand the Diebold traditions. Eventually we were able to overcome this attitude in most but not all cases. We did it together. I spent a lot of time with each one of them in their meetings with other departments they depended on to perform the work necessary for their products success. I was always careful to just observe and provide my feed back after the meetings. This seemed to work very well. Soon all product groups began to achieve their goals on a regular basis.

In addition to our standard product lines we were able to develop and introduce a very sophisticated electronic security system and began to market a cash dispenser imported from the UK. The cash dispenser was not very successful but we began to hear about other companies like IBM, NCR, and Docutel (now defunct) from our customers. We also began to get questions from our customers regarding our plans for this product line. In response to this Earl and Ray commissioned a major market study to be developed for us by one of the major consulting firms. They came back with an extensive study, which ended with a recommendation to get out of the business. In their opinion, automated cash dispensers and ATM were a fad that did not have long term potential. I did not agree. I found out soon after the presentation the Earl and Ray did not agree either.

Lessons learned:

1.To be a successful leader of other managers you must understand that you work for them as much or more than they work for you.

2. Be empathetic with the concerns of your team when you are attempting to introduce new philosophies of management.

3. Go with your managers to face difficult situations but don’t provide feedback until you are alone with them. Then let them change on their own.

4. Don’t be afraid to listen to your gut. Consultants are not always the last word.

Learning Retail Banking Service

When I started this assignment, our challenges were in the product development area. We were in the process of introducing a new very innovative Drive up banking system. The system had the flexibility to be installed virtually anywhere on the banks premises’ and could be controlled by the teller either by line of sight or closed circuit TV. The carrier arrived at the drive up actually presented itself to the customer by extending an arm to the car. Of course it had a sensor to prevent damage to the car. It was called the VAT III system because it was the third generation of pneumatic tube remote banking drive up systems and we called it a Visual Auto Teller. My initial efforts were to encourage our engineering and manufacturing teams to design a very cost effective high quality system.

Now we had to go about the business of proving the product in the field. I began a year of extensive travel all over the United States. In most cases I was requested by the salesman to assist with a new sale or to help a customer who was having problems with our new system. In a number of cases I was asked to view a new installation or service problems experienced by our installation and service department. Fortunately my associate Bob came out of the service and installation area and was very helpful there.

At virtually every stop I learned something new and was able to communicate great suggestions from our customers and field associates. The team in Canton was very responsive and within 6 months we had a very successful and profitable new product. Remember, they took ownership and they took responsibility for making sure we were successful. We expanded both our production line at the main assembly plant and increased our capabilities at the pneumatic systems facility.

This was only one product in our line of drive up banking products. We also manufactured drive up windows and drawers and a more robust remote system that could handle larger pay loads. The VAT III system became about 60% of our business.

In those days the most interesting markets were in what was called the Unit Banking States. These are some of the states where branches were not allowed; Arizona, Texas, Florida, Illinois, Minnesota, Colorado, and a number of others. This presented those banks with a unique challenge to provide convenient services to their retail customers. Because they could not use the branch to reach out to their customers, they needed to make the experience of visiting their bank an easy and fast service. Remember all their customers had to go to the same place for service.

We designed some very unique installations. 6 – 12 lane drive up systems were common. I many cases with closed circuit TV because of space required. I remember one very unique installation in Minneapolis. Bob and I both visited the site to help plan the design. This bank was located in the center city and wanted to be able to provide remote banking services to 15 locations throughout to cities downtown walkway system. We had pneumatic tubes going throughout all the building is the area. What a challenge to our designers and the banks legal department getting permits. Well it took some time to implement but it all worked just fine.

We also learned that much of our service problems were caused by insufficient training of the customer’s tellers and management in the proper operation of our systems. We created a new customer support group to design training documentation and programs to help the situation.

All in all this first year was a great success for all our associates and me. Soon I was asked by Earl, my boss to assume the responsibility for all products and the Director of Product Management.

Lessons learned:

1. When your associates assume responsibility for results, great things happen.

2. You can never get enough time in the field with both customers and your own associates.

3. Don’t hesitate to change your approach to solve a problem.

4. Constant and clear feedback to the associates who are responsible for doing the real work helps them improve and makes their jobs easier.

5. Constantly recognize your associates for the successes that are achieved.

CEO of Remote Banking

CEO of Remote Banking

My new career started with a great learning experience. I of course lived in a hotel during the week and drove home every Friday and returned Sunday evening until the family moved. This first 6-week period with the company was spent in a practical learning mode that was invaluable.

Every morning I met with our customer relations manager, a seasoned experienced salesman, for coffee before breakfast with visiting customers. We had customers visiting us nearly every day. In addition to teaching me customer relations William also thought me everything he knew about our products and systems and how they worked. For the first two weeks I was required to spend at least 4 hours each day observing product presentations and demonstrations in our display hall and accompanying the groups on our plant tours.

At that time nearly everything was done in the main plant. Administration, accounting engineering, manufacturing, service, and a dinning hall. We had three other manufacturing facilities. One down the road that manufactured the bulk of my products and one in a near by town that manufactured metal under counter furniture. The only other manufacturing facility was in upstate New York where we manufactured Pneumatic tube systems and large mechanical files. The only other offsite facility was a warehouse. At his time we manufactured Safes, Vault doors, Drive in windows, Remote banking Pneumatic tube drive up systems, Metal furniture, Safe Deposit Boxes, Night Depositories, File systems, Pneumatic Tube systems, and distributed a cash dispenser made in England. We also provided complete delivery, installation, and service for all of our products.

Most lunches and dinners were spent with visiting customers. I spent the remaining part of my days learning about the remote banking business. Here is where I put on my CEO cap and started to roam around the entire company learning from everyone who had anything to do with my products. I also had a great assistant, Bob, who had been in the department for many years and could point me in the right directions. He was a great help and a great mentor to me. In addition, I was assigned a very capable and experienced secretary who was of great assistance in directing me to the right places in our company and knowing who really was important to our mission. Connie was with me for about a year.

I talked to engineers, manufacturing foreman, the manufacturing men and women on the line, packers, shippers, accountants, order entry people, the documentation group, sales, advertising, and salesmen in the field.

This was an interesting experience because I don’t think any other product managers took the CEO concept to heart. Some times I had to explain to people why it was my business to talk to them and why I had the responsibility without the line authority. I think this is where I really learned to lead rather than manage people. Because I did not have authority over them I had to persuade, encourage, and motivate them to do what I thought was necessary for success. Eventually they began to understand the concept and started to help me. That is when real success began to happen.

Lessons learned:

1. Informal time like breakfast, lunch, or dinner is a great way to understand your customers needs and desires.

2. Never underestimate the value of learning from experienced associates.

3. When moving into a new situation spend time understanding and listening to the aspirations of your new associates. The return in the form of support and assistance is invaluable.

4. Take the time to learn all your company’s products and systems and how they work together or compliment each other.

5. Talking and listening to the people who do the work that makes your products perform will provide the best input you will ever get to maximize your results.

6. When others begin to take ownership of your business and assume responsibility for results, you will see great results.