While Apple Pay has created the headlines, the Starbucks app is currently the most widely used mobile payment system in the United States and Canada.
So how did a coffee chain disrupt banking? The answer might be in Starbucks' purpose: “to inspire and nurture the human spirit - one person, one cup and one neighbourhood at a time”.
Since redefining its purpose around five years ago, Starbucks has used it to guide all decision making. This includes providing health-care benefits for employees, using ethically sourced coffee and even adjusting the height of coffee machines so baristas can make eye contact with customers.
Compare the Starbucks purpose to one of its major competitors in the US, Dunkin' Donuts: “make and serve the freshest, most-delicious coffee and donuts quickly and courteously in modern, well-merchandised stores”.
I personally know Dunkin' Donuts makes delicious donuts in well-merchandised stores but the Starbucks purpose allows them to do so much more - to innovate by reimagining what the coffee experience is all about.
Let's apply this logic to banks. Do we exist to provide banking products in modern, well-staffed branches? Or do we exist to help people achieve what they want to accomplish in life?
So at ANZ I can say every day we help more than 60 young people set up an account for their first job, coach 26 customers to achieve their savings goals via the Saver Plus program and facilitate $1.2m in donations to charities.
A DIFFERENT KIND OF INNOVATION
The most successful companies innovate from the foundation of a clear and compelling purpose.
In the 1990s Sony was the world's most successful consumer electronics company and had the tools to digitise music long before Apple.
Sony has since blamed its failure to act on many things, including not being clear on its purpose. Meanwhile Apple was clear its purpose was to “delight customers” first, with benefits to shareholders and others following.
For banks, it's clear that rather than focussing on defending our core businesses or profits, we need to look at what business we're in and what more we could be doing for customers. We need to be solving real problems, removing real friction and delivering to a gap in the system to provide value.
And Apple? Rather than focus on protecting the iPod, Apple has continued to innovate and disrupt itself. Banks need to think the same way.
CUSTOMERS ARE IN CONTROL
Digital technologies have given customers more choice than ever, not just about which companies they deal with but how they deal with them. An organisation's purpose needs to resonate with consumers who will expect it to reflect their own values and purpose.
Chipotle is a Mexican fast food restaurant with 800 outlets in the US, UK, Canada and Europe. When Founder and CEO Steve Ells learned about factory farming, he swore his business would champion “food with integrity”.
So Chipotle started with a clear sense of purpose - to “cultivate a better world” - which is reflected in every aspect of their operations. Interestingly, at one point McDonald's owned 92 per cent of Chipotle which they sold for $1.5 billion in 2006. Chipotle's market cap is now $21 billion.
Chipotle is also having a positive impact on society with McDonald's (and others) ending the use of certain pig farming practices.
At ANZ we've spent a lot of time thinking about how we can use marketing and analytics to better understand and serve our customers.
Customers don't like being sold to. Instead, they want to understand their options so that they can make the best choice for them. So what does this means for banking?
My vision is that at least 90 per cent of the insights we create will have nothing to do with selling something. Instead, they will be about helping us to provide an improved experience or product proposition so our customers can make better decisions or be more in control of their finances.
EMPLOYEES ARE LOOKING FOR MEANING
Organisations that centre their purpose on the idea of changing people's lives and making the world a better place don't just resonate more with consumers, they inspire employees. As millenials become the majority of our workforce, 'providing meaning' is becoming even more important.
More than half of the world's population is under 30 years old and we know this group cares more about fulfillment and work-life balance than cash. They are more vocal about what they want from their career and, most importantly, demand to know their organisation's purpose - and are willing to leave if it doesn't align with their values.
People don't want to come to work to just maximise shareholder value or get their pay cheque. They want to feel like their work is meaningful and worthy of their time.
Online retailer Zappos was founded in the US in 1999 and is one of the largest e-commerce companies in the world. CEO Tony Hsieh attributes the company's success to its purpose “to provide the best customer service possible”.
Zappos really cares if its customers are happy. Their purpose is clear in every interaction, in their beliefs and even their approach to recruitment. To join the company you must attend two interviews: one to assess your ability and a second to assess your cultural fit.
All staff go through the same four-week training program, including two weeks on the phone to customers. At the end of the first week they offer the entire class $2,000 to leave. They only want people who believe in the company. Interestingly, less than 2 per cent of all prospective employees end up accepting the offer.
At Unilever, the experience of embedding purpose has transformed the organisation. Its purpose "to make sustainable living commonplace" is used to drive innovation across the company, from developing detergent that uses less water to low fat ice-creams. Words have been backed by their action.
Since 2010 when the purpose was introduced, Unilever's share price has doubled and staff engagement scores have risen to 85 per cent. LinkedIn data shows Unilever is now the third most attractive employer going, behind Apple and Google.
CLEAR AS DAY
A good purpose does more than guide decision making and inform business strategy. By forcing companies to constantly reassess why they exist it pushes them out of their comfort zone and mandates innovation.
All the organisations I've mentioned - Apple, Starbucks, Chipotle, Zappos, Unilever - innovate from the foundation of a clear and unique purpose. They exist to do more than make money, although I think it's fair to say they do that too.
Purpose should drive decision making and inform how we think about everything in our businesses. We shouldn't answer questions based just on what a spreadsheet or Powerpoint tells us, we need to go back to why we exist and ask ourselves, what would be the impact if we disappeared tomorrow?
Organisations that succeed in the future will be those that know not just where they are headed but why they are heading there.
This article is an edited version of a speech delivered by Matt at the CXO Leaders Summit in Sydney.
Matt Boss is Managing Director of Products & Marketing at ANZ.
Photo credit: Anna Hoychuk / Shutterstock.com