Learn - The reasons why SMEs/corporate relationships don’t create value, despite the appearance of rapport - The biggest relationship opportunity available to corporates today: creating real value for the vast SME market. The rapport myth - and the value opportunity: Corporates are not trusted by their SME customers. Crucially this is masked by the ‘rapport’ that many corporate relationship managers have with their customers. The mid-market increasingly spend money only with companies who truly understand their business and add real entrepreneurial value. And rapport does not create this value. This ‘rapport myth’ must be urgently dispelled in corporates. As Gen Y-run businesses, boosted by economic recovery, collide with disruptive entrants to every corporate market, NOW is the time for large companies to face up to the truth: SME CEOs don’t trust them in their current format. What if client-facing teams could learn in-depth how entrepreneurial businesses really think? Could this radically transform the quality and sustainability these relationships? And by offering genuine strategic value, could this create an unassailable mid-market position?

1. Entrepreneurs
don’t trust
big banks
How can we change that?

2. Banks struggled to build
relationships with SMEs
before the credit crunch.
After? They became even
more transactional.

3. This matters.
There are 5.2 million SMEs in the UK.
99% businesses are small.
Big companies who want a share of
the SME market, need to think like
and understand small companies.

4. We brought together ..
Global or UK Heads of SME / Mid
Market Channel from leading banks,
big 4 firms and global telecoms, with
CEOs from fast-growth SMEs
to examine the problem and find
solutions.

5. This is what
we learnt…

6. Public and corporate policy
decision-makers think SMEs are
one big group.
They’re not.
They are put in a category based
on revenue thresholds.
That doesn’t work.

7. “The relationship between banks and
SMEs had become transactional.
We made a decision to invest in the
infrastructure. We looked to build not
the products - but the people.
We’ve recruited 600 relationship
managers”.
Challenger Bank

8. “We looked for people who were
good listeners and were patient,
who were willing to understand the
needs of the business.”
Challenger Bank

9. “Over 5-6 visits they try to
understand the business. They don’t
assume the product they want when
they walk through the door based
on their revenue.”
We attribute our growth [700%] to
the relationship approach not the
products or the price”.
Challenger Bank

10. And it works ...
“We recently acquired a business and
interviewed a few banks. I was shocked
at how they came in – they were
slagging each other off.
One stood out [Challenger Bank]. They
came at it from a different angle. They
weren’t interested in where we were
now. They were interested in where are
you going? What’s our next move?”
SME CEO

11. “All banks need to be better at
understanding at the outset ‘How
do you want to be served? What
does a good relationship looks like?’
and then frame everything from
there”.
Challenger Bank

12. “My question for all my people is
‘What are you doing to help
small businesses increase
revenue”’
That’s the heart of growing a SME –
not what it saves or other hygiene
factors”
Global telecom

13. From the mouths
of small business
owners…

14. “We have fingers in lots of
pies. We’ll miss the boat if
we don’t move fast”
SME CEO

15. “We LOVE to work with companies
who are agile, fast, decisive.
We want to deal with the people
who are making the decisions.
That doesn’t change whether they
are big or small”
SME CEO

16. “I hate dealing with companies who
are trying to sell a product.
Here’s what I don’t understand
about big corporates …. The first
thing I would do with MY client is to
actually understand their business!”
SME CEO

17. “The best relationships are when the
advisors are solely looking at things
through my eyes”.
SME CEO

18. “Our lawyer is sensational. I can talk
to him about anything day or night.
He thinks like an entrepreneur. I can
run an idea by him. Nothing is ever
too much trouble.
He genuinely cares about our
business and how they can help.
Everything is about the long term, not
about the now”.
SME CEO

19. The thing is, most
corporates KNOW…

20. They need to focus on needs
not products.
It’s all about relationships.
They’ve made progress but
need to do more.

21. So why don’t SMEs feel any
more like trusting their money
with big corporates?

22. Could it be…

23. “The problem is, our most talented
people don’t dream of a career in
SME sales”
How we emotionally reward our
people…?
Global telecom

24. “How do you define the heroes of the
organisation? If you define them as
the people who win the BIG business
accounts then you can’t expect
people to get excited about this long
term SME play.
We’ve created a separate part of the
business where heroism is
recognised differently”.
Challenger Bank

25. “Part of the problem is how people
are rewarded.
In a more pyramid structure, you
get rewarded more by going up the
chain and more zeros on the client
cheques”
Big Four Accountancy

26. How we recruit our people?..
“Entrepreneurs on the whole will tend
to use right brain thinking. Corporate
employees use left brain thinking.
That’s the mismatch”
Global Consultancy

27. Entrepreneurs are emotionally
attached to their business. In
corporates there is no emotional
attachment, just an overarching risk
profile – the risk to me/my career”
Global Consultancy

28. How we develop our people?..
“The sad thing is that our graduates
come in as energetic passionate
intelligent individuals and then we
create, four years later, an android
type person who stops talking to
people.
There is something about the
structure which stifles those
energetic people.”
Big Four Accountancy

29. How we encourage our people to
think?..
“Good relationships challenge my
thinking.
You’re never going to get anywhere
if you don’t challenge your client”
SME CEO

30. How we support our people to
behave?..
“Big companies focus on DOING skills
– functional stuff. How do you do a
loan? How do you do the fact sheet?
What comes out a lot from this
conversation is the BEING skills.
Spending time understanding. We’ve
somehow de-emphasised this”.
Big Four Accountancy

31. The cultures we create?..
“Whether you’re a £5bn
relationship manager or
a window cleaner, it’s all
about the passion for
your job”
SME CEO

32. “It’s all about TRUST.
Yet we don’t understand and
encourage this.”
Global Consultancy

33. Trust is a formula:
competence x sincerity = trust
(i.e. Do I like them?)

34. Left brain thinkers
look for competence
first and THEN
they’ll be interested
in sincerity
Right brain thinkers
look for sincerity
first and
competence comes
LATER (or is a
given)

35. “We don’t address this culturally so
our people can’t engage”
Global Consultancy

36. SMEs crave:
UNDERSTANDING
INTEREST
CHALLENGE
FLEXIBILITY
DECISIVENESS
PASSION
TRUST

37. So, what’s the
answer?

38. Change how we structure:
Smaller portfolio sizes
“..Or they’ll never have enough time to spend with businesses”
“There’s no point in saying ‘it’s about REALLY understanding
their business’ then hitting them with massive sales targets..”

39. Change how we control:
Put decision making in the
hands of the people who
know the clients best – so
they can work FAST
Entrepreneurs want to work with the people who make
the decision. Provide a framework in which flexibility and
speed is possible for relationship managers – within a
framework that is safe for the corporate.

40. Change how we recruit:
Very different relationship
manager profile
Open, interested, passionate, brave, right-brain requires
a new recruitment strategy. This takes time, perhaps five
years?

41. Change how we reward:
Where heroism is recognised
differently
Where relationship and not
immediate return is
recognised

42. Change how we focus:
On growing the client not
selling a transaction–the source
of future value to the bank.
On our strengths – offer SMEs
access to our networks and
knowledge not our product.

43. Change how we lead:
“If you want people to care about their business clients
personally, care about them personally. Have them round
for dinner. Spend time with them”

44. Change who we ARE:
Given purpose and autonomy
adults at work will use their
talent to create value
So let’s let them go ahead and do that…

45. “The world is changing. Millennials
want to be part of the new
ecosystem, the new economy, the
fast cool entrepreneurial businesses.
The groundswell is coming...
but it hasn’t reached the top of large
organisations yet”.

46. think. entrepreneur
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