Of all the lessons I’ve learned about innovation and change, one stands above the rest: There is no such thing as an average or old-fashioned business, just average or old-fashioned ways to do business. The thrill of breakthrough creativity doesn’t just belong to upstart companies with the most radical technologies. It can be summoned in all sorts of industries and all walks of life, if leaders can reimagine what’s possible in their fields. In fact, the opportunity to reach for the extraordinary may be most pronounced in fields that have been far too ordinary for far too long.
One inspiring and instructive case in point is what Ray Davis and his colleagues at Umpqua Bank have achieved over the last two decades, in a field that is about as traditional as it gets. Davis took over as CEO in 1994, when Umpqua was a tiny community bank with five branches in Roseburg, Oregon. It had $140 million in assets, was privately held (worth $20 million), and had a plain-vanilla strategy no different from thousands of other community banks. Today, Umpqua, headquartered in Portland, has 300 locations in five states, $25 billion in assets, and a stock-market value of more than $4 billion. As American Banker, the bible of the industry, noted, “Few banks in the country have undergone as thorough a transformation” as Umpqua under Ray Davis, which is why the magazine bestowed upon him a Lifetime Achievement Award.
Most importantly, Umpqua has created a one-of-a-kind relationship with customers that distinguishes it from other community banks. Davis and his colleagues invented a retail experience that appeals to all five human senses: sight, sound, even taste. Umpqua locations host book clubs and yoga classes, serve Umpqua Blend coffee and specially made chocolates, invite merchants to open pop-up stores, become hubs for local businesses and civic groups. Today, Umpqua is a passion brand that stands for something colorful and hopeful in an industry that feels bland and broken.
Ray Davis will soon be stepping down as CEO of Umpqua Bank, so I asked him to reflect on his two-plus decades as a banking revolutionary. What could other CEOs learn from what he and his colleagues have built? What might leaders misunderstand about what it takes to do something this distinctive? What’s hard about sustaining innovation as a company gets bigger and its environment keeps changing? His reflections amount to a game plan for game-changers — lessons for achieving extraordinary things, even in ordinary fields.
There’s a difference between being creative and being reckless. Umpqua stands out in radical ways from the banking establishment. But that has not required big, audacious, risky financial moves. “The level of risk was small as far as I was concerned,” Davis told me. “First of all, if you don’t differentiate yourself you’re in a death spiral, so doing nothing is its own risk. But when it comes to financial performance, we have been consistent and steady, through the best of times and the toughest of times. Being distinctive does not mean you bet the company on any one decision.”
Big change sticks when it’s the result of lots of little changes. There was no “aha moment” behind Umpqua’s dramatic transformation, no single bolt of insight that put the bank on a new course. “Banking had always been such a chore,” Davis told me. “In the mid-nineties, we asked, ‘Why can’t banking become something people enjoy?’ So we tried a few things. They felt good, so we tried a few other things, and it kept going. I’m not sure there’s anything particularly brilliant about what we’ve done. But over time, there’s something brilliant about what this has become.”
The more you change, the more you have to keep changing. Over two decades, Umpqua has built the most distinctive physical retail experience in U.S. banking. Of course, customers now look to their phones, computers, and online apps to for much of their banking needs. So Davis, even after he steps down as CEO of Umpqua, will remain CEO of Pivotus, an Umpqua company based in Palo Alto that is translating the physical Umpqua experience into the virtual realm. “We are building a one-of-a-kind digital banking platform that does not exist anywhere today,” he told me. “We want to take this incredible customer experience and put it on a digital platform.”
There’s a difference between being admired and being copied. Ray Davis and his colleagues are genuine celebrities in community-banking circles, and in the financial-services field more generally. Umpqua is “so highly regarded by its peers,” American Banker wrote, “that bankers from all over the world regularly travel to Portland to study its approach.” Davis has spent time with executives from China, Russia, Australia, and across the United States. Yet as much as these visitors marvel at what Umpqua has built, few plan to build something similar. “I recently had a CEO visit and tell me, ‘This has been a terrific two days, I can’t believe what you’ve done.’ So I asked, ‘How will you apply this to your bank?’ And he said, ‘Oh, we won’t do any of this, it’s way too hard.’” That’s a sobering reality check about the challenges of making change, and a powerful invitation for leaders prepared to rethink what’s possible in their fields. Remember, what your competitors won’t do will surprise you.
As you reflect about what you’ve achieved at your company and with your career, and as you think about what it will take in the years ahead to do something extraordinary in your field, no matter what field you work in, you may want to borrow a page from Ray Davis’s revolutionary playbook. And remember…There’s nothing standing in the way of breakthrough innovation other than your capacity to imagine it.