Taking the Double Check Challenge at Fiserv

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Mr. Jeffery Yabuki
Incoming President and CEO
Fiserv, Inc.
255 Fiserv Drive
P.O. Box 979
Brookfield, WI 53008-0979

Dear Mr. Yabuki,

Just a quick note from the terra stompers at GonzoBanker to welcome you to the industry.  Sure, we know you’ve been in the financial services industry for some time, but things are about to get a lot more interesting for you. You ever spent a winter in Brookfield?

This week, you were part of The Big News in bank tech geekdom.  We heard last year about the impending retirement of your predecessor, current chief and Fiserv co-founder Leslie “Les” Muma, but no one expected his replacement to be named this year.  You must have impressed the suits around the big mahogany table at Fiserv.  Excellent work.

While you’ve been a straight-up playa at H&R Block for some time now, most of us in the banking world were oblivious to you and your work.  But, according to quotes from current Fiserv execs, you have a reputation for being a gifted acquisition man, a skill that’ll likely come in handy in Brookfield.  Make sure your corporate card has a high limit.  We even read that your former boss, H&R Block’s CEO, lauded your talent for building a rock solid management team around you.  Again, we’re guessing that ability will come in handy pretty soon.

Before we jump into the full-fledged doling of advice, can we GonzoBankers acknowledge the retirement of one of the industry’s truly influential stars?  In just over 20 years, Les Muma helped grow Fiserv from a small, bank-owned IT outsourcer in Florida to a multinational, multi-industry powerhouse with revenues over $3 billion and a market cap of more than $8 billion.  They’re even No. 1 on the highly scientific and exclusive American Banker FinTech 100!!  Given the nature of our business, Cornerstone (our mother ship) was never tops on Les’s Christmas card list.  But we have always had respect and admiration for Mr. Muma and his work.  He will be very tough to replace.

But replaced he will be, right?  Let us be among the first to give Fiserv credit for not taking the safe route.  Most industry onlookers and Fiserv insiders alike expected a senior executive from Fiserv to be promoted to the spot you’re filling.  But Fiserv opted for you, a pretty serious outsider – both a Fiserv outsider and an outsider to banking and bank technology.  That’s a bold move from sure-footed Fiserv.  (Stock analysts eat “bold” UP, my man!)  I’d love to know what you said when Fiserv’s HR chief asked you where you saw your career in five years; it must have really blown her away.

May I call you Jeff now that the formalities are over?  Jeff, let’s not sugarcoat the significance of Fiserv hiring an outsider.  I’m not sure I buy that hiring outside of the industry is going to give Fiserv a broader perspective.  You’re a bit of a coin flip on that front.  You’ll bring a new perspective, no doubt, but a broader one?  We’ll see.  You’ll no doubt be broader in some areas, areas that have arguable relevance to Fiserv, but you’re bound to be narrow on the very core of the Fiserv business.  I suspect that over time you’ll prove to us what that outside perspective will bring to the table.

You’ve been around the block, Jeff.  You know damn well that when the Board decided to bring in a non-Fiserver to run the show, some current senior managers – quality managers – will take flight.  Surely, you’ll want to bring in executives you know and trust, and there is bound to be unrest among current (and overlooked) execs.  I suspect we’ll see a Fiserv press release or two in the coming months that mentions “…to pursue other interests and spend more time with his family.”  That’s where your team building skills come in, si?

Psst…There is something you should know.  Completely understated in Fiserv’s press releases and the mainstream media’s coverage of you taking the helm is the announcement that your CFO, Ken Jensen, will be leaving the company right behind Les.  It is not possible to overstate Jensen’s sphere of influence on Fiserv.  Fiserv’s elite and foot soldiers alike will tell you that Jensen is the blacksmith who swings the ROI hammer that allows (and sometimes disallows) Fiserv units to run as autonomously as they do.  A call from Les Muma makes a Fiserv division head….concerned….curious.  A call from Ken Jensen loosens bowels.  Just so you know.

Every pundit alive and commenting on your hiring has questioned whether you will continue to allow the many Fiserv business units to run as autonomously as they do now.  The Acquire and Back Off model has worked extremely well for many years at Fiserv, but analysts have seen a blip in revenue growth.  So, now the question is, “Is the model broken?”  Jeff, that model is far from broken, but you do have some serious work to do.

The differentiator at Fiserv is not that it lets its divisions run autonomously.  Many vendors – Jack Henry and Fidelity included – let their various product lines run fairly autonomously.  Maybe not quite as autonomously as Fiserv does, but still…..The differentiator is not that the other vendors have done a better job in creating an integrated suite of products either.  Fiserv has as big an arsenal of integrated products as anyone.  Fiserv just doesn’t share that arsenal across product lines like the other vendors do.  No, the Big Difference is that Fiserv lets, even encourages, its divisions to viciously compete against each other.  That is where you’ll have to make some heady decisions. 

Yes, you are going to have to solve the problem of increasing organic growth.  That’s the Speed Stick Challenge for all of the big boys in the bank tech world.  Wish we could help you there.  Below, please find GonzoBanker’s very do-able To-Do List for Fiserv’s new main man.  We’ll limit our list to banking-related products.  You’re going to have some big picture problems to solve.  I don’t see you looking to our 16-person consulting firm for answers to the 90,000-foot questions.  But if you’re interested in a handful of issues that we think you can address and maybe even fix in your first 12 – 18 months, here they are:

Jeff Yabuki’s 2006/2007 Gonzo To-Do List

Product Direction – Fiserv arguably has the broadest product line in the industry, but like any company, product direction could use some fine tuning:

• Big Banks – Define a big bank solution.  You have core products being sold into the $15 billion – $50 billion bank market, but you really don’t have a go-to, clear-cut product that the industry would commonly refer to as the competitor for Fidelity’s (formerly known as) Systematics product.  This might be a new product; it could be a “best of” product comprised of components of several existing products.  Or, it could be a series of vertical products sold as components.  You’re missing opportunity here.
  
• Ancillary Systems – Your broad array of ancillary products is both an asset and a liability.  Choice is nice, but it’s also confusing to the marketplace.  Define a few products as THE product for a given application.  You can still give your prospects and clients choices, but it would help for them to know what the product is for a given category.  For example, is CCS the CRM product at Fiserv like the Sendero suite is the financial package?   Is Communicator the glue that holds it all together for all products? 
  
• Architecture – In order for anyone to buy into a more integrated vision of Fiserv’s ancillary products, it is critical to define and publicize the architecture that will be used for all Fiserv category killers.  I know you have some talented folks working hard on this type of project (the invisible FIAPI), but we’ve seen and heard more plans than results so far.
  
• CTO – Hire a CTO for the bank and credit union market to architect and referee the above if necessary.  If Fiserv has this position already, it has done a fine job of hiding that fact from this team of consultants that is extremely active in your market.

Product Migration – A great asset of your newfound company is the fact that its divisions compete against each other – sometimes, maybe a little too much.  There are times when a bank running Fiserv Product A is going to leave Product A no matter what you, the Product A division chief, the Fiserv sales rep or anyone else says.  You’re leaving money on the table by not making it very easy and affordable to switch to Fiserv Product B.  It can be done now, but it takes some begging, borrowing and stealing to make it happen.  You should consider putting a senior person with some real power in place to strong-arm the process of A to B migration to keep the bank in the Fiserv family.  Tough, yes, but necessary.

Fix the Credit Union Division – You have a credit union division with FAR too many core products, and precious few of those products are successful no matter how you define success.  End the misery of at least half of the credit union core products, raise the ROI hurdle for them all, and come out boldly with the answer to this question, “What is Fiserv’s large credit union product?” 

Buy OSI – Just kidding.

Keep Fiserv Flat – Compared to many companies of your size, Fiserv has a flat org chart.  By all means, keep it that way.  It sets you apart and really does make for a nimbler organization.  Please, don’t create The Matrix.

Find Another Badass CFO – Spare no expense in recruiting and hiring a mega-capable replacement for Ken Jensen.

While this letter has my name and melon at the top, just want you to know that a few of my fellow GonzoBankers – Carl Faulkner, Tripp Johnson, Terence Roche and Steve Williams to be specific – all contributed great ideas for this letter to you.  Our entire team welcomes you to the industry and wishes you luck.  We’ll be watching.  And taking notes.

Catch you later, Jeff.

–The GonzoBanker Team