The Orange Code E-Book

Arkadi Kuhlmann

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 476

Veröffentlichungsjahr: 2008

Beschreibung

How championing consumers led to ING Direct's revolutionary rise in the banking industry In an industry dominated by big banks with little patience for their customers, ING Direct has always strived to be different-a rebel with a cause, if you will-and in doing so, they've become the most successful online banking venture in history. The Orange Code recounts ING Direct's intriguing story, explaining the philosophy of its founder Arkadi Kuhlmann-who believes in the power of individuals to control their financial destiny-and his long-running partnership with Bruce Philp, the branding consultant who helped him make ING Direct a cause to its own people and a household name across North America. * Discusses the unconventional approach to business strategy, leadership, and management that built ING Direct * Written by the company's CEO, Arkadi Kuhlmann, the driving force behind this unique company and its approach and Bruce Philp, the branding expert who has worked with some of the world's most well-known and valuable brands * Reveals how the cause of personal financial empowerment has made everyone a winner in the ING Direct story The level of success achieved by ING Direct holds some important lessons and offers some much-needed inspiration to a business world that could use a little of both right now.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Foreword

Acknowledgements

ING Direct Today

Epigraph

Introduction

Chapter 1 - The Guy in the Cape

A Calling

The Guts to Make It Personal

A Powerful Enemy

An Inner Circle

The Possibility of Failure

Chapter 2 - Pixie Dust

ING Direct’s Secret Formula for a Powerful Purpose

Chapter 3 - The Dirty Dozen

Team Building the Orange Way

Chapter 4 - Clicking

Advertising and the Rebel Brand: Three Things Leaders Need to Know

Chapter 5 - You Say You Want a Revolution?

How to Revolutionize a Business Model in Three Easy Steps

Chapter 6 - Saving the Savers

Reaching Out

Simplifying

Having Conversations

Holding Hands

Defending

Chapter 7 - It Takes a Village

The Lesson: Don’t Try This at Home

Chapter 8 - The Money on the Table

Three Good Reasons to Leave Money on the Table

Chapter 9 - Steering by the Stars

Why Celestial Navigation Beats Managing

Chapter 10 - Herding Cats

Seven Deadly Temptations That Can Sink Our Business

And Seven Deadly Sins That Can Sink Our Brand

Three Ways to Keep the Cats Together

Epilogue

Appendix A - Orange Milestones—An ING Direct Time Line

Appendix B - The Voice of Advocacy

About the Authors

Index

ADDITIONAL PRAISE FORTHE ORANGE CODE

“ING is committed to constantly innovating the way we interact with our customers. The Orange Code wonderfully combines lessons in entrepreneurship, marketing, and leadership. A must read for everyone who is building a business and has a passion to stay ahead of the competition.”

—Michel Tilmant, CEO ING Group

“A decade ago, Arkadi Kuhlmann and Bruce Philp started a kind of revolution in the way people think about banks, and now they’ve conspired to make their process and lessons accessible to all comers. The result is a handy compendium, a kind of handbook for the thoughtful revolutionist. Everyone from CEOs to marketing managers will find themselves scribbling notes in the margins, inspired in their own plotting by what this pair pulled off.”

—Erik Blachford, CEO of TerraPass, Inc., and former CEO of Expedia, Inc.

“Life’s business lessons better explained than I ever could at university.”

—Michiel R. Leenders, Richard Ivey School of Business

Copyright © 2009 by Arkadi Kuhlmann and Bruce Philp. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty:While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials.The advice and strategies contained herein may not be suitable for your situation.You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone] or fax [phone].

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com.

This book is exclusively the work of the authors.The concepts and opinions expressed herein originate with the authors, and do not necessarily represent those of ING Group, its subsidiaries, associated companies, employees, of agents.

Library of Congress Cataloging-in-Publication Data

Kuhlmann, Arkadi The orange code : how ING Direct succeeded by being a rebel with a cause / Arkadi Kuhlmann and Bruce Philp. p. cm. Includes index.

eISBN : 978-0-470-45434-3

1. ING Direct. 2. Banks and banking—United States. 3. Internet banking—United States. I. Philip, Bruce, 1958- II. Title. HG2613.W724I545 2009 332.1’202854678—dc22 2008026311

This book is dedicated to all the ING Direct Associateswho are on the Orange Journey.

Foreword

Many people talk about leadership and about starting a business, building a business. These two authors have demonstrated all of it. They are proven leaders. They started a business, built it, and changed the whole game of the industry. Now they tell us the secrets of leadership, of starting and building a business, and changing the game.

Arkadi and his colleagues have identified an uncontested space in the marketplace, and their true passion and imagination has changed the financial services industry and, in particular, the consumer market space. As innovators, they set the standards against which others are being compared. The established players were caught unaware, and some of them are now trying to imitate this innovative model. There are important learnings of leadership, inventing a new business model and changing the modus operandi of the industry.

If you want to learn the lessons of these four major areas, this is the book to read. It is clear, it is authentic, and it is real. I personally have known the story of the Orange Code. I have visited the organization and know its leader Arkadi Kuhlmann. He leads from the front, comes to the point quickly, is an enormous energizer, and has incredible judgment in picking people and building teams.

Leadership has many facets. The ones that are especially critical to the Orange Code are commitment to its purpose, challenging the status quo in the industry, and relentless tenacity to pursue that which makes a difference.

Read this book carefully and judge for yourself how you rate in each of the ingredients of ING Direct—which ones appeal to you, and which you need to improve. Use it as a tool for your personal growth as a business leader.

RAM CHARAN

Coauthor of Execution, Confronting Reality, and The Game-Changer Dallas,Texas

Acknowledgments

From Arkadi Kuhlmann

There is a place and time for everything, and for this book to come to life now was pure serendipity. The Orange journey that Bruce and I embarked on in 1996 started like many others, yet it was extraordinary in the way it rippled out and the distance it covered. Who would have thought a statement like “What if we started over?” would create new ways to look at retail banking? The individuals who joined the journey and helped build ING Direct to what it is today are a unique and great list of characters and personalities.All are great actors on the stage of life. There is no question that, for me, Hans Verkoren, Dick Harryvan, and Michel Tilmant pulled all the pieces together and kept it going. Their professionalism and courage are seldom seen so clearly in business.

The support and perseverance of directors on the Canada and USA boards provided the glue for the unorthodox brand ideas and their translation among all the stakeholders. Eileen Mercier, Ross Walker, Michael Bell, and Michiel Leenders in Canada and Shannon Fairbanks, Jim Mills, Mike Shannon, and Steve Harlan in the United States have provided me with rubber shoes on a slippery rock.

A great deal of the ING Direct story is found in the passion, hard work, and commitment of the leaders who make it happen every day along with the dedicated associates. Jim Kelly, Rudy Wolfs, Peter Aceto, Brenda Ridout, Mark Kocaurek, John Mason, Deneen Stewart, Steve Stewart, and Brian Myres are but a few with whom I have the privilege to serve.This journey belongs to them.

The deep roots for the results and the success of the ING Direct brand are found at GWP Brand Engineering. Philippe Garneau kept sparking and Bruce, the thinker, provided the fuel. Even when the wind died down at times, the GWP team kept adding more wood to the fire. They kept the brand flame alive. It is remarkable that the thread between GWP and ING Direct is pure gold.

Sam Hiyate, thank you.You will make Bruce a famous writer and me a humble servant of the finer things in life. For Debra Englander and Kelly O’Connor at John Wiley & Sons, I hope to live up to the faith that they placed in this book.

An endeavor such as this Orange journey comes with personal turmoil and sacrifice. For all the times I have been away from family and loved ones, I hope this book will provide inspiration for Eric, Monika, Marcus, and Conrad, my children. Finally, Synthia, my wife, has been steadfast and true. Like the spouses and partners at ING Direct, she understood what ING Direct was all about and helped us get there.

There may be other books written about ING Direct someday, but surely none with more passion, truth, and, above all, love. So, Bruce, there is only one thing left to say: You are a good man.

A.K.

Wilmington, DelawareJune 2008

From Bruce Philp

There are no words to express my gratitude to ING Direct for allowing me to be part of this amazing story. Everyone who has touched this business has helped to write it, from the inspiring Associates who make it real for customers to the intrepid people of ING in Amsterdam, who let it all begin. It would be impossible on this page to thank them all by name, but two cannot go unmentioned here: Jim Kelly, who first discovered GWP Brand Engineering, who guided us and protected us from ourselves as we learned to be a partner to ING Direct, and who kept us going with humor, friendship, and unflagging belief in what we were all trying to do. And my co-author, friend, and hero, Arkadi Kuhlmann. His indispensability to this story is obvious. Less obvious to the reader might be his generosity, his willingness to be vulnerable and candid as we put it all together, his trust in me, and his utter authenticity. If there is anyone about whom it could be written, “None of this would have happened but for . . . ,” it would be Arkadi.

My colleagues at GWP Brand Engineering, past and present, have also helped to write this story, from 1996 to today. I have been deeply gratified by their willingness to shed the emotional armor that usually goes with our job and become believers in ING Direct’s cause.Again, it’s impossible to acknowledge them all here, but a few special ones demand mention: My partner and friend, Philippe Garneau, for his role in the story, his support of this project, and his photographic memory. And Debra and Kristin, for covering for me while I worked on this and for loyally, cheerfully, instantly answering every random, impossible request and question I threw at them.

Our agent, Sam Hiyate of the Rights Factory, did so much more than represent us. He was a mentor to me, the first-time, part-time author, showing me the ropes and freely sharing his wonderfully wise, happy perspective on it all.To our team at John Wiley & Sons, heartfelt thanks for agreeing that this story was worth telling, and especially to Debra Englander and Kelly O’Connor for their patience and professionalism in helping to shape it.

My brilliant wife, Linda Courtemanche, was indispensable. She inspired me to see this story as a documentary adventure, read with sensitivity and insight, and soothed my Celtic soul in moments when I wondered if I could do it justice. My children, too, were with me always: Lizzie, who has insisted I should write a book since she was six years old, Brendan, who taught me about “the hero’s journey,” and Rafael, who taught me to swear in Dutch.Your love and humor are the stars I steer by.

B.P.

Creemore, OntarioJune 2008

ING Direct Today

The Business Case for Being a Rebel with a Cause

If ING Direct hadn’t succeeded as a business, there would have been nothing to learn from the experience, and this book would not have been worth writing. Here, by the numbers, is why we think it is worth reading.

After success in Canada, ING Bank fsb was chartered in the United States in August 2000, and launched as ING Direct the following month. Despite troubled financial markets and public distrust of dot-coms at the time, ING Direct welcomed its 100,000th customer and its first billion dollars in deposits within six months.

Today, ING Direct is the 21st largest bank in the United States, ranked by deposits.

It’s the 10th largest direct mortgage originator in the country.

It’s the No. 3 savings bank.

And the No. 1 direct bank.

Of the 9,600 banks operating in the United States today, ING Direct ranks 21st in electronic payment transfer volumes.

ING Direct serves 7 million customers in the United States, located within its actively supported 13 footprint markets and, thanks to the Internet, nationally. It takes care of more than $65 billion of Americans’ savings.

Today, 70 percent of Americans recognize the ING Direct brand.

According to independent surveys, it is both the No. 1 most preferred financial services provider in the United States for deposit products and the one with the highest purchase intent among people who are not yet customers. It is also rated as having the highest customer satisfaction in the retail financial services industry.

Yet the cost of acquiring those customers and of keeping them has been amazingly low. ING Direct’s marketing spending is far less than that of the country’s major banks, and its expense ratio is just over one-fifth of the average for thrift institutions.

It accomplished this in just eight years.

It achieved sustainable profitability in less than two years.

ING Direct employs approximately 2,100 people in the United States, the majority of them in customer service roles. It operates its own call centers in Wilmington, Delaware; St. Cloud, Minnesota; Los Angeles, California; and Seattle,Washington.

Customer service, along with an excellent cup of coffee, is also available at ING Direct cafés in Wilmington, Los Angeles, New York City, Philadelphia, and Chicago.

On an average day . . .

ING Direct Associates will answer 14,789 customer phone calls. They will welcome 5,192 new customers.

They will serve 2,456 cups of excellent coffee.

Customers will log on to our web site 263,143 times.

Customers will use their Electric Orange accounts to make purchases, get cash, and pay bills 49,642 times.

ING Direct ShareBuilder customers will make 10,419 trades.

ING Direct will receive $47,253,000 in net new deposits.

It will fund $29,670,000 in mortgages.

And it will pay $7,173,000 in interest on its customers’ savings.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.

—George Bernard Shaw

Introduction

It was a near miss that, fittingly, began and ended on Wall Street.

It happened so slowly—it took almost all of the 1990s—that the business world hardly seemed to notice, much less feel compelled to learn anything from it. But it left two unanswered questions so momentous that it might not be an exaggeration to say that the future of free market capitalism turns on them. And it has left much of that business world with its hands clapped on its ears, singing “Happy Days Are Here Again” at the top of its lungs so it doesn’t have to pay any attention to these two sullen elephants in the room.

* Throughout this book, coauthors Arkadi Kuhlmann and Bruce Philp will tell the story of ING Direct and provide insights in the first person. Arkadi writes as ING Direct’s founding CEO and the visionary leader who built the enterprise. His words appear in this font. Bruce Philp writes as a strategic advisor to Arkadi and ING Direct from its beginning, and as an intimate observer of Arkadi’s unique leadership philosophy at work. His words appear in this font.

The first question echoes from April 2, 1993, a day that grizzled stock traders remember as “Marlboro Friday.” Like most of history’s train wrecks, it started innocently enough. Philip Morris, tired of having market share poached by generic cigarette competitors, unleashed its nuclear option, cutting the price of Marlboro cigarettes by 20 percent. It would cost the company plenty, management must have reasoned, but it would teach those generics a lesson they would not soon forget. It might have worked; history doesn’t record the business results of this tactic as thoroughly as it records its unintended consequences. Because, you see, Philip Morris’ share price fell 26 percent immediately afterward, wiping out $10 billion worth of market capitalization, share value it would take the company two years to regain. And the trouble didn’t end there. Iconic blue-chip consumer packaged goods companies like Heinz and Coca-Cola and RJR Nabisco saw value evaporate, too—so much so, in fact, that packaged goods companies drove the entire S&P 500 down nearly 2 percent in a single day after the announcement of the price cut. And all of this wreckage was the result of a simple loss of faith: If Marlboro, one of the most famous and studied brands in the history of marketing, couldn’t justify a premium price anymore, then perhaps it was a canary in the coal mine, reasoned the ever-wise capital markets. Perhaps every future dollar of profit attributable to brands was at risk. Perhaps consumers just didn’t care anymore. And in boardrooms across the world, with management consultants circling outside like jackals anticipating a kill, corporate leaders were asking themselves if they should care about brands, either. For all the millions and billions it takes to build one, what good is a brand?

The second question had its genesis barely three weeks after Marlboro Friday, in one of those ironic coincidences that make history so much fun: The world’s first Web browser made its quiet debut, and the Internet age truly began. In short order, of course, it was a gold rush. By the end of the 1990s, the World Wide Web was fully commercialized. It had transformed into a kind of vast, omniscient Yellow Pages, and it was on its way to becoming the mall to end all malls.And building it all were not marketers, or at least not the marketers we’d grown up with. Instead, a new breed of businessperson roamed the earth. Flanked by programmers and more management consultants, they were more than happy to dance on the grave of traditional marketing. Business models were the new black.We don’t need to persuade the mice to be captured, they proselytized.We just need a more elaborate trap, and they’ll capture themselves. For countless entrepreneurs and investors, that trap was the Internet. Business models could be written in ones and zeros, and live on servers somewhere, printing money. The consumer, meanwhile, would be liberated from the shackles of dumb faith in how they buy things and instead be empowered by information.

Apparently, at least some of them were wrong. With the new millennium just a few months old,Wall Street was in chaos again, catastrophically this time. And the worst casualties were among these new economy start-ups, many of which simply vanished. By 2002, $5 trillion worth of supposed market value had disappeared, leaving recession in its wake. And back in those boardrooms, corporate leaders were asking themselves, what is value? Is sustainable profitability even possible anymore? If the consumer is empowered beyond faith, if business models are fallible, if the almighty Internet can commoditize anything it touches, what is the purpose of enterprise?

With two elephants that big stomping around, it was only a matter of time before they would meet.

The invitation came in the form of a modest letter of introduction, inkjet-printed on plain, gray paper from an office supply store. It was July of 1996 when it landed on my desk. GWP Brand Engineering, the company I’d co-founded with two partners to save branding and “invent what will replace the advertising agency” was about 10 weeks old. We were off to a good start, as these things go, with a blue-chip pedigree and a couple of high-profile clients already on the roster, when ING Direct’s dry little note arrived in the mail inviting us to be a candidate in an ad agency search for its “new direct banking venture.” We learned later that a number of the firms invited to participate in the search had not even bothered replying to the letter, because they’d never heard of ING Direct (which says something about the industry my partners and I had abandoned and why), but our little company had seized on the newfangled Internet thing pretty early: A 56k-quick search of the nascent World Wide Web, and we were able to verify that ING, at least, was a real, live, legitimate financial services company. Well, it had a web site that said so, anyway. And it was Dutch. Who didn’t like the Dutch? So, naturally, we took the meeting.

Some lives changed that afternoon, though you couldn’t tell at the time.The meeting went like this:

It was to be an initial get-together, the beginning of a process that we hoped would end with our pitching and winning the account. ING Direct, meanwhile, would decide if it liked the cut of our jib before committing to an invitation to the more formal competition that would follow.We showed up at the address ING Direct had given us, a respectable but anonymous location in downtown Toronto, not in but within sight of the smug towers of the city’s financial district. So far, so good. Exiting the elevator, we found our way to the office suite and to the first clue that this wasn’t going to be business as usual.Therein was a tiny sitting area, grimly furnished with the kind of chairs you’d expect to find in high school vice-principal’s office and, where a receptionist might normally be, a telephone and phone list of nine names and extension numbers. Nine. Okay, sure, this was a start-up. But it was also a bank, a bank supposedly financed by a financial services giant. Where were the leather couch and wingback chairs? The Krieghoff paintings? The soapstone sculpture, the neatly fanned out copies of the day’s papers, the officious, mahogany-fortified gatekeeper?

Or even a sign?

Undaunted, we dialed Jim Kelly’s number, he being the author of the letter that got us here.

“Mr. Kelly? It’s Bruce Philp, and I’m here with . . .”

“Yeah, okay.” Click.

A minute or two passed, and then Jim shambled into the “reception area” and motioned us to follow him. Okay, we’re thinking: No letterhead. No signage. No reception area.And now this man-of-few-words head of marketing, looking altogether too relaxed and unimpressed for the go-go 1990s, never mind the reinvention of banking. We are now officially down the rabbit hole, my partners and I thought. Nor was the office reassuring. It was much larger than nine people could possibly need, which was not surprising in itself. But the absence of furniture and the umbilical cables dangling from the ceiling made the place look, one of my partners observed, like a scene from Die Hard. Jim seated us in the little boardroom (at last, familiar territory, even if it, too, was a bit sparse).We busied ourselves hooking up the laptop computer and video projector while he went off in search of his boss, a man named Arkadi Kuhlmann.

I would love to tell you that we connected with these guys the minute we saw them. I would love to tell you that the chemistry was there instantly, and that the air was electric with a sense of impending, epoch-making adventure. But as I rose to begin my presentation, what looked back at me seemed to be two garden-variety executives wearing an all-too-familiar boardroom expression that always reminds me of the one you see on a cat sitting in a litter box.

One of the reasons we reckoned ING Direct was interested in our firm was that we had, in our previous agency lives, some pretty significant and well-regarded bank marketing experience.With this as our platform, our presentation that afternoon centered on the constellation of challenges this ING Direct thing was going to face getting off the ground. There were obvious ones, like the immense advertising budgets of Canada’s big financial institutions, the fact that with half of Canadians invested in the booming stock market, a savings account was about the last thing on most people’s minds, and how hard it might be to convince people to do business with an invisible bank. But the biggest one, the one we felt was far less obvious (and would therefore make us far more interesting) was the branding challenge. Like most of the world, North Americans, we said, have a love/hate relationship with their banks. As consumers, of course, they loathe them. Like most consumers dealing with oligopolies, people feel unimportant to their banks, and perceive these institutions to be arrogant, self-interested, and pretty much all alike. The symptoms of this arrogance are the usual suspects: branch closings, lousy service, arbitrary fees, badly dressed loan officers, little chains on the pens, and so on.

But ignore at your peril, we said, the fact that as citizens people feel differently. Big banks make a country matter on the world stage. Successful banks make people feel more secure about the economy they themselves depend on. Many, in fact, though they may not give it much thought, might actually be bank shareholders if they own mutual funds. And banks are very much wrapped up in the history of the nation ING Direct was planning to launch in: They built the railroads, they built the skylines of its cities, and, since the nineteenth century, the opening of a bank branch had signaled the legitimacy of countless rural communities. As a foreign brand, we admonished, ING Direct would do well to avoid attacking the country’s financial institutions. Sure, attack their products and the abuses they embody, but institutional bank brands are like your dad:You can criticize him, but heaven help an outsider who tries to do the same. Make no mistake, there is an emotional dimension to the relationship between people and their banks, and it’s not a simple one.

We were adamant, therefore, that people would judge the ING Direct concept not just on its merits, but on the apparent motives behind it.When consumers saw what ING Direct had to offer, their first thought wouldn’t be about the value of the product; it would be to wonder what ING was up to. This, we said, is the job of your brand. Getting something like this off the ground was not going to be a matter of just selling to people, but of inspiring them: replacing the emotional tie they have to the status quo not with logic, but with a more potent emotion. Our closing flourish: “Don’t make becoming an ING Direct customer a negative act of citizenship,” we intoned.“Make it a positive act of consumerism.”

Projector off, lights on. We expected a perfunctory Q&A from the litter box and then, maybe, to slink off to Starbucks for solace and latte. But no. Turning the lights on didn’t mean the meeting was over. It just meant our turn was over.

From the moment Arkadi Kuhlmann opened his mouth, it was clear that he wasn’t going to let the big banks off so easily, railroads or no. With the intensity of a campus revolutionary, he began to enumerate the outrages that these government-protected institutions perpetrated on their customers and on the society by whose grace they existed in the first place. With both rhetorical barrels blazing, he cited the paltry interest people got paid on their savings, while banks focused their marketing efforts on selling consumer debt. He railed against the usurious service charges people were forced to pay, the surly attention they received in return from their Soviet-esque bank branches (if the banks deigned to even keep them open), and the similarly totalitarian lack of alternatives. The way things were, he argued, consumerism was not possible. There was a handful of choices, but there was no real choice. The big banks were, by custom, by statute, by their own collective arrogance, all the same.

I girded myself to say something just about then, but without warning Arkadi leapt from his chair and stalked out of the room. My partners and I looked at each other wondering if this pitch was over, while Jim Kelly grinned knowingly and, pretending to look at his notes, said nothing. Seconds later, Arkadi stormed back into the room with a handful of competitive bank brochures and slapped them down on the table the way an angry father might do with the pornography he’d just found under his kid’s bed.

“Look at all this fine print,” he fumed, fanning the offending brochures out in front of him. “Who do you think they’re in it for? You? Me? Their customers?”

We’d known these guys for only about 90 minutes by the time that meeting ended, but it was already clear that there was a lot more going on here than a “new direct banking venture.” ING Direct was almost a year away from actually launching in Canada, its pilot market. There was a jungle of regulatory obstacles to overcome, technical pioneering to do, and sweaty debate to be had over its brand and its products and how to spend the precious, limited dollars invested by its parent, but Arkadi Kuhlmann was already trying to save the world.

And there it was: a cause. To Arkadi and Jim and their team, though they might not have used these words exactly at the time, this would be their answer to what enterprise is for. ING Direct was going to play Robin Hood to the big banks and empower the average guy to empower himself. It was on a mission to right a wrong, to make things fair, to advocate for people.This enterprise wanted to be a hero, a rebel with a cause.The direct banking thing was just the how of it.They were, to put it bluntly, going to do things backwards: Instead of inventing the business model and figuring out who it was for later, these guys knew who they were going to stand for months before they fully figured out how they were going to make a business out of it. It was irresistibly crazy.And from where GWP sat, the conventional definition of a brand was going to be inadequate and, frankly, paltry here.The brand they needed wasn’t going to be the stooge of some marketing strategy. These guys wanted to start a revolution. Their brand was going to have to be its manifesto, and its constitution.

Crazy as it may have seemed, ING Direct would be in good company, if they could pull it off. When you think about it, the idea of enterprise-as-cause is actually a common denominator for many of the brands we admire most today, and the most successful ones of any era. If we could get Steve Jobs, Phil Knight, Richard Branson, Howard Schultz, and even Walt Disney or Henry Ford in a room, I seriously doubt that any of them would define his enterprise’s success merely as the product of a clever business model. Ask Google’s founders what propels them, and they probably won’t say computing algorithms, not at first.Ask the creators of the MINI or Target or IKEA or Southwest Airlines or Coke or McDonald’s, and they probably won’t say it’s a formula that got them where they are, despite the manifest importance of their systems of operation. We think of these businesses as smart schemes dressed in inspiring rhetoric, and yet closer study suggests the line between the two is not so clear, or so cynical. From the democratization of the automobile to the idea that computers should serve people rather than the other way around, the most successful businesses—not just the ones that made money, but the ones that made a difference—each built themselves around a higher sense of purpose, and then elevated their brand to sit at the right hand of leadership as its spiritual guide.

As answers to those two vexing elephant questions, these ones seem to hold promise, and they seem to be gaining traction in the business world. Look around, and you’ll see a quiet convergence under way in which the wall between a company’s consumer face and how that company is led and managed is disappearing for more and more of them. In organizations like this, leadership, corporate culture, customer experience, and the brand are blending together into a single, much bigger sense of purpose. And if you look closely at any of these companies, you’re likely to see that the key lies in the relationship between its leaders and its brand. These leaders are inseparable from their brands, often create their brands, and sometimes are their brands, and they use them to give emotional power to what their organizations do rather than just to sell what they make.They use them the way a nation uses its flag: As something to inspire, to be loyal to, and to constitutionally guide the company’s conduct, inside and out.They, the leaders, use their brands.

And when they do, everybody seems to win.As instruments of leadership, brands like this make companies stronger. They define, inspire, and help govern the organizations behind them.The people who work in organizations led this way, for their part, seem happier, more excited, and more productive. Meanwhile, from the marketer’s point of view, such an approach to leadership keeps companies perpetually distinctive. Competitors can copy a product, after all, but trying to copy a mission simply looks foolish, and few dare.They also bring fantastic resiliency to those businesses, a stockpile of benefit of the doubt that lets a company try new things and even make the occasional mistake without lasting reputational damage. And, finally, for consumers, doing business with companies like this is, in an age of drearily predictable functional competence and browbeating salesmanship, a breath of fresh air: something to believe in and bond with in some small but satisfying way. Instead of the more typical adversarial seller-versus-buyer dynamic that marketing often devolves to, organizations that are led this way become one with their customers, in it together, out for the same thing.

Still, opinions about leadership and branding are like belly buttons these days. Everybody has them, and no two are the same. And neither leadership nor branding is an objective science just yet. Inasmuch as consumers and business leaders alike might agree on who today’s business superstars are, debate among pundits will always rage about why, with history conveniently providing evidence to support almost any point of view you’d care to blog about. And that’s what made the ING Direct opportunity so intoxicating and irresistible for all of us in that summer of 1996. This was its seminal moment. It was pure. There was nothing retrofit about it, no revisionist mythmaking, no “yeah, but’s,” no corporate nanny to take the edges off. There wasn’t even a particularly favorable set of market conditions for it, given historically low interest rates and a booming stock market. It was the ultimate test of what we believed then—and with even greater conviction today—to be the noblest purpose for an enterprise: advocacy. And here, on the cusp of a new century, with economic chaos all around us, and seismic changes in media culture happening at the speed of light, we were going to be part of a vast experiment that might categorically prove it.

Which, of course, it did. By any rational measure, and certainly by comparison to the forgotten others who attempted to launch “virtual” banks of their own during those “irrationally exuberant” years, ING Direct made some history. At this writing, it is the continent’s largest Internet bank and one of the largest savings banks in America, and it defied expert prediction by becoming profitable within a couple of years of its launch. It also created a product category where none existed before. It is studied at the world’s most prestigious business schools, it is a model for what became a global brand with 20 million customers in nine countries, and it is the most successful online banking venture in history.And maybe these things alone make the ING Direct story worth telling. But they are not the only reason we want to tell it.

The Orange Code takes its name from a document that emerged very early in the history of ING Direct, one we’ll talk about in depth later in this book.The original Orange Code was created to be a sort of ethical road map, a promise ING Direct made to itself about how it would do business. It has become very influential in this role—every Associate has a personal copy and many could probably recite it from memory—and it has come to reside very close to the soul of the company’s culture. But the Code isn’t just important for the job it’s meant to do; it has also mattered because it exists at all. Claiming to have a cause is not, by itself, a new idea in leadership or in marketing. Countless organizations have done it as a tactic, but usually rhetorically and without much conviction. ING Direct went two steps further: It attached this internal code of conduct to its mission so that every behavior of every member of its team would serve it every day, not just when it was time to address shareholders or write an ad. And then it made customers complicit in that promise by embedding the spirit of the Orange Code in the ING Direct brand, effectively transforming those customers into watchdogs who would keep the enterprise honest. If that sounds like a familiar formula, you don’t need to look far for a role model: A sense of purpose for the common good, a set of rules about how that purpose should be pursued, and public transparency to ensure its integrity—these together resemble a formula for nation-building that most of us would probably agree is the best humanity has so far devised.

Of course, we realize that the idea of a business as a cause, with a brand as its constitution, might seem idealistic and even naive in theory. For ING Direct, being a bank of all things, it was certainly radical and risky besides. Yet here we are, more than a decade into it, and it has worked, and it continues to work, last year, last month, this morning. It is not theoretical anymore, and we think that its story might offer some lessons and some inspiration to a business world that could use a little of both right now.

These are, after all, pretty interesting times for leaders, their organizations, and their brands. You can hardly pick up a trade journal or a business publication, or stroll through your neighborhood bookstore, without seeing someone expounding on the perfect storm in which the marketplace finds itself: here, a cynical consumer whose credulity was squandered by corporate malfeasance and stupid advertising; there, a media industry fighting for its life as audiences shrivel and scatter and become impossible to reach with selling messages; over there, a global economy that threatens to commoditize each and every commercial idea almost as soon as it is hatched; and presiding over it all, a capital market that seems at a loss to figure out what value really means.The answers to those elephant questions might seem pretty discouraging. Maybe brands really do not have any power anymore. Maybe the purpose of enterprise really is, as a marketing professor once admonished me, only to make money by whatever legal means it can.

And yet people came to ING Direct. It has been hard to deny, living through this experience, that consumers still want to believe in what they buy, no matter what they tell you over sandwiches and soda in focus groups. It has been hard to deny that employees want their work to matter, to have a good purpose, no matter how grumpy they may seem on Monday mornings. And it has been hard to deny that there is more to enterprise than profit by any means, or that a brand’s purpose, far from being diminished by all this consumer empowerment, is higher and more vital than it has ever been. It has been hard to deny these things when they have conspired to build a sustainably prosperous business, and especially when that business is a bank. Few industries suffer from such a deficit of consumer love as banks do; few industries are so systemically cynical. And yet people came.

That is the real reason we thought that this story needed to be told. Because if it can be done in banking, then maybe it can be done in any business.

The Orange Code is the story of ING Direct, told from two perspectives: that of Arkadi Kuhlmann, the visionary firebrand who conceived it and championed it by sheer force of will from day one, and of me, Bruce Philp, the cerebral one, the one who thinks too much, who was privileged to be a trusted adviser and to help give this brand its voice and its place in the world.What we share, besides friendship, is that we both left broken status quos—he, banking, and I, advertising—while we still had faith and energy for the idea that it is possible to prosper by standing for something.

We were not disappointed.

Chapter 1

The Guy in the Cape

Leading from the Front

I only have a quote to share with you today: “Your job as a leader isn’t to keep people happy; it is to generate disequilibrium and keep them productively uncomfortable.”

—AK, CEO Message #20

BP: Fast-forward eight years from our first meeting in that abandoned office space where ING Direct was born. Arkadi Kuhlmann and I are on a train leaving New York’s Penn Station, bound for Wilmington, Delaware, headquarters of ING Direct USA. The Canadian experiment had been a historic success, and he’d been invited to the United States back in 2000 to do it all again, this time in the world’s richest and most competitive financial services market.And just four years on, it was already happening, even bigger than the first time. Now, by any measure, he is a player: the CEO of the fourth largest deposit institution in the United States, a high-profile bank executive who made lightning strike twice. In most corporations, he could now write his own ticket. But, as the train clatters its way through the Northeast’s gritty heartland, we aren’t talking about golf or stock options or career strategies. He is telling me how difficult it is for economically marginal Americans to get a simple bank account. He’s fulminating against the predatory lending practices of credit card companies in the United States, and their bait-and-switch marketing tactics. Seemingly with little left to prove, his evangelical fire is undimmed. Arkadi Kuhlmann is still trying to save the world.

In almost three decades of working with organizations to build their brands, I’ve met a lot of CEOs. They’re a different breed, but they’re by no means all the same. Some have been bureaucrats and professional managers. These are the bosses whose skill is operating the human machinery of an organization. Some have been technically superior practitioners of whatever it is their organizations sell. These are the bosses whose authority comes from being the best at what they do, and whose leadership is about setting a professional standard. And a few—the best of them, from a branding point of view, at least—have been charismatic leaders: the bosses whose authority comes from an inspiring and genuine sense of purpose, a purpose not served by the status quo as they see it. Where managers want continuous improvement, these leaders want to start over.Where an established order wants to evolve, these leaders want to revolt.They’re the leaders who leave the world different than they found it, the ones who permanently change the game.

It’s the most dangerous way to lead. A CEO like this is always a target for cynics, outside and inside the organization.A CEO like this has to depend on moral suasion, and not the more common Skinnerian carrot-and-stick approach, to make people show up in the morning and get the job done. And a CEO like this can never afford to have a single inauthentic moment. If they get caught out of character, their authority vanishes instantly.Think philandering televangelist or gambling baseball hero, and you get the idea of how hard and how fast they can fall. Yet, as thin as the ice of moral leadership always seems to be, it’s always these bosses who make history. Whether it’s nation building or selling lattes, personal computers, and cheap airline tickets, the chief executives who end up having the most lasting impacts are the ones who were on a mission to make people’s lives better by turning the status quo upside down. Sure, they all spend their days in the management trenches as any boss must. But these people, as the Oscar Wilde cliché goes, always seem to be looking at the stars.

The ING Direct story simply couldn’t be completely told without an honest look at the motivating role that leadership played.There probably wouldn’t be a story at all, to be frank. ING Direct declared itself a rebel with a cause in an era when elaborate business models were more the fashion, when entrepreneurs spent more time with venture capitalists than they did with consumers, and when being clever got more attention than being authentic. Between this and the fact that nobody thought at first that consumers would even want what we had to sell, it was obvious that no mere manager was going to make this idea fly. And certainly the boss’s job couldn’t just go to the best banker. Bankers were, after all, the enemy. So the job went instead to this animated guy sitting across from me on a southbound commuter train, telling me how Americans prize freedom above all, and that the surest kind of freedom is to have some money of their own, quietly growing in a savings account.

Are success stories like ING Direct just cults of personality? Do stories like this happen only when fate decides to put the right person in the right place at the right time? Those leaders themselves might fear so, at least privately. But I’m not so sure it’s just coincidence. Organizations don’t decide to start revolutions; people do. And they begin with one person, a leader, someone at once bigger and more human than the cool, pinstriped alter ego they seem to show the world. For more than a decade, I’ve been in a unique position to both observe Arkadi’s leadership firsthand and, just as important, observe the effect of his leadership on the way his organization behaves when he’s not in the room. From this vantage point, it’s not hard to deconstruct ING Direct’s founding leader and find a template that neatly fits the most transformational leaders in modern corporate life, and certainly describes the man who led the charge at ING Direct. From this observation—and a certain amount of interrogation during the writing of this book—it seems to me there are five fundamental things that it takes to be a leader of a company that is a cause.They aren’t all from the standard CEO playbook, and they aren’t all easy or warm and fuzzy. But they are what it took to bring ING Direct to market and grow it profitably, against all odds.

A Calling

BP: Which of the following corporate vision statements would light you up? Which would make you most want to join the team?

Try this one: “ING Direct is a virtual bank that deploys technology to efficiently deliver retail financial services to its customers and passes the costs saved by that efficiency on to them in the form of superior interest rates without fees or service charges.” It’s an accurate description of the business model, but did it thrill you? Did it make you want to sign up as an employee, or go online and give ING Direct your nest egg? No, huh?

Then how about this one: “ING Direct wants to lead Americans back to saving.”

That statement was seminal for ING Direct. In every sense, it was a spiritual beacon for the enterprise, a strategic true north as they built the bank, from day one to today. And it mattered not just because of the nature of the mission it described—inarguably a worthwhile thing to do—but because it was a mission. Inherent in the moment those words were scribbled down on a whiteboard somewhere, a decision was made that the idea behind this bank wasn’t just a revolutionary business model, but a business model in the service of a revolution.

The truth is, though, it didn’t start out that way—not exactly. During ING Direct’s earliest days in Canada, its advocacy for consumers began and ended with its product, a high-interest savings account. In a market where there had never really been consumer choice before and where banks were paying next to nothing on the money savers were salting away, it seemed like enough: empowering choice, and a better product. But Arkadi is not a corner-office CEO. Then as now, he liked to take regular shifts in the ING Direct call center, staying close to the business, serving customers.And they, as it turns out, were the real inspiration.The revolution began not in a boardroom or in some mountaintop epiphany, but at a call center workstation.

AK: It’s true—my emotional investment in the ING Direct brand came from working the phones in Canada. That’s where I found our true purpose. I got to hear, firsthand, what people were dealing with when it came to their money, and I found myself identifying with that. I got converted by our customers. By the time we went to the United States, I knew what we had to do. Now, it just needed a battle cry: leading Americans back to savings.

In the summer of 2000, we were working on the advertising and marketing for the U.S. launch of ING Direct. Lots of creative ideas swirled around the room and with the advertising agency we were working with in the United States at the time. A number of shirtsleeve working meetings in a hotel conference room saw the discussions going around in circles. I had already drawn the ball icon on a napkin a few weeks earlier, but something was missing. We needed a point of reference. Someone said, “In Canada, we used ‘Save your money’. Well, that is what we want Americans to do, too.” But how would they see this approach? As preaching? As protesting? If it was really good for American consumers, then we should say it plain and clear. So let’s . . . lead Americans back to saving! Right? Yes, they used to save. They were self-reliant. Families stuck together and taught their children about money around the family kitchen table. Okay. We would go after those same sentiments and support them in all our messaging and actions.

It then got really easy. Do good and make saving cool and smart for Americans just like you and me. This was a real democratization of money. And here was the next big thought: “Main Street.” Now, I could picture the ideal customer. The story line and the products fit together, aligned to a consumer who had been misled or abandoned by so many financial institutions and now needed a positive message. There would be no bashing, only talk about good and helping everyday people by providing them with what they really needed and wanted—a simple way to make their money work for them.

For me, the day brought closure to the worries about how we would fit into this marketplace and why we should build a new type of bank. If Canadians were subdued in their response to a new approach to everyday banking, Americans would be a lot more vocal and exhibit stronger views. We certainly could not change messaging when so much marketing money would be spent on building a brand. The key was getting the message out and finding new ways to explain the same money values in a way Americans would understand.

Of course it did not stick from day one. There were a few weeks of back-and-forth over this vision. Do we need something better or is there a higher ideal to talk about? And if we were leading Americans back to savings, then how would we help accomplish this? That debate was even tougher. Good service, good prices? Everyone claims this, so we would just not be believable. So, instead, we would simplify. We would make our products simple, allowing customers to save time and money. I really believed that this would challenge us every day to be an enterprise of continuous improvement. It took many weeks to sell this to the staff and embed it into the staff orientation and the sales and service platforms.

Things were taking shape. Each of these steps to organizing the thoughts behind the business gave me energy. I felt that things were clicking, and this confidence was contagious. At times it felt like a party every day. Problems were sorted out, and the tests of will when new people joined us were manageable. I had always wanted to serve and to make a difference. For me, this direction was natural. I wanted to be on the side of the angels and did not worry when I was accused of being Pollyannaish. I felt confident in the vision and the mission, and it fit like a good glove. Another thought stayed with me: If we were to take on the big players in the United States, we needed to be a rebel with a cause—daring, brave—and be willing to gamble everything on it. The brand mission sure had these qualities. The first year was good.

BP: For Arkadi, a calling like “leading Americans back to saving” makes the leader’s job description pretty simple.

AK: For a company that is built on a cause, shaped by and with its brand, the leader needs to carry the torch. Our credibility in the marketplace and the confidence of the people we employ can work and be sustained only if the leader can lead a company of people. We too often forget a company is fundamentally a company of people. The passion, the personal sacrifice, the belief that the cause, expressed by a vision, is real and can be actualized must come from the leader. Our personal as well as business experience is such that all people, including consumers, gravitate to a leader who will succeed—one who is on the right path and doing good.

My job is to take uncertainty out of all situations and remove doubt. You will follow someone only if you agree with them and are convinced by them, but most important if your belief is reaffirmed. I know good people can do great things if they can take risks that are worth taking, believing what they’re doing is right and that it does good. It’s the journey, the battle, that makes us human, but more than that it makes each of us count! I am privileged to serve, to earn my role in this venture and its cause every day. Win or lose, I know we have made a difference. I do not need the speeches, plaques, or awards. I know.

The Guts to Make It Personal

BP: When people judge the leaders of organizations like ING Direct, the difference between a cynical opportunist and the real thing resides in the character the leader came with.Yes, the leader’s got to have a calling that motivates the enterprise, but it’s just as essential that this calling comes from a real place. Otherwise, the “calling” can seem like a marketing invention, and the boss’s moral authority can be pretty fragile and the leader two-dimensional. The boss can’t be a creation of the mission or a shill for it; he has to be its author, and who he is as a person has to authenticate it.

Arkadi Kuhlmann probably wasn’t born to start a bank, but those who know him well believe he was sure born to start something. His life and career have been a study in the power of positive disruption. ING Direct’s chief information officer, Rudy Wolfs, on the team since 1999 and a man Arkadi calls “a true warrior,” characterizes his boss as “a consistently optimistic contrarian”—never satisfied, yet never discouraged.