Rebels With A Cause, And A Business Plan

January 1, 2005 10:08 PM

Rebels With A Cause, And A Business Plan

Excerpt: Mr. Kuhlmann and a few other businesses, like Craigslist, the online bulletin board, have adopted strategic advocacy as their business model. Companies that embrace this philosophy don't just try to avoid the wrath of reformers. They aim to fly the flag of change themselves by questioning the standard industry operating procedures. They try to stand out from the crowd by standing for an alternative to business as usual.

AT times, Arkadi Kuhlmann can sound a lot like Eliot Spitzer or Suze Orman. He rails against the banking industry's high fees. He bemoans a financial culture that encourages people to save too little, consume too much and invest too recklessly.

But Mr. Kuhlmann is neither a government enforcer nor a high-profile financial planner. He is the chief executive of one of the fastest-growing retail banks in the country. His operation, ING Direct USA, opened for business in September 2000 and has attracted some two million customers and nearly $30 billion of assets. In the first half of 2004, with 1,000 employees, the bank, a unit of the Dutch bank ING Groep, generated pretax profits of $112 million.

Mr. Kuhlmann and a few other businesses, like Craigslist, the online bulletin board, have adopted strategic advocacy as their business model. Companies that embrace this philosophy don't just try to avoid the wrath of reformers. They aim to fly the flag of change themselves by questioning the standard industry operating procedures. They try to stand out from the crowd by standing for an alternative to business as usual.

In the case of ING Direct, Mr. Kuhlmann and his colleagues say that they aren't just building a bank. They are challenging and trying to change the common and what they call the misguided practices of an entire industry. "We looked around and said, 'The banking business is bust,' " Mr. Kuhlmann said. "The consumer always loses. Then we said, 'How can we do something radically different?' "

The approach is not without precedent, of course. For decades, Southwest Airlines has defied the industry's standard approaches to economics and customer service, and has achieved good results. HBO has become the most powerful creative force in television - and a financial juggernaut - by becoming a force for originality in an industry defined by mimicry. But with so much competition in the market, and so much mistrust in the air, a new generation of companies is embracing and extending the advocacy strategy.

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Momentum Is Gaining for Cellphones as Credit Cards (January 10, 2005)

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Read all 22 posts in the same category of Banking:

Going Online To Balance Family Budget - Feb 17, 2005
Banks Speed Process For Opening Online Accounts - Feb 04, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Momentum Is Gaining for Cellphones as Credit Cards - Jan 10, 2005
Banks Boost Customer Incentives, But Rates on Savings Remain Low - Dec 27, 2004
Online Bill Paying: How To Get Started - Dec 27, 2004
Banks Test ID Device for Online Security - Dec 24, 2004
Paper Checks Going Bye-Bye? - Dec 08, 2004
Check It Out: Incentives to Pay Bills Online - Dec 07, 2004
'Gift Cards' May Come Loaded With Fees - Nov 29, 2004
Where To Keep Your Rainy Day Fund - Nov 29, 2004
What's Your Bill-Paying Personality? - Nov 28, 2004
Debit Cards Lack Protections Of Credit Cards - Nov 28, 2004
A New Era In Banking Begins - Nov 25, 2004
Automatic Debit Scams - Nov 22, 2004
Bank Accounts Fail To Follow Fed's Lead - Nov 12, 2004
ChexSystems Puts Him In Penalty Box - Nov 09, 2004
"Check 21" Starting in Late October - Nov 03, 2004
Gift Cards 04 - Nov 03, 2004
Save Electronic Checks for Your Taxes - Nov 01, 2004

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