Dean DeBiase is a best-selling author and Forbes Contributor reporting on how global leaders and CEOs are rebooting everything from growth, innovation, and technology to talent, culture, competitiveness, and governance across industries and societies.
Keeping Age-Old Brands From Brink Of Irrelevance, Obscurity and Decline
By Dean DeBiase
July 30th, 2024
The gig economy, characterized by flexible, temporary, or freelance jobs, often facilitated by digital platforms such as Uber, Lyft, TaskRabbit and Fiverr is booming. Studies show that the number of freelancers in America has been growing by 2 million workers per year and estimated to reach 90 million in the U.S. by 2028—while 46% or 1.57 billion people may already be self-employed globally.
As many of you know too well, “All this is happening quite fast, and more and more people are searching for that flexibility and autonomy,” said Ania Smith, CEO of TaskRabbit, on the rapid rise of the gig economy.
Clearly, the gig economy is not just a pandemic trend but a significant force that continues to change how and where people work—as well as the schedule on which they get paid. Independent contractors (gigsters) are a fast-growing part of the American economy, and the group continues to grow as workers seek control over their time and employers look to fill temporary roles.
Building What People Want Next
Beyond the TaskRabbit’s and Fiverr’s of the world, there are other unlikely big-dog brands who are seizing the moment and rebooting themselves into the center of this gigster market shift. Intuit (INTU), who has invested billions to skate to where the puck seems to be going is one—while another is H&R Block (HRB) whose stock reached an all-time high this week.
Founded in 1955, H & R Block has been around forever, been through many tough reboots, and is now catering to the trends. Best known for helping over 20 million Americans prepare their tax returns each year—Block is now innovating in response to these workforce changes with a transformational reboot that seems central to their future.
With fewer workers getting paychecks on a regular (or even predictable) schedule, H&R Block CEO Jeff Jones—who hails from Target and Uber—saw an opening for an innovative banking solution that offers greater flexibility and lower fees than checking and savings accounts from traditional banks.
Turn Around Leadership Takes An Outsider
When Jones joined Block in 2017, the tax preparer had a solid core business and client base but needed to adapt its business model, offerings and culture to remain relevant to the next generation of customers. The board brought it the right leader at the right time.
Moving beyond consumer tax prep, the company now offers the Spruce mobile banking platform, as well as various small business services, including tax prep, bookkeeping and payroll in local offices under its Block Advisors brand, and online invoicing, payroll, and related services with Wave.
Millennials, small businesses, and gigsters with irregular incomes are among those embracing the new generation of app-based neobanks, as they are free to download and use, and have no or very low account fees, or minimum balance or direct deposit requirements.
Neobanks’ innovative technologies and consumer-centric approach have attracted clients to new entrants with catchy names like Chime, which had 7 million active users as of May 2024, and Dave, which had 10.8 million total members and 2.2 million monthly transacting members at the end of 1Q24.
In January 2022, Block launched mobile banking platform Spruce as another way of providing help to its customers, many of whom were seeing their needs go unmet by traditional banks.
In looking at Spruce—which offers a savings account, spending account, debit card, budgeting tools, free credit score access and help with spending, saving and investing tax refunds—it seems young consumers and entrepreneurs like it. They had 470,000 sign-ups and $852 million in customer deposits at the end of F3Q24, nearly tripling from the prior year.
On a recent episode of The Reboot Chronicles Show, Jones told me that “connecting on modern terms, using different platforms and frankly being willing to break the mold of being a conservative tax company is a real key, not only to our general success, but especially [to] reaching younger consumers.”
AI Rebooting Personal And Professional Projects
Block’s AI Tax Assist product, which debuted during the recent tax season, is just one example. This tool allows customers to ask questions using natural language as they move through the company’s do it yourself (DIY) tax-filing software, and provides instant answers based on the expertise of the company’s tax pros and Tax Institute.
Still, as seen at the major bank branches like BOA, Citi, Chase and Wells Fargo, many consumers and gigsters prefer to talk to a human being—or actually sit across the desk from one—to get their banking or taxes done. You know who you are.
“We’ve got major AI deployments happening right now, the whole business is digital, you never have to go to an office if you don’t want to, but we just see people tend to want to have that personal relationship,” Jones said.
According to company data, last year, half of the new clients who came into a Block office were millennials. Unlike a traditional small business owner, who might have had a single retail store, hair salon or restaurant, these 21st century gigsters tend to be younger, less financially sophisticated, and work more unpredictable hours, resulting in complex tax returns.
Keep in mind, “Just because you’re tech-savvy, doesn’t mean you’re tax-savvy,” Jones continued.
Smart companies often go through uncomfortable transformation periods to create what the market (people) will want next. Many of those brands, who want to stay away from the brink of irrelevance, obscurity and decline, can learn a great deal from leaders who are rebooting themselves into the future—like H&R Block.
