Second Installment: Are Fox(es) Watching Your Bank Hen House?

When I started this blog series, the first fox I focused on was “compliance.” We are keeping that blog, and future “foxes“ blogs,  on earlyandco.com for a while, so you will have the complete set for review. While I have not received any negative responses re: the compliance blog, I’m sure there are some. I believe this to be true: anytime you present a thought to any significant size group, some will probably agree with it, some probably will not. As I go through my list of “foxes“, I would expect the same to be true with each one. Never the less, uncovering the foxes, and briefly discussing them, is an important and helpful thing to do, so we move forward in our discussion.

The second Fox is something I love very much: Marketing.  I was a senior officer and the director of the Marketing, Marketing Planning, and Training and Staff Development divisions of a large local community bank for several years. Doing effective, productive bank marketing was, and is, a personal passion for me.

Continuing under the heading of improving a bank’s overall Performance and Perception, here goes: All marketing efforts, from the efforts of the lowest paid staffer in the Marketing department, to the division head, to the bank CEO, MUST be focused on the bank’s “goal”, NOT on any Marketing Director or CEO’s personal “role”.  From here I could spend page after page amplifying this, but I don’t have the time available to write it, and you don’t have the time to read it. So, I am going to relate a recent personal experience that illustrates that “survival”, particularly “ keeping your job” survival, is real and very much alive.

When I first started Early & Co ( E&C ), I spent days, weeks, months and years on the road calling on banks to develop bank clients. While most of our new clients today come from referrals from other E&C clients, I still make an occasional sales call on a bank CEO to keep my "feel"alive. Recently I sat down with the CEO of an excellent community bank to discuss ways we could help it perform even better. As we talked, he got excited, and since he was excited, I was excited! Then he dropped the "role"shoe:  He wanted to have his Marketing Director call me to discuss it, and he would take her pro or con recommendation on using, or not using, our company. I shuddered. Been there done that. When she called, me, we discussed all the different things we do for our bank clients, and she dropped the "role"comment: “It sounds to me like you want to take my job!” Bingo… realistically it was over. She was into hen house survival “don’t possibly endanger my job" role playing, and she never focused on how she, working with E&C to make her marketing efforts even more effective, could help the bank hit and surpass it’s goal…AND in the process, help her career!

Was she wrong to 100% focus her on her “role” over the bank’s “goal”. I think so, but you decide that. She was the Marketing ”Fox”, watching over her bank’s “Hen House”, protecting her job! The REAL problem , however, was not with her. That problem rested with the CEO…who, while he should do all the due diligence he wanted to do on E&C, and talk with any and all of his department heads related to the areas where we provide assistance…SHOULD be a CEO who looks at the bank’s problems and opportunities openly and honestly, and then takes whatever legal, ethical , and affordable actions he can take to help his bank hit his bank’s goal!   

In recent weeks I have met with two of our client bank CEO’s, each of whom leads the best earnings bank on assets in their state, both being CEO’s who  focus on goal before they focus on role. Making hard decisions to protect the hen house is what leaders in all levels of the bank do. It’s not always easy, but it is always very effective!

Installment three of “Hen House”coming soon.

Are Fox(es) Watching Your Bank Hen House?

We’re all familiar with the old adage,“ Don’t put a fox in charge of the Hen House”! We’d all agree that doing that is a very bad idea. And yet, since the dawn of the new oppressive banking regulations era 6 or 7 years ago, I’ve observed that bank after bank across the country is doing exactly that. This leads to sleepless nights, and daily scratching of CEO and Board of Directors heads wondering why their bank’s earnings and growth continue to suffer!

Well, here’s the bad news: There is more than one fox that may be sitting and gazing at your bank, salivating! The good news is that these foxes can be eradicated if we recognize them, and have the guts and fortitude to do something about them. Today I’m going to briefly overview just one fox, and in future discussions we’ll overview some of their fox siblings and cousins.  

The first fox for many of you: Your almost paranoid emphasis on compliance. Should you stay on top of compliance? Absolutely! Should it become the CEO of your CEO and board emphasis? Absolutely not!!! Never forget that every bank, large or small, local or spread across the nation, should first focus on the two “P’s“: Performance and Perception. If your bank is so focused on compliance that your compliance focus interferes significantly with your bank’s Performance, you have a problem! In many banks today, the bank CEO has effectively allowed the bank’s compliance officer to become the bank’s CEO in critical areas. This affects your bank’s Performance, and your diminishing Performance affects you, your board, AND your customers. Now you have a second problem: Your Performance drop  negatively affects your market Perception.  And your bad Perception then further affects your bank Performance. It’s a Catch 22 which you must avoid, or get out of, as quickly as you can!!!

Compliance emphasis. Where does it fit in your bank? That’s something you really need to focus on so you can develop the emphasis that is specifically right for your bank. For one bank  that I’m very familiar with, the emphasis has been on making a large volume of quality loans to carefully selected key markets, and on controlling bank wide expenses. The result has been that they are the best earnings on assets bank in their state, and resultantly face less regulatory interference than most banks face. Compliance emphasis. It’s a “One size does not fit all” situation. Compliance. You can’t take it or leave it. You can control your focus and exercise more control over your bank operating results! It’s up to your bank to set the course. Every bank has likenesses, and every bank is as individual as a fingerprint. Get the help you need from whomever you need, but get it as soon as possible.

The next blog from Early & Company: Another fox watching the Hen House.

“Gentlemen, this is a Football!”

I thought I had seen it all. After years as a banker directing three of the six divisions of a  $600 million community bank, and now more than 20 years after founding Early & Co, which now helps banks across multiple states with Marketing, Advertising, Staff Training, and Leadership Development, I’ve been amazed by the deluge of regulations reigning down on bankers over the last couple of years. I’ll confess that on more than one occasion, like most of you have also thought if you’re completely honest with yourself, I’ve been briefly tempted to just throw up my arms and surrender! Take me government, take me regulators, I’m yours! Fortunately, I’ve managed to get over it and move on!

Two things always get me back on track:  1) Gentlemen, this is a football, and, 2) Some very wise and sage comments from the CEO of one of my highest performing client banks.

Let’s start with football : When new coach Vince Lombardi held his first team meeting with his Green Bay Packers team…following several years of inept Packers performances…he held up a football, made his famous “ this is a football” announcement, and proceeded to take the team back to the beginning, focusing on fundamentals and performance under pressure. Did it work? The Super Bowl Lombardi Trophy isn’t named for him because he developed the largest number of football plays or complex solutions. It is named for him because he didn’t make excuses, he instead developed the most fundamentally sound performers and winners the game had seen!

Now, the sage thoughts from my wise bank client CEO. After he and I had met for several hours with his bank’s Executive Management Team and listened to their worries and legitimate concerns about all the new and onerous regulatory burdens, he simple stated, “ Folks we’re going back to what made us”, and in essence picked up his “ banking football .“ Over the following months, he proceeded to lead the bank in re-focusing on customer service, appealing new services, making sound and well documented loans, AND the resultant high earnings performance they wanted.  

High Performance Banking. It isn’t Rocket Science, it isn’t complicated. It’s still about fundamentals, service, and performance. Don’t drop that football!

When Common Sense Should Prevail

I recently spent a couple of days in the hospital. Nothing serious…just needed a small tune-up. One of the things I’ve really focused on in recent years is the simple act of observation. Not so much on observing things and beautiful scenery, although I do try to do that, but on observing people.

So as I tuned and turned the volume up on my listening rod those couple of days, I observed that many patients had not figured out one simple hospital fact: Be VERY nice to the nurses and techs! Don’t worry so much about the doctors who come around sporadically. They are important, but the nurses and techs are the ones who do the heavy lifting with patient care and service 24/7. They are often the unrecognized heroines and heros  of our society!!! Show and tell them you genuinely appreciate everything they do, and the great care they give. Three interesting things happen when you do: THEY feel better, you get even BETTER service from them, and YOU feel better when you’ve made THEM feel better! It’s definitely WIN, WIN, WIN.

How does this apply to banking? Well, even more than your board and senior management group, your staff, from the newest to the most veteran contact and non-contact staffers all across your bank, is the group that is really your nurses and tech group. They take care of easy customer situations, difficult customer situations, winey customer situations, appreciative and unappreciative customer situations, happy and unhappy customers, and on and on. They provide your customers with the service they want and need to remain customers, and as a result of doing that, they put food on your table, and a roof over your head. What a group! Are they special? Absolutely! Should you show and tell them you appreciate them? At every opportunity, and minus an opportunity, create one! They’ll be happier, your customers will get the service they want to be happy, and you’ll be happier too! It’s WIN, WIN, WIN for sure!

e-Statements: Why are people reluctant to switch to them?

It is very easy for bankers, and we folks working with bankers, to get caught up in technological developments and assume that everyone else will be excited too. In my personal banking career before I formed Early & Company, our bank introduced many new services that I just KNEW everyone would immediately get excited about. Occasionally they did, often they didn’t.

But e-Statements are so good, why wouldn’t everyone jump on board?

Well, there are several reasons, and I’ll address three of them here. At the top of the list for slow acceptance of this service, and acceptance for any other new service being introduced, is that people don’t like change! You can bring up all the logical reasons to people that you want, and you’ll be effective with some, but many will be reluctant to change. Should that discourage you from working hard to achieve new service and product acceptance? Only if you are willing to accept the status quo, and never achieve the services acceptance and bank earnings results you could have achieved!

A second reason is that people are concerned that their e-Statements won’t stay on line long enough. Research shows us that e-statements really should be available for a mimimum of 12 months, and preferably for 18 months. Even after 18 months, many customers want to know they will be sent a paper statement if they want one for their taxes, or for any other reason.

And, thirdly, customers want to know…and they often doubt this…that their on line statements will be as thorough as the ones they receive in the mail. Add to this the common perception that e-Statements are hard to read, and you see a best case scenario that bank e-Statements would be a PDF exact copy of the actual paper statement.

Well, that’s enough excitement for today! There are other reasons, and suggestions for ways to improve your e-Statements acceptance. Do your diligence and research, and contact us to talk further.