Asset Based Lending
Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewleadership according to sun tsu
My last article, "You Eat What You Kill", must have hit a nerve. I got over 100 reactions to it, all of them extremely positive. Below are some of the reactions and insights you shared with me, quoted with permission from their authors.
Mark Sanchioni of Webster Bank wrote: "As a former retailer with May Co., I am amazed at the lack of sales management expertise among senior executives in banking. One could argue that although we have worked hard at transforming our organizations, we do not tolerate sales people, the red-headed step-children that they are, in the board rooms. We love the numbers they put up for us, but they don't belong in leadership roles..as if they are full of fluff or sizzle with no true substance or financial acumen. This lack of representation at the executive level, agenda setting and strategic planning causes organizations to get distracted. No one is representing the sales force priorities". I agree this is an important comment, as I 've seen too many management teams sitting around the executive table with many more staff people relative to revenue generating executives. Such composition skews the thinking and decision making at the executive levels away from the heart of the organization's profitability.
Carol Franklin of National Penn said: " I think that we are too often worried about being politically correct and are afraid to rock the boat, or be considered "not nice". Does it always have to be smiles and happy days? This is a business, here to serve shareholders and customers, and sometimes we have to say and do things that aren't warm and cozy... We need to be able to ask hard questions and make hard decisions about our staff. We have a program ... called "Push The Coasters". The Coasters are the folks who show up but only do the minimum they need to do to get through each day. We can't afford to have coasters here...After technology and process efficiencies, all you are left with is your people. And if they are dogs, or coasters, you have a choice: keep them and deal with their inability to give 110% each day, or find a 110% contributor." Amen!
Mike Shryne of M&T wrote: "Any bank that has a clear, well defined sales culture and definitive sales processes tied to direct pay for performance... does, in fact, perform better than those without. My experience is that banks aren't well developed in this area. My experience is ... that 10% of the super performers you can't improve; stay out of their way, reward them and insure you keep them (your lions). 80% of the mid-performers is where you need to focus. These are the ones that, given a sales culture and strong sales process and tools to help them (automation) can lift their sales performance. This is the group that you want to focus your ... investment because a small percentage lift equates to huge revenue gain (your horses) or manage out quickly (your dogs). It is not harsh; it's reality - we earn or perish".
Ben Smith, Chairman of Macatawa Bank, said: " I am slowly changing my opinion on why bankers do so poorly, and I don't realy like my thought. I think bank management is still living in the old world and simply is not up to the task. I think they like their prestige in the communities, their pay, which is usually based upon asset size and has little to do with performance...I also think the way we are trying to encourage sales culture is divisive and is not effective. Yes, a few good performers get all the bonus and the rest wonder what's going on. It is not the individual that makes the team great; it's the heart. And today few work to develop that culture and level of commitment within the employees... We do hold our expectations far too low for some reason, and, of course, struggle to meet even those low goals. but institutions need to understand the dynamics of their organizations and be sure they are focused and committed... All parties in community banking - the communities, employees, customers and shareholders,have a common interest. They collectively can be an awesome force . but when you separate them and focus on each separately I think something is lost.
Smith continued, "I think management is an art; while you can force performance for a while with bonus, the only lasting solution is better management who is truly focused on all constituents and knows how to motivate the team, reward best performers (not necessarily with cash) and improve everyone's performance while holding the bar high". Well said!
Danny Buck of Sterling Bank quoted one of his favorite directors, John Buck: "The longer you nurture and care for a sick horse, the harder it is to shoot her when you finally have to". Buck continued, "Unless we face the realitiies that this is a tough business, then we will be bulldozed right under by the brokerage houses, insurance companies, credit unions, Wal-Mart and everyone else in our business".
Carol McMullen of Eastern Bank said: "In the trust and investment business one needs to build a sales culture from a very strong service culture... It is a delicate balance among building the business and building profit, and taking care of clients, but I believe that the best sales and service people can do that. it is very important that a sales culture support self starters and be a meritocracy, with upside potential available to those who produce. It is clear that underperformers hurt all businesses and should be weeded out, but sometimes it is about finding the right job for that person. "Fit" is important in clothes, culture and work environment. Not everyone is cut out for sales, but everyone can learn that we are all selling all the time. Some people have to ask for the sale, and others support the organization with quality work, upbeat attitude and great service, which permits the sales culture to work".
Dana Lorenson of MidFirst Bank expressed similar thoughts regarding fitting the right person into the right job and thereby giving everyone the best opportunity to succeed.
Scott Laycock of Mid State Bank offered, "At year end 2005 I rewarded my top performers with a "Rhino Award". The Rhinoceros is a symbol of success, a creature of immense strength, force and courage. Rhinos are know to charge through obstacles; make their own trails; by unstoppable; meet challenges head-on; be thick-skinned - arrows, spears and discouraging words cannot penetrate their tough hides; be leaders, not followers, and never back away from the competition". I heard that rhinos sometimes kill lions; I now understand why and how...
Bob Bailey of Bank of Williamsburg added, "unlike our financial services competitors, bankers get paid more if they move into management. Most lions have no desire for paperwork or human resource management, but if you want to increase your salary you must move into management. great strategy: take your top producers and move them to a desk." Well said! he offers an out-of-the-box idea: "I used to dream about a plan of letting a banker open a branch and get paid on the net income of the branch. How many takers would you have? Certainly all lions. So what if they make $200K a year!"
Another banker summarized the situation aptly: "Most banks really haven't achieved a true sales process and culture. Lots of lip service to it, but few have done it. It's hard to do. How many banks have sophisticated sales reporting and aggressive sales incentives? How many cap incentives (Anat: key question in my opinion; uncap and unleash the sales power of your stars). If you want a true sales culture, why on earth put caps on your incentives?" Good question!
And Nat Padget from Flag Bank concluded: "Until we as an industry accept responsibility for performance parameters and set and measure those, we are doomed to feed dogs".
My motto has been: "Kick butt (i.e. be uncatchably first, not just first), no foo foo (i.e. do so ethically and with the highest moral standards) and have fun". Our people deserve the opportunity to soar and achieve beyond their self expectations, and it is our job as managers to give them opportunities where the sky is truly the limit.
Leadership According To Sun Tsu
Sun Tsu lived over 2000 years ago. He wrote a book about the art of war, which proved eternal. While many of his comments have only military implications, his thoughts about leadership are still relevant today and are applicable to many industries, including banking.
Sun Tsu advocates seven tenets of leadership:
In addition to these seven traits, Sun Tsu offers other tips for leadership success:
In sum, the fundamentals of warfare (and commerce) haven't changed much in centuries. The tactics have, as has the environment and terrain, but the secret to leadership and success remain true today as they have millennia ago: set your sights high, lead by strength, discipline and fairness, and don't forget that, without your team behind you, no matter how great you are, you will not win.
Note: Sun Tsu, "The Art of War", is available in book stores everywhere and on the web as well.