Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewbranch manager - the toughest job in the bank?
Branch management has never been easy. It’s a tough job, being the first line of defense when customers come in to complain and problem-solve. It’s demanding in terms of people management, especially considering the many staff reductions branches have experienced in recent years. The job is getting harder as we speak.
Branch managers must be able to perform numerous, often conflicting, duties:
• Business development outside the branch
• Operations management
• Fraud detection and prevention
• And, most importantly – managing people, our most precious and impactful resource.
It is an interesting contradiction that, while customer traffic is declining, the branch is evolving toward becoming an even more important source of growing customer engagement, cross-selling and trust. Many branches are stuck in a downward spiral: as customer traffic and transaction counts drop, so does staffing, even if the universal banker model reigns supreme. At the same time, compliance and operational requirements continue to grow, as some banks move certain centralized operations functions back to the branch (including call center servicing). Further, business development and customer outreach programs are more important than ever as branches work hard to justify their relatively high cost base. Also, community banks view branches as one of the last bastions of their strongest competitive advantage – personal service. Branch staff is being used to cement customer relationships and develop an advisory approach to customers toward improved trust and cross-selling.
Today’s branch managers face unprecedented demands with fewer resources, and they must be able to meet these challenging goals. It is unlikely the job pressures will abate. Below are some tips for improving the manager’s effectiveness in this difficult environment.
1. First, articulate your truthful view of the branch network: A cost center (maximize efficiencies)? Deposit generator? Sales center (maximize incentives)?
This is a prerequisite to branch success, and it’s a difficult one. Be clear why you have branches. Is it a necessary evil, something you must have in order to service your customer base? Or is it your best growth channel, a powerful sales tool to grow the balance sheet while deepening customer relationships? Do you use the branches primarily to fund commercial bank loans and service those customers, or are they the keepers of your large retail customer base? Any of these options, and others like them, yield a different set of imperatives to the branch and its management.
2. Use a single rallying cry: Deposits, operational efficiency, balance sheet growth, revenue lift etc.
All too often we confuse the workforce and dilute the message by emphasizing several goals concurrently. I realize multi-tasking is essential. Nevertheless, I believe it is important to focus on one imperative at a time and do so for months, not weeks. Whatever your most important imperative – deposits, for example – it should be the preeminent goal for a period during which the entire retail workforce focuses only on that specific goal. Business-as-usual items such as KYC, compliance and others remain core to the daily activities, but the major drive is a single battle cry that is consistent and system-wide. It’s all about focus and galvanizing the entire group toward a single direction.
2a. Clarify goals and their hierarchy: what is most important. We all have several goals and strategic initiatives each year. Goal hierarchy is appropriate even when they are all important, with the understanding that such hierarchy can change over time within the planning period.
2b. Avoid minutia goals. Goals should be inspiring and demanding. Incremental steps within overarching goals are typically set by branch management to facilitate progress and celebrate small victories.
3. Avoid a death by a thousand cuts (“do just one more thing”)
The perception that branch staff has capacity is true in most cases; it often tends to lead to unreasonable expectations. One commercial banking referral per banker per month may sound reasonable, but when you add to it the one Treasury Management referral, one Wealth Management referral, one Home Equity Loan etc., the expectation becomes unachievable and demoralizing. It’s a trap many banks fall into
4. Appoint a gatekeeper for communications to the retail network
Too many people in your bank have access to a distribution list that include every retail person. Too many departments, most notably Operations and Compliance, communicate with the entire group multiple times a week. The result is information overload and lack of differentiation between what’s important and what is optional reading. Having a gatekeeper to ensure only important communications get through, and to batch-mode specific topics, is important to help your branch managers do their job and avoid unnecessary workforce distractions.
5. Organize campaigns to avoid duplication, confusion, mixed messages and diffusion of effort
Marketing campaigns are designed to be the wind beneath the wings of the retail workforce. They typically support the battle cry and goal focus described above and offer a call-to-action for both customers and employees. Unfortunately, some campaigns are way too long, well beyond the market or workforce focus ability. In other cases multiple campaigns are launched, competing with each other for brain share and shelf space. A disciplined approach to campaign management that is fully coordinated throughout the network is important to maximize marketing dollar effectiveness without overwhelming the staff.
6. Simplify reporting and increase its frequency
We produce too many reports that contain un-actionable information or too much data without analysis and highlights to explain what the data tells us. Branch managers should work with the Retail Management to reduce the number of reports shared with them and their staff. Reports that are shared should be simple, actionable and analyzed so the reader can quickly understand the message buried in the data. Also, important reports should be produced daily or weekly to create a sense of urgency; monthly information lacks that bias for action.
7. Preapprove credits
Branch staff is expected to sell customers products and services they need. Knowing in advance which credit products the customer before you qualifies for is a huge advantage in the sales process, and should be offered whenever possible to the retail staff in the branches. It can be expensive if it doesn’t yield enough sales, but it’s an important tool that can be managed effectively to improve customer experience and salesforce performance.
8. Give managers incentives to help their staff individually meet their goals
Branch managers often concentrate their management resources on a couple of stars within their branch who can lead the entire group to goal achievement and success. Every branch manager should have a personal stake in the success of all their staff. That can be built into their incentive program through a positive spiff (for example, a 10% extra bonus) when most of the staff achieves or exceeds their goals – operational, sales etc. Such incentives will encourage the manager to carefully select, on-board and coach their staff for maximum effectiveness.
9. Match branch managers with branch opportunity
Not all branch managers were created equal, and not all branches present the best opportunity. Matching your best managers with the best opportunity is good discipline that will likely improve your results.
10. Clarify the customer experience associated with your brand
Develop crystal clear expectations of branch staff as they handle customers to yield the experience you’re looking for. We all lay claim to world-class service; how do we differentiate that service in the 1:1, in-person contacts that occur in the branch? Your typical mystery shop questions (Did you stand up? Did you look them in the eye? Did you use their name twice? Did you mention another product? Did you thank them for their business? Did you ask if there is anything else you can do for them?) do not support differentiation, since most of us ask the very same questions. Aim for the feelings you want to evoke in your customers and ask them how they feel post-transaction or advisory session. Spell it out for your own team so they are clear what is the customer experience you’s like to see.
11. Run it like you own it
Ultimately your branch manager is a small business owner. They run a bank and contract services from your centralized units. They have customers, staff, physical plant and inventory of money. Yet, most branch managers do not have the necessary financial information to fully understand the ramifications of their decisions regarding staffing and sales. If you want your managers to be owner-operators, give them the balance sheet and income statement associated with their business. Highlight the controllable costs and revenue sources they have, with the different dollar impacts of various products and services. Coach them on managing the mix of employees and customers ethically and effectively so they have the very best opportunity to succeed.
There are many more ideas on improving the daily life of your branch managers and their staff. It’s an important goal, especially because these are your primary brand ambassadors among retail customers. Remind yourself of the heavy burden they carry. There are many ways they can get fired, but not so many reasons to give them accolades and celebrate their success. Their job requires both right bran and left brain competencies, typically with significant downsides and limited upside. Remind yourself of their multiple, often conflicting goals, ranging from sales and efficiency to compliance and customer care. Give them the tools they need to get the job done, the incentives to direct them where you’d like for them to excel, and, most importantly, the clarity of success.