The latest and greatest ideas of 2016
This is generally the time of year that most banks begin new initiatives in the hopes of increasing profitability or turning the tide of continued losses. Greater regulation over the past few years has also brought about a sharper focus on ways to increase profits. As a result, many consultants and outside vendors are knocking on your bank’s doors, touting the latest and greatest ideas that are nearly fool proof for bringing in new deposits, creating loan growth, or providing new or repackaged ways to increase fees. We’re not against all consultants and vendors, some would say that’s what we are. We would say we’re implementors. But, seriously, if something sounds too good to be true, well, you know the rest. If your bank’s challenges and goals were as easily taken care of as just starting a new program, it seems like everyone would do this and we’d all have ROA’s over 2.0. Regardless, there are many great ideas, resources, and companies out there that may be able to help with your desired programs or initiatives. What you need to do as a community bank is to not become so program focused and end up losing focus on your people. Here are a few things to keep in mind as you’re planning and moving through 2016.
Set your people up for success
Far too many banks have the belief that they can plug their people into any program and it will work. Common sense and the lack of success experienced with most programs tells a different story. Everyone is not going to be a superstar sales person. Everyone can’t make an effective outbound sales call. Everyone isn’t going to cross-sell 10 new checking accounts each week. We believe in the basic concept laid out by Jim Collins in his book Good to Great… Get the right people in the right seat on your bus. Put your people in a position to succeed. For example, don’t require your commercial lender, with a $50 million book, to call 20 customers a day to solicit business. This is a waste of her talent. You’ll just run her off to your competitor. Know the talents and strengths of your people and build a program or initiative around them that will allow each person to succeed.
Track the right thing
Many programs fail because no one can clearly determine its success. The only way to determine success is to properly track results. Make sure your employees know what is being tracked and that the employee has control over and the ability to affect what is being tracked. What to track? Start with results and not activity. Results are real and measurable. Activity tracking can be easily manipulated. Just try setting a goal of making 10 calls a day in your new call program. Pretty much everyone of your employees will hit their goal of 10 calls whether they made the calls or not. Hopefully you caught that. The better way is to track results. The backwards sales philosophy of telling employees that if you do it this way (50 calls equals 5 prospects, equals 1 sale), anyone can sell is just plain stupid. Set a goal of deposit or loan growth such as the number of net new checking accounts opened or opening a new checking account with 75% of new loan customers. Track those results and you can then adjust training and coaching to the individual and her talents to help her achieve the desired result.
See it through
Your best employees need to know your bank believes in something and they need to know and see that you have a plan to implement goals that match your philosophy. Think about the many different programs and initiatives that your bank has started over the past several years or even look back over your career at the various banks you have been involved with. If you’re honest about it, you’ll admit that most banks look like a graveyard of failed programs. We’re talking about the officer call program that never seemed to work out or the so called pitching based sales culture that pays a lot of money but shows no improvement in net checking growth or loan growth. Or maybe it was the mail campaign that was guaranteed to work. Or one of our favorites, open a checking account and we’ll give you a free gift, as long as you’re a new customer. When choosing the program, make sure it fits your bank’s philosophy and stays true to the strategic plan and the culture. When you stick with the program, even when your status quo protectors object, and see it through to sustained results, your program then becomes a process to profitability and will then be a part of your culture. FYI… this will then make it easier to implement the next process.
Avoid the graveyard of failed programs
It’s a certainty that throughout the year you will live through the stress of seeing failures of many new promising programs that seemed like a sure thing. Some banks will just give up and think of creative reasoning and justification as to why it didn’t work. Some banks might then hire a key person from another bank to infuse some new ideas into the system. Then most, a few months later will find their bank right back at square one. It becomes a vicious cycle year after year, leaving you at the mercy of your competitors, the economy, and new regulation. Many banks have gone through this process so many times that their graveyard of failed programs is pretty much full. If you’re tired of being haunted by the graves of the past and you want to add life into your bank and see your best people succeed, then have a plan that fits your best people, track results that your people can control, and believe in your approach to seeing the plan through. Do that and you’ll quickly turn your community bank into a profitable, relationship based organization ready for a great 2016.
