Perfection isn’t necessary in the banking world of mediocrity
We don’t live in a world of lolly pops and fairy tales. As much as some community bankers long for the perfect convergence of having the highest deposit rate and the lowest loan rate in their market, along with mythical customers that walk in the door every few minutes asking for the perfect products to fit all of their needs, being helped by a perfectly staffed office of smiling employees, one for every customer, while the branch manager and senior executives sit back in an office isolated from the world, counting the money and high-fiving each other for their 2.0 ROA. That day never existed and never will.
Perfectionism is a myth. The good old days weren’t exactly what they have been made up to be. Every banking era has had it’s challenges and today is no different. Just as in the past, when we had great banks and we had loser banks, today is the same. Some community banks are struggling and some, not enough, are thriving. However, what is unique today more than any time in the past 25 years, is that the best and smartest community banks have very weak competition (see our Greater New Orleans Customer Service Survey) and an almost perfect opportunity to distance themselves from any perceived competition. What’s so perfect about the opportunity? There are some banks that are actually near perfect in a few areas. Sadly, some are near perfect in all of these areas.
Perfectly Lazy
A community bank that doesn’t deliver real and measured customer service that is significantly better than the larger banks, is just plain lazy. Our latest market survey in New Orleans showed that over half of the community banks ranked lower than the large banks in handling the telephones. This is a clear indication that the same is true when customers visit the branches in person. In New Orleans market survey, its important to know that the top 5 banks were happy to be on top and beat the large national banks, but it shouldn’t be a comfort zone. A and B scoring banks can continue to improve. C banks should be looking at ways to improve their customer service and get on a path to reaching those top performing banks before they find their way to the Ds. When the typical community bank brags about their great service and posts brand statements on their website and marketing materials and then fails to deliver on something as simple as a phone call, no other conclusion can be made. You have lazy leadership and management which creates a culture of laziness. Are you curious about how you stack up in your market? Let us know and we can conduct a survey in your market.
Perfected Status Quo
A community bank that is clinging to their storied past and the way they’ve always done it, is the perfect model of the status quo. These banks usually have a few key status quo protectors, often on the board and executive management team. It only takes a few to derail any innovation and positive change. In these status quo protectors’ minds, things are perfect as long as their influence and power base are maintained. Bank profitability and being the best in their market is not a priority or even a goal. As long as this small group can keep the bank in business and the regulators at bay, while maintaining their position, then nothing else really matters. It sounds crazy, but these people have been living in crazy town so long, it just seems normal and comfortable to them.
Perfect Excuses
It’s bad enough when bank employees make excuses (see the top 10), but it’s just sad when the bank leadership makes the excuses. When leadership begins to make excuses, it doesn’t just filter down, it floods the corporate culture to a point where your best employees give up and become disengaged, the worst employees are empowered, and mediocrity reigns supreme. The worst excuse we’ve heard from a community bank is that their employees weren’t smart enough and good enough to move the bank forward and at the same time they believed they had the best people working for them that their community offered. It kind of tells you what they think of their customers. We also hear from some banks that their customers or market is different. There’s about a 99.9% chance it isn’t. Odds are there is a Walmart, a dollar store, a gas station, a few relights, a church or two, a post office, a few strange neighbors, and maybe even a McDonalds. More than likely, their market is pretty much the same as every other community bank’s market in America. Excuses are just the perfect reason not to do.
Go for Remarkable, not Perfection
It’s a guarantee that every market has community banks that are near perfect in one of the three areas we just discussed. Separate from the herd of these perfect losers and strive for remarkable and your bank will very quickly dominate the market. Here are just a few ways to move up the road to remarkable.
- Establish non-negotiables for working in your bank
- Set minimum standards by position
- Hold your managers accountable to hold your employees accountable
- Monitor and track your customer service
- Track, recognize and reward your best employees
The road to remarkable is not complicated but it does take discipline, consistency and a belief in the process to get there. The road to the fantasy land of community bank perfection is one frequently traveled and the exit signs are well hidden by design. If any of these perfect scenarios exist in your bank, contact us, we have a map to all of the exits.
