Monday, May 17, 2010

Oysters and Pearls. Banking's biggest challenge: Our people.

There is a lot more focus on bank strategy today than at any time over my career. Some of it is regulatory driven, as banks that do not have a strategic plan are being criticized in their exams. So, there I sit, facilitating strategic planning sessions where board members and senior managers dream up the bank they want to be, yet intuitively know they don’t have the right employee mix to successfully execute on their plan.

I recently had a strategic discussion with the head of human resources for a client. She gave the opinion that banking was perceived by employees as a safe industry, and therefore are staffed with those that seek safe jobs. Not a ringing endorsement of the quality of people in banking.

I think she may have a point. Banking has evolved quickly over the past 20 years. Maybe the evolution was not as quick as, say, the tech industry, but quick with regard to banking. The people that occupy critical seats within the bank were bred in a far different banking environment. Strong operational personnel were key, where business development and relationship management may not have been as important to a bank’s success.

Now things are different, yet the people have not changed. I’m not sure we have developed the right mix of finders, minders, and grinders. It seems the key finders are commercial lenders. Minders tend to be branch personnel, who take care of customers once they become customers, and portfolio managers in lending, who also take care of existing commercial loan customers. The grinders are the back office personnel that make the engine run. Do we have the right mix of people to execute our strategy?

I often hear that we lack the finders, and I agree with the point. But if you believe that most new business comes from existing customers, than your minders are also critical to your success. Take my business, for example. Greater than 80% of my company’s new consulting engagements come from existing customers or ones that we did business with in the recent past. Did we get those engagements because of our finders, or because of how well we served them through our minders? There is probably a little bit of truth in both.

I am no expert at this, but in my experience the personality traits of the hunter (i.e. the finder) tends to be different than the caretaker (i.e. the minder), and the button masher (i.e. the grinder). Trying to turn a grinder into a finder is pushing the proverbial rock up a steep hill, and vice versa. You may be able to migrate between finder and minder with the right person, or between minder and grinder. But it seems a stretch to turn an “oyster” into a “pearl” (Jimmy Buffett song reference, see the accompanying video).

The key for bankers is to identify the type of role each position in your organization plays. Is a branch manager a finder, minder, or grinder? If so, does the person in that role have the personality to succeed at it? You can make your decisions from there.

This reminds me of when I coached a girls fastpitch softball team. Softball is different than baseball in that the batting order is developed to move players one base at a time. In baseball, you put your biggest sluggers in the 3, 4, and 5 position. Not necessarily so in softball. We built the order using the “get-em on, get-em over, get-em in” philosophy.

For example, the person hitting second should be strong in “get-em over”, because we put a strong “get-em on” person in the leadoff slot. We then gauged what the hitter’s second strength was, and planned accordingly. The order was designed to give the hitters the best chance at succeeding at what the team needed when they stepped up to the plate.

Bankers should consider a similar philosophy in building their lineup. Much like a sports team, they should also consider continually upgrading by always searching for good outside talent, regardless if a position is available or not. You can replace those lower performers with better prospects, upgrade your lineup, and put your best team on the field. As in sports, the value of your bank is driven by the quality of people within it.

- Jeff

No comments:

Post a Comment