It’s About Time for Cultural Change

If you ask bankers in the C suite about their New Year resolutions, you won’t find many who fail to mention time. This year they are firmly resolved to spend their time differently: more time with customers, more time with employees about customers and more time on customer strategy.

At first glance, it’s the perfect resolution. People are our greatest competitive advantage and our biggest expense, so their time is our biggest treasure – and perishable at that. How well we allocate time against our various sets of customers is our cleanest predictor for success.

But the problem with that vow, and the reason so many find themselves repeating it each year, is this: Time-strapped executives look at their over-packed calendars, regret how little time they spend on strategic activities and think their problem is time management. It’s not. The problem is an embedded culture that resists efforts to manage time. No resolution will change that embedded culture.

Before your eyes glaze over at mention of the words “culture” and “change,” there is a successful model for changing a culture – a military model that I lived and learned at West Point. It is based on the inescapable fact that culture is more powerful than any vow or any new set of rules.

Red All Over

We humans generally resist change, even when faced with overwhelming evidence that we should change our behavior. Research studies show that 40% of smokers who survive a heart attack are still puffing away a year later. About 90% of people who have heart bypass surgery or angioplasty fail to change diet and lifestyle significantly afterward.

This cultural stubbornness applies to banking as well. While working as the head of strategic development for a regional bank, I asked the business heads of two large member banks in two states to color code their last two months’ worth of activities, not by importance but by time horizon. That is, red for short-term/urgent items that had to be done on the spot, yellow if the task had to be done within the quarter and green if it involved matters a year or more out.

These executives expected their charts to show something reasonably close to ideal: a little unavoidable red, more yellow, but more than half green. That is, some fire-fighting, but mostly fire prevention. So it was a brutal discovery for most of them to find that 70% to 80% of each calendar was awash in red. These executives were constantly putting out fires that arose from below. Looking deeper into what got painted red, we found that most of it derived from lower in the organization. As these leaders had climbed the ladder, work had clung to them because the bank lacked a methodology – a sustained guiding process – for making the change at each level.

The military has such a methodology and follows it scrupulously. In the military, a promotion comes with a distinct change process, such as requiring the officer to deliberately, conspicuously relinquish previous responsibilities. For example, when you make captain in the Army, you go to the Command and General Staff College and learn that what made you a successful lieutenant is probably going to be your Achilles heel as a captain or major. You learn, “These are the decisions captains make.” You get new tools to assist you in changing you from a great lieutenant to a great captain. When this process is over, it would be almost unheard of for a captain or above to have a red-all-over calendar.

So, a bank executive’s red-all-over calendar signals two culture problems. When the banker was promoted, the job came without clear delineation of the decisions he or she would make and the tools to use in making them. And whoever replaces him or her was likewise insufficiently educated and trained for it, so the old position’s responsibilities went up the ladder with the promoted exec. A New Year resolution to get rid of old responsibilities won’t succeed unless everybody up and down the ladder changes, too.

Fee Problem

A quick example of the problem looks like this (you probably have your own examples): One of our red-all-over bank execs conceded that his daily red tasks included calling back good customers who knew him from earlier in his career and often wanted new fees waived or special treatment. He told us, “We did a good job of communicating up front about our fee changes, had a grace period, and did plenty of training and scripting so that relationship managers were empowered to handle any objections.”

And yet all these calls still ended up in his lap. Why? Because the bank tried to change a rule without changing the culture. The old rule was no fee and the culture matched it: “We’re not the kind of place that nickels and dimes customers, and if they have complaints, we make them happy.”

The new rule was, “From now on tell them there’s a fee for that service.” That’s a big change and it required a big culture change process for employees, who needed to be taken through the change one step at a time: “Here’s why that service gives value, why the fee is fair, why we need the revenue, how much it really costs to waive it, how customers can be reconciled to it and how upper management will support you.”

Instead, by returning the complaint calls and sometimes waiving the fee, the executive basically undermined the new rule and owned the fallout. He had proved the adage that “Culture is what your people see you doing, not what they hear you saying.

So this year, when you look at your vow to spend more time with customers, more time with employees about customers, and more time on customer strategy, forget about time. Start instead with the culture: Precisely what does a customer-focused culture mean for you (the captain, if you will) versus the branch manager (the lieutenant) and the front line (the troops)?

Then take these steps to make it work:

  • Assess what consumes your time against what you now know you should be doing;
  • Have your peers or other top execs do the same about their time;
  • Compare what you find there to the expectations of people a level or two below;
  • If there’s a lot of overlap, probably most of your red work belongs to them;
  • Investigate the reasons their work ends up on your desk. Probe wisely – they might not want to tell you;
  • Resist the urge to “just delegate.” Telling people they have new duties if the culture encourages them to avoid those duties just sends undesirable behavior underground to grow deeper roots;
  • Resist the impulse to add new rules in hopes of getting a new culture.

Change your culture first and your time, and that of your people, will reallocate itself.

Mr. Von Seggern is president of ­­­­­­­­­­­­­­­­­­­­Dallas-based kvCRM, which helps midsized and community banks succeed at CRM Culture Change. He can be reached at [email protected].