Pulling Together for the Team
During my days coaching high school wrestling and softball, I learned an important lesson. Wrestling is an individual sport where the sum of individual wins and losses determines the success or failure of the team. Softball, on the other hand, is a team sport where the only loss or win is at the team level.
Banking, I found later in my career, is more like softball – a team sport where victory depends on every member of the team pulling together for a common goal. “Corporate altruism” is another way to express this concept. People who work for a corporation must learn to subordinate their individual career goals to the larger corporate objectives. Everyone needs to work together for the success of the company rather than just for themselves.
How’s that working out in practice? Not too well, I’m afraid. From my own perspective, I’ve seen situations where the retail branch executive refuses to transfer high-net-worth customers to the wealth management division even though the data shows that such clients are more profitable for the bank, bring new business to the bank and exhibit greater retention rates. The executive vice president of commercial lending, meanwhile, declines to encourage her direct reports to refer to the investment division of the community bank even though it has been shown that small business owners need advice, most are unprepared for retirement and succession, there is significant fee income associated with the sale of these products and fee income shows up on the bank’s bottom line within 30 days.
These executives were apparently motivated by narrow personal concerns rather than by corporate altruism. And in the process, they miss a major opportunity. LPL Financial, a broker dealer, recently released research data showing that customers who place investments with the bank: a) have 84% more financial assets with the bank than those who have no investments, b) have checking balances 16% higher than those who have no investments, c) use 8.9 banking products as opposed to the 3.1 for noninvestment customers, and d) are 34% less likely to leave the bank than those with no investment relationship.
So what can be done? Here’s an example of how one community bank I’m familiar with moved its culture to a more cooperative stance.
No “Self” Mentality
First, the CEO admitted to himself that the company was not taking advantage of synergy and that a “self” mentality still existed. Next, he and the chairman had multiple discussions as to what their desired environment would look like. These private discussions solidified their vision and determined which executives were or could get on board and which could not. Recognizing that personality change is extremely difficult (some say impossible), they decided to remove any executive they felt could not fully support the new vision.
Replacing these executives, whether with an internal or external candidate, involved many interviews centering on the need for collaboration. It was not an easy or quick process but ultimately the replacements were advocates of interdependence rather than independence and supported the new vision of the company.
Education of the remaining executives was assigned to the CEO with assistance from the chairman. This was an extensive process, featuring lots of open discussion and the development of a common vocabulary. Messaging was crucial because the company had to have one very clear message.
At the same time, a complete evaluation of the company’s compensation, bonus, incentive and goal system was undertaken. All of these elements were revamped to reward corporate altruism rather than individual performance. This process was extremely difficult since the reward systems that existed were traditional and the individuals managing them were part of that tradition. It took many discussions and some hard demands from the CEO and chairman to move Human Resources in the direction that was desired.
Once the executives were in place and their education complete, a single focused message for everyone in the organization was created. This took time and the final step was a series of meetings with the executive team where executives served as the “audience” and asked difficult, pointed and sometimes offensive questions. This exercise hardened the executives to some of the hostility that might occur within the organization. This educational process then worked its way down through the organization along with communications regarding the new system of goal-setting and compensation which rewarded and measured interdependence and collaboration rather than individual performance.
Anyone in the company who failed to “get on board” and exhibit the desired characteristics was terminated (some self-selected out of the company). While this might seem harsh, a culture change requires full support in the organization. And the results supported the effort: the profitability of each customer and thus the company improved, customer attrition declined and ultimately the level of satisfaction among employees increased.
Crisis brings opportunity; now is the time for your organization to change its focus from individual accomplishment to corporate success. It’s time to start acting like a softball team rather than a wrestler. Play ball!