Building Your Community Bank Performance Culture in 2009. Part Two

By Ron Buck, President,
SMH Consulting Group

The Bridge to a Performance Culture

Our research with more than 1,100 branches during the past four years has revealed five transformational components crucial to the development and sustainability of a Performance Culture: people, process, strategy, leadership, and technology. When each component is in alignment and seamlessly blended together, a transition begins to occur from a sales environment (focused on products) to a performance environment (focused on customers).

People…the Foundation of a Performance Culture

The biggest challenge encountered by the highest performing organizations as they transition to this next level is ensuring their existing workforces “sign on” and receive the requisite skills and coaching. The right hiring practices, updated training, practical tools, and compensation systems form the necessary foundation.

Task and role clarity are critical and new accountabilities defined in clear behavioral terms tend to make the greatest difference. This change in job expectations and accountabilities goes beyond the front line to the highest level of executive management. One key to certain cultural collapse is for the CEO and all other executives to sit on the sidelines and cheerlead while expecting others to get their hands dirty. When lack of total commitment occurs at the top, the process eventually becomes the “flavor of the month.” This causes untold budget dollars to be wasted on “training events.”

New expectations and accountabilities reflected in the performance management system help sustain traction. For top producers, this means setting minimum performance thresholds and specific performance goals. Our highest performing clients have migrated from strictly production-based incentive programs toward value-based programs with key metrics for performance improvement. Some very forward-thinking clients have gone to balance sheet performance measures in which bankers are responsible to achieve certain revenue numbers versus worrying about selling widgets. We’re also seeing variable pay rising to 25% or more of the associate’s compensation.

Process…the Mechanism That Creates and Sustains Change

Top performing clients have adopted a sales process and that process is interwoven throughout the organization. No one is exempt. Unfortunately, many banks still adhere to a loosely structured sales process or have none at all. In a recently completed joint study, CSO Insights and St. Meyer & Hubbard found 66.6% of financial services respondents had a random or informal sales process and only 13.6% held associates accountable for a dynamic sales process. In our 2008 Business Banking Study we found:

• 42.9% of banks had no articulated sales process
  
• 26.5% of bankers did not know if their banks had an articulated sales process
  
• 30.6% of sales managers did not know their banks’ sales process

Process changes typically “stick” with the adoption of a new set of sales management accountabilities. They include:

• Strategic team meetings—commercial pipelines, retail huddles, and skill-builders
  
• Check-Ins (manager to subordinate, up and down the food chain)
  
• Observations of sales conversations in the branch
  
• Joint calls in the field
  
• Behavioral coaching
  
• Feedback about pre-call planning, post- call reporting, and value generation

These activities are optimized when there is an agenda and a consistent follow-up approach. Without follow-up, these components simply become “tick marks”, which help no one but do a good job of wasting everyone’s time. An example of that comes from a recent senior management survey indicating their belief that fully 50% of meetings brought no value to participants. Unfortunately 70% of managers indicated a lack of knowledge or will to change the meeting format.

Technology…the Productivity and Conversation Enabler

Tracking, measuring, and reporting the right things are the most fundamental requirements of a performance culture. Paperwork stifles the culture and the list of quality technology vendors to collaborate with to improve productivity is unending. One key is to understand what each provider can do to meet your needs and then consider what you want them to do, based on budget constraints and other issues. Many senior managers we talk with believe CRM or SFA is the total answer—sales nirvana. It is just the beginning.

We don’t sell software, but one thing we suggest when a bank engages us to help with that buying decision is to make certain the system can be tailored to the needs of the bank—today and tomorrow. We also look at issues around Event-Based Triggers, the ability to link the software to actionable scorecards and the capacity of the system to easily facilitate coaching conversations. Care should also be taken to be certain that all systems synergize for the benefit of the customer. We know several banks that have two, three, four, or more systems that don’t talk to each other, forcing the Personal Banker to toggle from software to software when they open a new account. There are also other issues (like timing-out) causing enough frustration that PBs told us they simply don’t use the systems when they are interacting with customers.

Finally, technology is not an island and, too often, financial services firms do not consider how their systems should be interwoven into sales and sales management training. One key to building that elusive Performance Culture is the connectivity of training, technology, process, and strategy to and through each other. When the associate sees no benefit to inserting data into the CRM or SFA, the technology becomes a “big brother” approach and eventually the system is scrapped or, at the very least, not utilized.

Executive Commitment…the Cultural Driver

In our work we find congruence to be a consistent issue. There is an all-too-common significant disconnect between what top executives say and what the front line experiences. Though many executives suggest the strategy is relationships, trust, and partnerships, when the front line is asked what message is heard from the executive suite, the reply is: “sell more to more people more often”. This highlights the need for executive management to align strategy with the messages conveyed through goals that are set and how “results” are measured.

Executives have an important role to play as leaders—incorporating the sales strategy into their daily actions, coaching their direct reports, mentoring desired cultural behaviors, and supporting the sales strategy through their daily interactions with employees.

At one high performing bank we know, the CEO does a daily “Paul (not his real name) Call.” The field provides “Paul” with information about what someone on the front line or in a support role did well on behalf of the customer the previous day. He makes a call to that person the next morning before the bank opens and shares five minutes of congratulatory time with the associate. He follows up with e-mails, copying the bankers and their managers. We have seen these e-mails hanging proudly in cubicles and offices around the bank. This articulates his commitment to the process and provides excellent modeling to managers below him.

We know another bank whose CEO started “Drip Walls” in the branches. This approach is connected to the book How Full is Your Bucket? The CEO heard Jack Hubbard speak about the book, bought it for all senior managers, and strongly suggested they implement a drip process within their departments. Drips are brief electronic messages from associate to associate about some job well done internally or externally. The message comes on a large drip of water. Associates that receive the drips print them out and hang them on the Drip Wall for all to see—including customers. The CEO has some drips in his office too. At this bank the water flows both ways.

Performance Culture Strategies to Consider

Crafting the elusive Performance Culture takes lots of blood, sweat, and tears. It’s a journey with no destination. In this challenging economic climate there are many competing priorities and constant distractions. In the end it’s all about control: we don’t control the economy, politics, or interest rates. We are the masters of our own behavior and here are some things to consider as you continue to build your Performance Culture:

• Building a performance culture is an ongoing process of experimenting, learning, and refining—an evolution not a revolution
  
• Balancing customer needs and internal needs is critical to effective execution and maintaining employee and customer engagement
  
• Leadership and coaching matter more than ever before
  
• An effective performance culture is incorporated throughout the organization, not just on the front line
  
• Defining and adhering to a sales process is the linchpin to changing behaviors and producing results
  
• Effective execution requires putting the right people in the right job, armed with the correct set of skills and expectations
  
• Incentives, rewards, and recognition are critical, not just for implementing a sales program, but for sustaining the focus; matching rewards to the desired behaviors is the greatest execution challenge
  
• Keeping the focus on behaviors and activities leads to long-term wins
  
• Deciding what to measure, implementing the right tracking system, and getting the right performance measurements in place remain a critical challenge

Since 2000 we have observed cultural paradigm shifts in many areas. These new convictions come with dramatically new front line behaviors that are redefining sales performance and the customer experience. The top achievers are being driven by a will to change that we have not observed in the general population. This desire to change coupled with a passion to perform at a higher level are creating new cultural approaches and distinct behavioral patterns at the front line.

The ultimate winners are the customers. They are getting more of the top performing bankers’ time and their experiences are enhanced. Customers expect trust and value from their banking relationships and the top performers are providing. Coaches are setting expectations and creating personal accountability to build trust and value inside the organizations as well. Top performers are obsessed—with Performance.

Open Enrollment Sales Management and Talking Business with Small Business Workshops

Annual Open-Enrollment Sales Management Seminar in Chicago
April 21-22, 2009 - limited to 25 delegates

Here are just some of the tools and best practices participants receive:

• Retail Skill Builder and Huddle Meeting templates
  
• Check-Ins: a powerful, unique approach to one-on-ones
  
• Joint Calling and Commercial Pipeline Meeting guides
  
• Dynamic Branch Observation and Coaching strategies

There’s more—much more, like:

• A networking reception
  
• A one-hour Discipline of Execution session with Jack Hubbard and Ron Buck
  
• Tom Doherty, Senior Vice President, First Chicago leads a Lunch ‘n Learn session about Prospecting and Onboarding

Finally, each banker receives a copy of Conversations with Prospects.

To register, click on the link:

http://www.stmeyerandhubbard.com/workshops/public-register.html or contact Kathy Kruzich at 630.845.4676 or kkruzich@stmeyerandhubbard.com.

Talking Business with Small Business…limited to 25 delegates
Complimentary Preview Session April 23, 2009

Talking Business with Small Business helps bankers:

• Understand the dynamics of business and financial issues
  
• Ask high payoff questions to uncover cash flow needs
  
• Connect cash flow and operating challenges to solutions
  
• Uncover borrowing causes, loan purposing, and repayment sources

Using an interactive simulation, Talking Business with Small Business builds confidence, reduces call reluctance, and allows branch managers to execute discovery conversations that lead to second and third visits and ultimately more closed business.

This one-day overview of Talking Business with Small Business includes:

• Facilitation by Julie Ruffolo, Executive Vice President
  
• High-level participant handout

No more than three participants per bank please. For more information contact Kathy Kruzich at 630.845.4676 or.kkruzich@stmeyerandhubbard.com

Best Practices from Their Home Offices

Last year a reader sent us an e-mail asking if we could feature a financial institution or two that has a sales or marketing success story to tell. If you have a success practice that you can share, send an e-mail to jhubbard@stmeyerandhubbard.com or call 847.717.4328 and we’ll work out the best way to highlight your accomplishments.

The Check-In

By Tom Carlson, Senior Vice President,
Park National Bank of Chicago

The two most recent Conversation Signposts featured articles from top industry consultants and experts that gave us insight into how 2009 might play out and how bankers can adjust to it. One article that particularly caught my eye was the one written by Nick Vaglio, Executive Vice President of MarketMatch. He states, “[Customers] are seeking a ‘go to’ professional because they don’t want to, or can’t, be an expert in the service they are buying.” He continues further, “…they prefer to find qualified experts they trust.” Additionally Patrick Stakenas, President & CEO of ForceLogix mentions, “…coaching drives as much as 17%-30% improvement in actual results.” He also suggests, “…coaching is only as good as the training and reinforcement it receives along the way.”

The question then is how do we get there? How do we, as managers, help associates become “go to” professionals or trusted advisors? For the past decade of my career, the answer for me has been the Check-In. What is it? In the simplest form, the Check-In is the time during which the RM (Relationship Manager) and the manager meet to discuss what activities have occurred the previous week and what the plans are on the calendar for the coming week. When I first heard about the concept, it sounded like a pipeline meeting. Far from it! These telephone or face-to-face meetings are strategic. They also focus at the performance level of the RM. Newer RMs need a blocking and tackling approach while high performers’ Check-Ins take on a best practices feel. The key is what Phil Jackson suggested when he coached the Chicago Bulls to six championships saying that everyone needs to be coached differently, but everyone needs to be coached. Yes, Check-Ins are the pre-cursors to coaching.

I focus on four areas with my Check-Ins; customers, Centers of Influence (external referral sources), prospects, and internal sources (branches, wealth management, cash management, etc.). This high-level outline leaves me flexibility to adjust to the individual RM as well as the nuances of the territory. If the person has a large portfolio, I start with customers and cascade to other categories as time allows. In the case of a newer person, we start with prospecting. My Check-Ins start with outcomes and move to other activities and behaviors within each category. Every once in a while it is important to change things around, so I try a different area first. It definitely gets their attention.

The most important part of the process is to be certain to ask relevant questions and to listen actively. A Check-In is just like making calls on clients or prospects: we want the other person to do most of the talking. To encourage this, I ask questions about the areas of focus. Bob St. Meyer taught me a great starter phrase: “tell me about…” I use it a lot. That’s it: just get the RM talking about the CPA he’s calling on, how the conversation went, where the prospect went to school, whether the prospect has any clients currently with our bank, and when the RM is going to follow up. Listen to the answers for signals and areas for suggestion: does the RM call on enough CPAs? does he ask customers the tough questions? how many times does the RM prospect in a week and how did the calls go? Just a few questions can give you great insight as a manager as to how to work with the RM: should I be making more joint calls with one banker? should I have this banker lead portions of the next Skill Builder because she is so good at a certain behavior? It’s amazing what you learn when you conduct these Check-Ins every week.

As the end of the Check-In, I always work with my banker to create some sort of brief action plan to create connectivity and accountability. These actions need to be specific and not generic. Avoid actions like “make more calls next week” and move towards, “Let’s make a joint call on Doherty, Inc., as well as call on CPAs Mr. Kress and Mr. Kari. When we do, I’ll be watching for those trust-based questions we talked about this morning.” The more specific the action, the more accountability there is.

I always take notes on my Check-Ins and keep them in a binder for each RM. After I meet with an RM I write down a few sentences in each of the four key areas. They could be good stories, customer issues, or a note to myself on what to ask at the next Check-In. The discussion points can change based on the focus of the organization. The basic principle is to have a conversation each week that gives both the manager and the RM the opportunity to discuss activities. If we focus on behaviors, it helps us all improve each week and ultimately reach our goals.

The Fox Behind the Chatterbox, A New Children’s Book by Anne Matalonis

We all have hobbies and interests. When Anne Matalonis isn’t helping her bankers hold better conversations with retail customers at National Bank & Trust in Sycamore, Illinois, she’s writing children’s books. Anne’s newest effort is truly outstanding. Readers with small children know the power and perils of the Internet. It has changed the way kids learn. It also puts youngsters at the risk of interacting with some of the web’s more unsavory characters. The Fox Behind the Chatterbox introduces us to Samantha and Zach —youngsters who have received a great new computer. Sam is the older daughter and

despite agreeing to sign a pledge to visit only safe sites and not to chat online, she is angry her parents won’t allow her to visit with her friends electronically. Enter Grandma James who relates a story about a wily fox who nearly lures a new chicken on her farm away from the henhouse and into danger.

Using this charming, family-focused story, this unique fictional children’s book gently depicts the potential dangers associated with online communication. It also provides parents, caregivers, and educators with a tool to help elementary age children understand how to safely use the Internet. “Today’s children have the world at their fingertips,” states Anne. “As early as three years of age, children use the Internet. We must all work to protect them as they explore online. This book was created from my strong desire to keep our children safe as they grow and learn.”

Parents are continually challenged with creating a balance of freedom and responsibility. If you have young kids who are now or about to enter the wonderful worldwide web, consider purchasing this book and read it together as a family. You can reach Anne Matalonis for more information at 815.751.3639 or anne@orangetreepress.com.

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Jack Hubbard Chief Experience Officer 847.717.4328 jhubbard@stmeyerandhubbard.com Bob St. Meyer President 847.717.4322 bstmeyer@stmeyerandhubbard.com