ideas on how to build a Performance Culture and how to sustain the momentum over time. Their internal brand, CARE, stands for Communicate, Ask questions, Refer, when appropriate, and Enjoy the results.

We heard, first hand, from Steve Heine, Executive Vice President, of Farmers and Mechanics Bank, a $1.5 billion bank in Frederick, MD with 21 locations, and an affiliate of Mercantile Bankshares about the unique things that he personally does to make their performance culture part of their organization. Dave Ulferts, VP of Branch Sales; Brenda Rouse, VP of Branch Administration; and Angie Stave, Performance Management Officer are associates at First National Bank of Omaha. The bank is part of a $13 billion holding company with 50 locations throughout the Midwest. First National prides itself as one of the top in-house merchant processors and top Visa/MasterCard issuers in the United States. These bankers shared their insights into what has contributed to their success.
		Maggie Bayless, head of Zing Train at Zingerman’s and Ron Maurer, Zingerman’s Chief Administrator, talk to us about living a culture that makes the process as easy to follow as a five step recipe. They know a lot about “ingredients for success” as they are part of the highly successful Zingerman’s, a deli in Ann Arbor, Michigan.

Banks that have successfully embarked on the journey of becoming performance organizations recognize that it’s not just about “talking the talk.” They talk it, walk it and most important, live it.

Monroe Bank & Trust Where CARE is More than a Slogan

MBT credits the following factors to their performance culture success: direction, leadership leadership commitment, communication, culture, motivators, resources,

• Doug Chaffin, President and CEO, sees himself as the key custodian of the culture. He requests presentations and updates about CARE at the beginning of every senior manager meeting. He sends regular e-mails when he learns that an associate has had a successful sales conversation. Most importantly he holds weekly one-on-one strategic sales conversations with his direct reports – even when he’s on vacation. These “Check-ins” are vital to the bank’s progress and Doug has not missed one in more than two years. Not only does he conduct branch visits on a quarterly basis, he asks to see the scorecards, logs, sales charts and other sales related documentation. He says he does this “to catch someone doing something good that I can reinforce.”
• Senior management demonstrates commitment by stopping in at every new hire training session to meet the new employees, talk about the bank, its history and its future. CARE is a major discussion topic.
• The bank has developed the Large Relationship Taskforce made up of associates from various departments. This “SWAT Team” is charged with making certain these top clients are being attended to and that all needs are being attended to by the bank.
• When CARE was in the initial stages of the implementation, they distributed “Barb’s Babblings,” informal emails from Barbara McMillen, Vice President of Branch Administration, that shared anecdotal successes people were experiencing, to generate excitement about how CARE was positively impacting customers and bottom line results. This motivated employees to try even harder and encouraged them to apply their new relationship development behaviors.
• Wendy Warrington views the CARE journey as involving three culture changes: 1) moving to a relationship development focus with customers, 2) moving managers to become leaders who are forward thinkers and decision-makers, and 3) changing client perceptions and expectations for how they will be treated and served at the bank.
• The Retail Division has quarterly celebrations and invites other lines of business to join. They have special campaigns that inject fun into the process to make striving and reaching goals rewarding.
• Implementing CARE has affected the way MBT hires new employees. Candidates are provided with clear expectations about CARE which has resulted in new employees comfortable and open to the concept of relationship development with customers in a performance culture.
• Human Resources has discovered new employees who have worked at other financial institutions find it refreshing for MBT to focus on the client relationship and the client’s needs as a win-win way to achieve desired outcomes. Of course, outcomes are important at MBT (they met or exceeded all their goals for 2004). It’s just that the bank focuses on quality more than quantity and that’s what helped them achieve their goals. New bankers say they don’t miss the high pressure negative atmosphere they experienced at their previous organization.
• The management routines are embedded into the way they do business. Managers conduct weekly Check-ins with their team and weekly meetings are strategic with emphasis on activities and goals. Employees are more informed and as a result, they are more motivated to do their best. In addition, employees are more likely to seek help and support from management when not meeting expectations because they don’t want to let their team down.

First National Bank of Omaha Knows Where the Beef Is

First National Bank of Omaha credits the following factors in enabling their

• Tom Haller, Senior Vice President of Retail Banking, recognizes that since the bank owns a substantial market share in Omaha his sales associates must take a two pronged approach; proact to keep what they have and deepen relationships with current customers. He has communicated that vision to the retail bank. Tom expresses appreciation often, making employees feel valued and that what they do is important. He accomplishes this by staying in close contact with his Regional Sales Managers.
• Dave Ulferts, VP of Branch Sales says that if senior management isn’t 100% committed, employees will see right through it and discount everything that’s said. Dave does Check-ins weekly and sets clear expectations that all the management routines happen at every level throughout Consumer Banking. They have learned to drill down in their questioning. They regularly ask “what”, “why”, “who”, “tell me more”. They no longer accept broad statements of fact, the way they used to do.
• Branch Managers and their assistants present Annual Performance Plans for the branch and Personal Development Plans for each employee in the branch. These are presented to a senior committee that asks in depth questions and approves the plan. Plans are reviewed regularly to allow them to be living documents with executable strategies.
• Sales Celebrations where branch managers and personal bankers are recognized for performance are conducted quarterly; Platinum Outings for top performance (e.g. 25 bankers going to Chicago for the day for lunch and a ball game); Events to recognize tellers for referrals and accuracy, Retreats where all bankers go to a special event and administration runs the branches that day, a Quarterly Publication where they publish the names of top achievers, as well as individual branch activities.
• Personal Bankers conduct a process called 22261 on every new customer that comes to their branch. This is a system of regular, disciplined contact with the new customer to learn about the experience with the bank and to determine if there are other needs the banker can fulfill. The bank talks cross solving versus cross selling which takes the focus off the product and puts it on the customer.
• The bank previously held monthly “call nights” from the branches with minimal success. They now do “customer nights” the goal of which is to understand the experiences the customer is having at the branch and to ask 3-5 high impact questions to determine if there is a need. The personal banker can then follow up if a need becomes apparent. Everyone has embraced this new approach and the results have been very positive – both from a customer perspective and from the sale of additional products.
• The bank invested significant time and energy into job clarity and role clarity. This has helped provide a career path for current associates as well as facilitating the hiring of sales oriented candidates.
• The bank’s impressive retail incentive program is uncapped, easy to understand and results can be viewed weekly by the banker and their managers.
• A new platform system they call “FOCUS,” has been implemented to support expectations for employees to be more relationship-oriented. The new system allows bankers to see the entire customer relationship, recent bank communications, and recent marketing campaigns. In addition, the new system tracks activities and results.
• HR interviewers have learned how to better understand the expectations of various customer-contact staff and they now communicate those expectations to job candidates. New hires know what they’re getting into and there are very few surprises for anyone.
• At FNBO, measurement is critical. They began doing mystery telephone shops of bankers regarding borrowing needs. The mystery shopper posed a situation such as “I want to consolidate my debt” or “I want to buy a car” and recorded the banker’s responses. Initially, less than 30% asked questions about the rate on the caller’s first mortgage or if they had any additional debt to save them more money. Since that program was initiated, they’ve made significant progress with asking better questions. Dave believes it’s because they track and measure that behavior.
• Reinforcement is “the holy grail of performance management.” Management believes it’s critical to follow any training event with coaching, check-ins, and meetings to reinforce the learning that took place.
• Finally, the bank has taken a modularized approach to learning, creating Learning Labs that last one day or less. These interventions prevent long periods away from the branch and they teach specific skills that are then linked back to the sales process through the branch managers’ coaching and observations.

F&M Bank – Steve Heine Looks out the Windshield

Steve Heine is a top sales manager who tirelessly and enthusiastically has focused on helping his staff succeed, Steve credits the following factors in enabling the success of the F&M Performance Culture: leadership commitment, communication, culture, and organization structure/work design. In 2003, F&M was acquired by

• Their strong culture begins with the CEO, Jim Talbot. Jim joined the bank following F&M’s acquisition by Mercantile Bankshares in 2003. From the beginning, Jim had an open door policy for both clients and associates. Jim uses a client and associate focus with a collaborative approach to building the bank.
• Senior managers are very visible throughout the bank; they are willing and ready to support associates when needed. They believe in personal communication that demonstrates their caring and they inject humanity into the change process. During a branch visit, an associate mentioned that the branch needed a new refrigerator and the CEO, Jim Talbot replied, “Get a new fridge!” demonstrating his understanding and caring for the associate experience as well. Senior management continually demonstrates their belief that when they treat associates fairly and with respect, associates will do the same with their colleagues and clients.
• Line managers perform as player/coaches. All of management is engaged in acquiring, retaining, and growing relationships. Steve Heine says, “It’s our job to drive the business, so we’re engaged in joint calls, branch visits, weekly check-ins, etc.”
• Quarterly meetings are held with division/ department heads, including line and support departments. During these meetings, they discuss business results and plans for the future. This approach drives accountability, helps communication, drives the culture (reinforcing the importance of focusing on the client), and serves as a resource for people (because they use each other to get input and ideas).
• Following the merger, they assembled a group of associates from across the bank and asked them to identify three behaviors that every associate should begin doing immediately when they come to work that will help drive success. They identified: 1) come with a good, “can-do” attitude, 2) take ownership for your issues, the client’s issues, and the organization’s issues—don’t say it’s someone else’s problem, and 3) listen to your clients and colleagues – this way we’ll better hear what our clients and colleagues need following the merger. The result was greater satisfaction by all. There was a meeting in February 2004 where these ideas were shared with all associates and Steve pointed out that although they didn’t cost anything to implement, they were the key to the organization’s future success. It was in everyone’s best interest to do it.
• Senior management is responsive and willing to change the way things are done, from the way mail was collected to the way credit was approved. They ask groups of associates to provide input and many recommendations were acted upon. This helped employees have ownership and “skin in the game.”
• Consideration is given to the ratio of leaders to associates. In commercial, there’s one leader to no more than a four-person team. In retail, there’s one manager for eight branches. By keeping the ratio relatively low, managers have time to coach and do sales calls too.

Steve’s phrase “God made rear view mirrors small for a reason” is something bankers at F&M have truly embraced. Team meetings are “windshield driven” – that is they have become more strategic and forward looking versus reporting on what happened. “The past can’t be
changed,” says Heine. “I want to know what’s going to happen this week. That doesn’t mean we don’t celebrate our successes and address our failures, but we have to build on what we did so we can make it happen again this week."

• Getting other lines of business to the same point in the process. Although the entire organization is involved in the process, each division/line of business began at a different point of sophistication and acceptance. Some areas are more reluctant to complete requisite paperwork that a Performance Culture involves. Others find it difficult to change old habits – making meetings more engaging versus reporting for example. Everyone at MBT clearly understands that CARE is not going away, and it is slowly finding its way into the culture.
• Ensuring that the incentive plan makes monetary rewards in sync with the bank’s vision and values. Each line of business operates differently and has different goals; therefore, each will have its own incentive plan. All plans will, however, link to the organization’s overall objectives. Doug Chaffin, President and CEO, wants to ensure the plans reinforce teamwork, individual efforts, and reflect their focus on the client relationship.
• Refining the structure and processes that directly impact the customer experience. The bank’s focus will be on aligning the “back end operations” and streamlining the processes so they are seamless to customers.

• At FNBO they’ve identified culture and measurement and tracking as the factors they will target their refinement efforts. Their focus is on the following:
• Conducting management meetings every 6 weeks, which has helped managers feel informed and included in the corporate direction. They would like to institute a similar sort of communication to other levels within the organization, beyond management.
• Recognizing that the market and industry have changed, so their best practices have changed as well. They want to do a better job at drilling down behind the accomplishments to identify specific behaviors that enable bankers to be successful.
• Achieving a consistent level of activity with their sales management routines has been established. Now they want to focus on the quality of those conversations. Coaching is a key focus for the bank in 2005.
• Working to always improve. They want to be thoughtful about how they refine the tracking and measurement, to ensure they take potential ramifications into consideration. Their goal is to pull information from the system and to report more frequently than they currently do. Getting their bankers to use FOCUS as a sales tool is also a key priority for this year.

• With the successful merger behind them, senior management is beginning to focus on their long-term mission, value proposition, and communicating them throughout the organization.
• Communicating consistently and focusing on improving the frequency of their messages. They believe in the “keep-it-simple” principle with clients, associates, and shareholders. Retail communicates weekly; other divisions have different frequencies. The goal in 2005 is to establish a consistent communication frequency from an overall company approach.
• Measurement and tracking is primarily done manually, although systems may be used in collecting some information. Their goal is to improve their performance metrics and the timeliness in which information is available to understand results faster. In that way, they feel they will be able to understand and modify the quality and effectiveness of their activities and behaviors. (Currently they do mystery shops and surveys to measure client satisfaction.) Once the performance metrics are identified, they will begin to evaluate options for automating the process.
  

Zingerman’s – Performance Means Thinking Outside the Sandwich

Zingerman’s was established by Paul Saginaw and Ari Weinzweig with two employees in 1982. What started out as a simple deli with 1,300 square feet and 24 seats in Ann Arbor, Michigan has grown to a $25 million organization that includes eight different businesses and 400 employees.

Zingerman’s credits much of its success to its approach to service. One of their eight businesses is ZingTrain, which provides training and consulting services focused on how to deliver high quality customer service. Ari Weinzweig also says it’s because their five step approach really works. At Zingerman’s:

1. They teach service. Zingerman’s is relentless about service training. When people finish the training, they know what they’re expected to do with regard to customer service.

2. They define service. Zingerman’s makes it abundantly clear what service means and what it looks like.

3. They live service. Zingerman’s devotes enormous amounts of energy to walking their talk. They constantly strive to improve, perfecting alignment between the way they teach it, define it, and live it.

4. They measure service. They believe that building measurement into their approach provides a commonly shared language about how they’re doing, where they’re succeeding, and where they’re falling short.

5. They reward service. They provide effective formal and informal recognition, rewarding those in the organization who go out and give great service.

We sat down with Maggie Bayless, managing partner of Zing Train at Zingerman’s and Ron Maurer, Zingerman’s Chief Administrator, to learn what a successful company does to become a performance organization, outside of banking.

How did Zingerman’s get so smart with regards to service?

“We don’t get it right all the time,” says Maggie. “There’s a catch-22 when you provide good service because when you’re known for quality service, people’s expectations are raised and they often try to catch you doing something wrong. That’s a good problem to have—we’d rather people expect a lot of us than nothing at all. By putting out the book, (reviewed later in this newsletter) we’ve raised people’s expectations another notch.”

She adds, “Paul and Ari recognized the whole experience for the customer was the service as well as the food. They provided great service the way they thought of it and other employees modeled them as they came on board. About 7-8 years ago, when there were about 50 employees at the deli, they realized that what came naturally to them didn’t come naturally to everyone. They recognized that they had to teach others what it meant to provide great service.”

"Ari and Paul believe everything can be boiled down into steps, much like a recipe,” says Ron. The Zingerman’s three steps to provide great service is the product of many years of teaching and fine-tuning the message: 1) Figure out what the customer wants, 2) Get it for them accurately, politely, and enthusiastically, and 3) Go the extra mile for the customer.”

Zingerman’s has not calculated a “return on investment” regarding the training they invest into their employees. However, they believe it shows in their employee turnover rate. In the food service industry, 100-300% turnover is not unusual. Zingerman’s has a 75% turnover rate (primarily with part-time employees), which translates into significant cost savings for the business.

In employee surveys, employees say that what they like most about Zingerman’s is that they are empowered to do whatever it takes to make the customer happy. They are provided with the information to make good decisions and their decisions are always supported (even when they make mistakes).

With eight different companies in the Zingerman’s community, how do you avoid “silos”?

“The driving force behind the way Zingerman’s is organized (as eight completely separate companies) is Paul and Ari’s belief that when money changes hands, the game is different,” indicates Maggie. The seven Zingerman’s companies actually send invoices to each other and cut checks at the end of the month. They are each other’s customers and they treat each other the way they treat their other customers (using the three step process to provide great service).

They model what they teach within each company, between the companies, and with their external customers. The managing partners all have an equity interest in Zingerman’s and meet bi-weekly in a Partners Group Meeting. During these meetings, they decide what’s

• Take time to build a relationship with the company
• Ask questions and really listen to better understand the company’s objectives and operation
• Offer suggestions that are valuable to the client that reflect understanding and desire to be a partner.