Strategic planning means a lot of things to a lot of different people. One problem that exists in banking is that the act of strategic planning is undefined and so management teams feel that if they can just get to an offsite, sit around a table, work on some budget plans and have an investment banker speak, then they have done their strategic planning. While all of that may help, true strategic planning comes down to essentially meeting two tests.
Tag: Human Capital
When it comes to corporate culture, many banks know that building a genuine and sustainable culture is like baptizing cats. It’s tough work fraught with many scratches and a lot of moving around. However, when it comes to corporate culture, Netflix is in the pantheon and can give banks insight. In 2011, their CEO, Reed Hastings, their Chief Talent Officer, and others produced a “Culture Doc” (below) that spread like wildfire among the Silicon Valley’s elite.
We recently heard of a regulatory team that during a safety and soundness exam played “Management Bingo.” They took senior executive’s business cards, put them in a bowl and picked one. The CEO (if he was not picked) had to quickly tell or show an action plan for the succession of the executive that was chosen. If the CEO were chosen (and they put two cards in if the CEO was also President), then the Board would have to show a plan.
Far and away the most profitable asset for a bank is its people. It stands to reason that optimizing your most important asset is critical to increasing efficiency and becoming a top performing bank.
Almost every banker will find at some point having to present to an audience. Whether you will present to your peers, the board of directors, a group of prospects or your direct reports, you will need to make prepared remarks in front of a group of people. In particular, we are huge advocates of leveraging your bank’s expertise and passing that on to your customers in the form of client events, educational sessions, and community workshops.
A new study by PwC shows what most community banks already know – it is difficult to hire and retain quality employees that can help drive innovation. Banks are not the primary choice for the top graduates for a variety of reasons, and as such, community banks will continue to struggle to obtain the talent they need to compete. 80% of the financial services polled report having trouble hiring and retaining the people they need for new product development. Only 12% said hiring wasn’t an issue.
As community banks, we aim to fulfill our namesake by being a part of, and representing, our communities. Sometimes, however, it is difficult to see that there may be a gap between our banks and the communities that we serve. The NFL had a similar issue before 2003 when they realized the disparity of the demographic between their players and head coaches. There were only two African-American head coaches at the time, out of the NFL’s 32 teams. “The Rooney Rule” changed that.
Once upon a time there was a bank that was close to failure. It used to be a great bank with branches filled with vibrant customers and earnings as thick as Kansas soil. However, over time customers moved on and the staff started to feel that they had little to offer compared to the largest of banks. This was a bank that was dying a slow death.
Here at CenterState Bank we have some of the grittiest bankers around. Of course, every bank has them and chances are if you are reading this there is a high probability that you are one as well. Why else would you be clicking on this when you have all that work to do? The answer is likely dedication to the journey of banking and the need to learn from our and other’s triumphs and failures.
Any bank merger announcement comes with the discussion of people, a bank’s most valuable asset. When Bank A acquires Bank B, there is the risk that key staff from Bank B will defect. While both Bank A and Bank B want to retain those key staff, Bank C and D are in the wings waiting to pounce on opportunity. No matter if you are Bank A, B, C or D, there are powerful psychological and economic forces in play that should be understood and managed in order to achieve your goals.