A consulting colleague of mine, Liz Bentley, has developed a thriving practice in executive coaching. As part of her diagnostic work she often begins her analytic process by conducting 360 interviews, whereby she meets with a client’s direct reports and the client’s boss. She discusses with them the client’s various attributes in order to create a vivid and in depth picture of the individual’s strengths and weaknesses. Obviously, she keeps individual comments confidential.
FIC and other consultants often conduct a similar process for bank clients when we do what is commonly called a SWOT analysis (strengths, weaknesses, opportunities, and threats). We then review the results with senior management, frankly, often emphasizing the negatives rather than the positives of an organization. Based upon Liz’s experience, we may have been doing it wrong.
As she writes, “Research and social psychologists have discovered that focusing on strengths is a more effective strategy for self-improvement because it leads to higher performance, greater productivity, and increased satisfaction. Plus, leveraging your strengths can actually improve your weaknesses. That’s because your strengths and weakness are more closely linked than you may realize.” For example, arrogance is the negative extreme of confidence (confidence is a good thing), inflexibility may be the negative side of being systematic, and unreliability is the flip side of spontaneousness.
Banks need to assess their own positives and determine how best to exploit them. Particularly today, banks and their line bankers appear to be in the doldrums, bummed out by a slow economy, proliferating regulations, and often antagonistic support staff (who firmly believe that they are smarter than the line). But, banks have tremendous strengths and offer great value to their customers that they need to understand, celebrate, and exploit.
1. Most bankers care about their customers. Despite the bad recent publicity and the negative PR of TBTF banks, most bankers are thoughtful, caring, and helpful. I see this from the inside as a consultant as well as from a customer perspective. The company I bank with is one of the worst among the TBTF players and yet the bankers I deal with are terrific despite their mediocre leadership.
2. Bankers are high integrity. OK, maybe not investment bankers, but the commercial bankers I have worked for and with operate with the highest ethics. Unfortunately, the crimes (and I mean crimes) of some in combination with disastrous media coverage (usually accurate) have eroded some of the public’s confidence in banks and made the industry a piñata for regulators.
3. Banks have fueled the growth of America. It is no coincidence that banks and baby boomer wealth have grown together. They are co-dependent. While many non-bank competitors are now picking away at bits of bank market share, banks are still incredibly important and will continue to be so. The industry and individual banks need to do a better job at communicating this.
4. Banks excel at risk management. Even with recent problems, banks, large and small, have developed excellent risk management procedures. While they continue to overemphasize the use of technology in making decisions, the state of risk management has never been better. Investors should more fully appreciate the improvements that banks have made.
5. Banks learn from their mistakes. Really, they do. But sometimes they let the sales/credit pendulum swing too far over to credit conservatism once mistakes have been made. That’s where we are now at many banks, although the need for revenues is starting to change that.
6. Banks offer significant expertise. Even banks without specific industry lending groups possess expertise in certain industries, whether manufacturing, construction, lending to high net worth clients, or other areas. These strengths can be further exploited to differentiate the bank from others and to allow, in some cases for a pricing premium.
Some of these positive characteristics are “soft” and cultural while others can be more directly translated to a stronger bottom line. Management needs to acknowledge its individual strengths and determine the best path to take them forward.
I could and have written articles about what is wrong with banks, but, as Liz suggests, that often results in people shutting down and not learning from the criticism no matter how valid. In her words, “Focusing on strengths will lead to greater success and a strong signature presence. For continued self-growth, examine your characteristics, acknowledge your strengths, identify where your equator is so you don’t go south [meaning fall into the negative side of a characteristic], and work to constantly uncover blind spots. To put your best self forward stretch out of your comfort zone to reach new heights.”
That is an area that most banks need to revisit and rethink. Bankers used to stretch to help their customers and distinguish themselves from others. Now many operate in an increasingly narrow box, disappointing customers, and providing an opening for nonbank players. Management needs to reflect on the characteristics such as those above that made them valued by their clients and work to emphasize the values, energy, and results behind them.