Each summer, the Financial Times presents a 20-day “Summer School” consisting of daily articles dissecting and discussing key business issues.

 

Last month, one essay focused on the topic of the characteristics that result in a company achieving consistent peak performance. It built off the thesis that, “Success is not easy to imitate, but, certain factors recur time and again.”

 

While banks were not among the companies cited as peak performers (not surprisingly, Dell, General Electric, and Toyota were mentioned), the principles outlined should be considered by senior bank managers. The author’s comments are particularly relevant for banks as they approach the end of their 2006 strategic planning cycles.
 
Position design and consistency are critical

One basic tenet of top performance is regularly overlooked by senior bank management: “Throughout the ranks, the most reliable path to high performance is through job design…Most managers focus on selecting the right person for a position. But, it is the position itself that is structured for high performance or otherwise. If managers have carefully designed the four spans that…characterize a job (control, accountability, influence, and support), its occupant is set up for high performance — whatever his or her flaws.”

 

While the author presents thoughtful and detailed job design as a basic, our experience is that too many banks avoid focusing here. How many banks have effectively analyzed the branch manager’s role, the small business banker’s activities, and/or the commercial banker’s responsibilities and, then, established the detailed “control, accountability, influence, and support” for that position? Even if they take those foundation steps, how many stick with a position-oriented approach in the face of individual banker objections or exceptions?

 

Too often, we see branch managers, RMs, sales managers, and others, in effect, creating their own jobs and determining for themselves how and where they spend their time. Management appears to act gingerly, failing to assert its responsibility and appropriate role.

 

In recent years, we view one of the hallmarks of a top performing bank as management’s ability to take a position-oriented approach rather than allowing various individuals to interpret roles and responsibilities. Even in the current organizational move toward regionalization, the top banks are detailed about key roles and responsibilities in the field and in the central office. It is not that ambiguity does not occur from time to time; rather, it is minimized to the extent possible.

 

For this approach to work, detailed planning and management fortitude are required. Too often, management “blinks” in the face of internal opposition, even when management is right.
 
Increasingly, it is the team and not the individual

The author asks, “Does a high-performance team depend more to its leadership, its chemistry, or the stability of its membership?” Before we address this question, please note that one of the shifts that has occurred in recent years is that banking is more of a team game than ever before. With the emphasis on increasing cross-sell and deepening wallet share, banks must work well across organizational barriers. Further, as banks introduce new job designs, individual areas need to emphasize a team approach (in the branch, with business and commercial customers, etc.).

 

However, traditional bank culture and routine may conflict with several of the keys to high performance. “The place to start is in limiting turnover in teams…The stability of the team over a period of years…has been key to its performance…These are teams that yell and stomp. They get in each other’s faces and argue, and thrive on friction.” Quoting a professor focusing on teams: “They are ‘turned on by cutting-edge problems and seemingly impossible challenges’, she says, ‘and they believe that achieving their goal will change the world.’”

 

The above paragraph raises three issues for bank management:

 

First, if a retail banking, small business, or other job is viewed internally as a way station to a “better” job within the bank rather than a professional end goal, the ability to team well may be eliminated or, certainly, reduced.

 

Second, few banks’ meetings demonstrate anywhere near the level of passion and commitment described. Sometimes it appears that the main focus of the bank meeting is survival to the next bank meeting. Most banks would view “yelling and stomping” as unseemly. Too bad.

 

Third, few bankers we know believe their goal “will change the world.” That’s OK, but they need to believe that their focus can change their bank. Strategy sessions have become too staid and predictable. Instead, senior management needs to instill these initiatives with a sense that the time required is highly valuable, ideally leading to the transformation of the bank. We have worked with bankers who begin the planning process with a view best expressed as, “Oh no, not again.” This is an understandable perspective, given past experience. But, if past experience is accurate, the future approach needs to change.

 

Again, execution is key

Lastly, the article focuses on another area in which too many banks fail: ongoing review and consistent execution. Banks have spent millions on technology-based information and sales “solutions” that might actually provide value if they were consistently used over time. But, like the pebble in the water, a big splash is made with introduction of the capability. However, over time (often six months to a year) slippage occurs in usage. The expensive sales management system is still used “kind-of.”

 

Senior management allows this to happen and often seems surprised and out of the loop when confronted with this happening. They should be fully knowledgeable and in command.
 
Concluding thought

While achieving peak performance is a difficult goal, a handful of banks are taking the steps required to get there. Determining the direction required, sticking to decisions, refusing to blink, constantly reviewing execution progress are all critical elements of success. The few banks willing to commit to this type of endeavor and see it through have the opportunity to outpace the field and sustain their marketing and sales advantage.