It’s been a heck of a nightmare, and I have been saddened to hear several top-level bankers say over the past year, “This business just isn’t fun anymore.”
Halfway through 2010, there is still nothing to be giddy about. We are knee deep in $400 billion of nonperforming loans (5.46% of all bank loans nationwide), and regulatory micromanagement has arrived for at least the next decade. Long-term unemployment is a real economic issue, and small businesses are hurting big time even if large corporate earnings have returned.
In order to reverse this fatigue and climb out of the Dark Ages, bank leaders will need to do more than just execute on the basics. Sure, we’ve all tightened credit standards, built up the capital, trimmed expenses and worked “constructively” with our regulatory partners. But the real leaders that will emerge in our industry’s next era will think more like cash-strapped entrepreneurs in a startup company. On nights and weekends, the very best CEOs will be obsessing about how the “playbook” is changing in their industry and how they will compel their hundreds or thousands of employees to flush out this new playbook. For those who will be true leaders in 5 – 10 years, trying to develop a future strategy for the organization should feel damn uncomfortable. Anyone who’s got answers right now is probably just buying time until retirement.
So, as GonzoBankers work to shake off the fatigue and climb out of the Dark Ages, I would like to share five key mandates for bank leaders:
Mandate #1: Don’t whine about risk management and compliance, reinvent it.
Mandate #2: Don’t focus on employee austerity, focus on comp alignment and talent grabs.
Mandate #3: Don’t wait for fads. Steal retail banking market share now.
Mandate #4: Don’t count paperclips, face reality on what drives operating costs.
Mandate #5: Don’t be a boring banker. Demand R&D on a shoestring.
It’s been tough work hanging out in the bunker, but an unbearable stench is starting to infiltrate the place. Bank leaders need like never before to overcome fatigue and defeatism in their organizations. Building the will to win back into the team is job number one.
-spw
Sounds simple, doesn’t it? Sure, if it weren’t for all the variables and unpredictable events.
Wherever you are in the strategic planning cycle, Cornerstone Advisors can add value. If you need to craft a new strategic plan – we can help with that. If you could use some guidance on implementing your plan to achieve maximum efficiency, we can help with that. If you’d like to measure the effectiveness and relevance of your existing plan – we can help with that.
For more than a decade, Cornerstone has assisted financial institutions develop, implement and manage their planning efforts. If now seems like a good time to take another look at your institution’s strategic plan, let us know. We will be happy to share stories of our past successes.
Excellent article! I couldn’t agree more with all the points you raised. While the challenges we face are still very real, some excitement is returning for those willing to re-invent their organizations.
Thanks LeeAnne! I’m sure you’re right on top of creating a corporate culture to match this new world of financial services
Great article, thanks for the breath of fresh air.
Thanks Jodi!
Mr. Williams
A well developed and implemented article. Mandate #1 succinctly decribes reality.
Steve – I love your positive outlook. We shared this article with some of our bank clients as a fresh perspective for 2011. Positive feedback as usual! Keep up the good work.