“We recently received a memo from senior management saying: ‘This is to inform you that a memo will be issued today regarding the subject mentioned above.’” (Microsoft Legal Affairs Division)
Gonzo groupies, we have spent no small amount of time writing about – and you have spent more than that thinking about – efficiency, staffing and benchmarking. We have counted, compared, adjusted and (in the overall) improved staff productivity. There is a lot of credible peer data available (some of it ours) that can be used as a basis for setting the right levels of staff by department or function.
However, there is one big area in banks that frankly has not received as much focus and discussion as others, and that’s management. While we have often been asked whether we think a bank’s team is top-heavy or whether there might be too many managers in a particular function, most banks have not looked at or benchmarked overall management count.
Why not? Well, there are several reasons, many valid. First, “manager” is not a discreet function in many areas of the bank. While there are jobs, mostly senior, that are 100 percent management, there are many more that are not. A branch manager, for example, spends part of his/her time managing but also performs sales, lending and other functions that are not management activities. Part manager, part sales and fulfillment. A senior commercial manager might spent part of his/her time supervising other lenders and support staff but also manages a portfolio. Part manager, part lender. The head of human resources certainly manages but might also interview new job applicants. Part manager, part recruiter. So, in the end it can be hard to know exactly what the real management headcount is.
Second, benchmarking is an easier and more accurate activity when looking at non-managerial jobs. There is a pretty common definition of teller, or loan processor, or call center agent. It’s not hard to compare these jobs across many financial institutions because there is both a common identification of the people performing the function and clear production metrics against which they can be analyzed. In other words, peer data is good. That same capability doesn’t exist with, say, a senior management group.
Third, we have to be a wee bit honest here and recognize that most staff and analysis is performed and decisions made by senior managers, and it’s not common for them to reduce or eliminate themselves, n’est-ce pas?
Nonetheless, maybe it’s time to pause and consider:
“I’m never gonna work another day in my life. The gods told me to relax.”
–Monster Magnet, Powertrip
Well, even admitting that, we are not going this far into a rant without the goal of providing some ideas on what a bank team can do about it. Here are some ideas we have utilized when working with our clients to try and gauge whether management staff levels might be too high.
The truth is that, unlike many areas where more specific benchmarks can apply, getting management levels and mix right is as much art as science. In addition to looking at staff counts and functions, it also involves factoring in the experience and skills of the managers in place and the amount of management needed in a particular group. Not an easy task. But we have right-sized the front line and we have right-sized ops. We hold most of our lines of business accountable for justifying staff and staff adds. Scrutiny at the management level is just as valid and important a focus.
Cornerstone Advisors helps financial institutions improve processes and implement formal scorecards that “strip the onion” across all major institutional functions. Armed with this type of information, financial institutions can work on fundamental enhancements that establish a sound foundation for higher performance levels and future growth.
Here are just a few of the benefits your organization can realize from Cornerstone’s Performance Assessment:
Contact Cornerstone today to get started on optimizing your organization.