The Big Bank Banker: Handle with Care

Anyone who hasn’t been living under a rock with the Geico gecko has likely noticed that the banking industry has been taking it on the chin for the past couple years. Hardly a week goes by without a press release announcing the next round of layoffs at the big banks particularly. What does this mean for mid-size and community banks? An unprecedented glut of resumes of the talented and the not-so-talented flooding Monster, LinkedIn and banks’ Human Resources sites.

In my consulting work with mid-size banks, I have noticed over the past 12 to 18 months a dramatic increase in Big Bank Bankers (BBBs) being hired for line-of-business and other executive positions. I have also seen a similar but less dramatic increase of big bankoids showing up in large credit unions. “So, is this a good or bad thing?” one may ask. My response would be that it’s a mixed bag. We’re still fairly early in the hiring cycle but I do believe the negatives can quickly outweigh the benefits if the situation isn’t carefully managed.

Set forth below is my nickel tutorial on what CEOs and fellow executives of mid-size and community banks should watch for as they ponder whether a particular BBB is a good match for their team:

The GOOD Stuff a BBB Can Bring to the Party

• Outside Set of Eyes – A new BBB added to the management team can provide a wonderful shake-up to a stodgy, entrenched management culture that needs an outside set of eyes to challenge the status quo. This influence can extend far beyond culture, touching process, organizational structure and a host of other areas.
• Customers and Access – More so in the commercial, wealth management and mortgage arenas, a new BBB executive should potentially bring new customer relationships and access to partners and centers of influence. Simply put, the new BBB’s ability to grow customers and revenue in his or her line of business should be evident in six to 12 months.
• Industry Best Practices and Knowledge – Having likely been utilizing different systems, workflows and processes at a big bank, the new BBB should be able to come to the table with recommendations for implementing industry best practices and affecting change for the good. After all, those big banks hire armies of consultants every year to provide them with this crucial knowledge so the BBB’s new employer might as well take advantage of it.
• Poaching – The BBB should be identifying the “best and brightest” at his/her former bank, allowing the new employer to target those individuals for potential openings. If they came out of a line of business, they can also be a huge help with a carve-out strategy in recruiting the best production team from a given area.
• Suits – The typical BBB usually has nice work clothes, forcing an unconscious fashion competition at the new shop that will leave everyone better dressed in a year.

The NOT-SO-GOOD Stuff a BBB Can Bring to the Party

• Culture – Perhaps the most common mismatch I see occurs when the BBB wants to implement his/her former culture in the new bank. Remember, mid-size and community banks hold themselves out as “anti-big bank,” so they should be wary of new committees, meetings and bureaucracy.
• Systems and Technology – Time and again I have seen new BBBs want to implement at their new employer the particular system they used at their old bank. It should not come as too much of a surprise to see the BBB at their third or fourth Technology Steering Committee meeting start advocating for a system change, alleging they can’t grow the business with the antiquated systems currently in place.
• Organizational Structure and Staffing – Most bankers would admit their shops have dysfunctional organizational structures. That being said, these same bankers should be on the lookout for the new BBB wanting to change org structure and add staff (often assuming more power with the recommendations, of course). Community banks often pride themselves on running lean and mean, nimbly responding to customer needs and service. New layers of organizational structure and more staff with no clear accountability could impede those goals.
• Clean Fingernails – Some of the most successful BBBs are experienced corporate warriors, having spent the majority of their time on three things: management, meetings and politics. These competencies should, to varying degrees, be antithetical to the type of culture the community or mid-size bank wants to establish. Be attuned to the BBB that spends the majority of his/her time “managing” and speaking in broad generalities rather than bringing specific and pragmatic product, system and process recommendations to the management team. Dirty fingernails and all-hands-on deck attitudes are needed in our smaller banks.
• Products and Reporting – In addition to blaming systems for not accomplishing goals, beware of that new hire demanding that it is impossible to sell more, improve customer service, or generate more revenue because the current employer doesn’t have the products his big bank had. Why can’t the smaller bank have six people in Finance spending their full time careers on management reporting? Well, you know why.

My observations are not meant to make community and mid-size bankers gun shy about hiring a BBB. They can and often do add tremendous value and insight. Just be on the lookout for where the BBB background is adding value to the organization and encourage those behaviors. If it’s not, sooner rather than later might be a good time to nip that BBB in the proverbial bud.

Mr. Sommer is president and chief executive officer at Cornerstone Advisors, Inc., a Scottsdale, Ariz., based consulting firm specializing in bank management, strategy and technology advisory services. He can be reached at [email protected].