Working Smarter, Harder, and Right: Half the Battle: Successfully Tackling the Human Element

[ILLUSTRATION OMITTED] The last thing a community banker wants to hear from a new customer is that he thinks he made a mistake picking your bank. Yet that's just what Josh Guttau's people told him one new commercial customer was saying. Staff had to go back to this customer not once, but twice to get essential information about his business. And he began having misgivings. He finally said, 'I'm not sure want to bank with you guys if you can't get these things right the first time,' says Guttau. It might have been a sobering slap in the face. for Guttau, president and CFO at Treynor (Iowa) State Bank, it was merely confirmation of something he'd already observed. His frontline staff worked too fast. For some reason, they felt that they needed to be getting the client out the door as quickly as possible when opening accounts, says Guttau. And they were succeeding at that self-imposed mission, he continues. But they were speeding things up so much, they were leaving things missing so that staff in the backshop were having to fix all those items at the back end. Managers scratched their heads. We wondered, 'Where is this attitude coming from?' Guttau says. The bank was working with process experts from a firm that Guttau's family had worked with on a project for a manufacturing company that it holds a part-interest in. The Guttaus asked them to adapt their techniques to the family's $260 million-assets bank. In assessing the state of affairs at the bank on arrival, the consultants found that the frontline team had concluded that their job was to serve people quickly, because everybody is in a hurry. Well, that wasn't the case, says Guttau. is not like selling people Ho Hos and Twinkies in a convenience store. This is their financial life we're talking So, one of the early fruits of the consultants' work was clarification to the frontline that it's not only acceptable, but desirable to spend more time with clients. Don't think for a moment that Guttau and his advisors haven't been interested in improving processes and throughput. a critical lesson and mission has been to not lose sight of the goal: efficiently serving customers. Indeed, Guttau says the consultants' process advice turned around the bank's human-resources planning. The consultants' flow charts and calculations gave the bank new ways at looking at things. In the end, Guttau says, I went from telling our management team that we needed more bodies to realizing that we were 20% overstaffed. Layoffs? No; the family bank isn't about that. Instead, Guttau views the surplus as the reserves he needs to have in place as his organization continues to expand its horizons. We have capacity to grow into, he explains. If we can grow to utilize that staff, we'll be where want the bank to be, in terms of my target for our net overhead expense ratio. Beating the numbers In its yearend 2012 Community Banking Study, FDIC dwelt on the gap it found in comparing community banks to non-community banks. In discussing efficiency, productivity, and economies of scale with Guttau and five other community-bank leaders in a roundtable discussion, bankers made two things clear. First, they know they need to improve their efficiency ratios-none had a ratio they wanted to brag about. And they have all been working on it steadily, in many ways. second, they recognize that community banks can't strictly play by the numbers. They need to recognize that their customers are their business, and that all efforts must revolve around that fact. And they also recognize that when tweaking for performance, you can't manage to national norms; you must be in synch with your own market. You can't force efficiency You may be able to guide a river, but you can't force a river. …