Rich Rod and Commercial Lenders

Coach Rich Rod AngryWhat does Coach Rich Rodriguez and commercial lending have to do with one another?  Better yet, how can banks learn from his career history when it comes to hiring a new commercial lender?

Let’s start with the latter and work our way back to Rich Rod.

Commercial Lending Hires

Since working in banking, I have seen two schools of thought in the hiring process of commercial lenders.

Hiring From Within

When a commercial lending position opens up with the Bank, the position is filled with a banker who wants to be a commercial lender.

Pros

  • Promotion: The bank can raise overall morale by promoting someone that already works for the bank.
  • Culture: The new commercial lender already knows the culture of the bank, will have a rapport with bank staff,  and will understand the expectations of the position.

Cons

  • Training and Development: The new commercial lender will need time to learn the position and develop into a commercial lender.
  • No Portfolio: The new commercial lender comes with no established customer portfolio, which can slow down production in the loan pipeline.

Due to the cons of hiring from within, a bank may fast track the learning and customer portfolio curve by hiring a seasoned, experienced commercial lender

Hiring Outside the Company

A bank may want to see an immediate spike in their loan pipeline and hire a commercial lender from a competitor.

Pros

  • Immediate Pipeline: An established loan portfolio can lead to new loan revenue from the lender’s current customers that are not bank customers.

Cons

  • Culture Shock: The commercial lender needs to learn the culture of the bank, learn the processes and build a reputation with the staff.
  • Lack of Loan Revenue: Just because the new lender has a customer base at their previous bank, doesn’t mean they can easily bring their customers with them.

Regardless of the decision, a bank is rolling the dice when hiring a new lender, but let’s compare the previous two examples with the coaching career of Rich Rod.

Early Success at WVU: Hiring from Within

Rich Rod WVU ThumbRich Rod was hired as WVU’s head football coach in 2000, but that wasn’t his first experience as a Mountaineer.  Here are the highlights of Rich Rod’s life before accepting the head coaching position at WVU:

  • A native West Virginian
  • Attended WVU and played defensive back for the Mountaineers
  • A student assistant coach
  • Served as a volunteer assistant

Rich Rod was a logical choice for WVU and during his time there, the Mountaineers exceeded expectations by dominating other teams in the Big East and becoming a nationally ranked top football program.  He was able to hit the ground running due to his long relationship with the Mountaineers.

A Michigan Rocky Ro(a)d: Hiring Outside the Company

Rich Rod MichThe University of Michigan saw the winning record Rich Rod had at WVU.  The Wolverines wanted a winning coach and had heard Rodriguez was getting frustrated with the new President at WVU.  They made the coach an offer he couldn’t refuse, and Rich Rod officially replaced his West Virginia blue and gold for Michigan’s gold and blue.

Rich Rod only spent three years as the University of Michigan’s head football coach.  What happened?

Short Sighted Vision

Michigan wanted a winning coach and they knew Rich Rod already looked good in blue and gold.  Seemed like a winner, right?  What Michigan didn’t realize was that Rodriguez’s offensive strategy, the spread offense, didn’t fully match the football players at Michigan.  This would require a change in players and in staffing.  In fact, players ended up leaving Michigan, citing “offensive behavior” but one has to wonder if it really had to do with “offense changes.”

A move from traditional offense to a spread offense doesn’t happen overnight, it takes seasons to accomplish.  Unfortunately for Rich Rod, the Wolverines didn’t have the patience to see it pan out.

Culture Clash

It is well documented that Coach Rodriguez didn’t get along with the Michigan environment.  He wasn’t a “Michigan Man.”  He didn’t plan on conforming to what boosters and the Michigan administration and boosters wanted from their coach and it came back to haunt him.

Learning a Lesson: What Works for You

This is just one example of several when it comes to hiring.  Just because it didn’t work for Rich Rod and Michigan, doesn’t necessary mean it will not work for your organization.  Shoot, look at what Rodriguez is doing at Arizona.  To date, they have had two winning seasons, and this season they have the opportunity to win the Pac-12 Conference Title.

If your bank does decide to hire outside the company to fill a commercial lending position (or any other position), consider the following points

  • Thorough background check: Go beyond the credit and criminal check, get to know the person.  Find out if they are going to be a good fit for the position and your organization.  Do they have the same values as your company?  Will they fit in with your bank’s strategic plan?  To answer these and other questions, you will have to have several interviews and include different people to sit in on the interview.
  • Loan Portfolio Review: There is no true way to review someone’s loan portfolio before you hire them.  That said, it is important to have some level of due diligence to ensure the new commercial lender’s customer base matches your bank’s target market.  If your bank is focused on growing commercial and industrial (C&I) loans by creating relationships with manufacturing companies, it may not be in your bank’s best interest to hire a lender who only focuses in commercial real estate (CRE) lending.

Hopefully this Rich Rod metaphor helps you and your organization the next time you need to find your next commercial lender.

Advertisements

About Jeremy M. Price
For twelve years, I had the pleasure of working in community banking. Starting in customer service, I worked my way up to a senior level marketing and human resources director. It was great leading teams that improved strategic initiatives including, but not limited to brand awareness, digital communication, employee development and product development. This experience has now led to an exciting role with CRS Data. As the Product Marketing Analyst, I am currently reviewing the company's banker suite product. This product is able to help community banks reach their fullest potential in real estate lending. I am extremely fortunate to share time with my son while enjoying life in East Tennessee. The two of us enjoy the views of the Smokey Mountains, eating good food and having fun. During my free time, I enjoy running races, traveling and listening to great live music.

One Response to Rich Rod and Commercial Lenders

  1. Pingback: Commercial Bank Branding and Football Logos | JuMP Around

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: