Should Community Banks take the Planet Fitness Approach?

ID-100334953Recently, an acquaintance told me that he and his significant other had joined Planet Fitness.  There is a Planet Fitness near my home, and I had seen their television commercials, but had never visited their location.  Curiously, I asked him questions about it.  Here are a few highlights.

Judgement Free Zone ®

Planet Fitness claims it not a “gym” and their Judgement Free Zone ® tagline firmly stands behind it.  That means, no outside trainers and heavy lifting (i.e. deadlifts and cleans) is highly fround upon; in fact, “grunting” is prohibited.

The Daily Show had a hilarious report on this very subject a few years ago:

 

The concept of Planet Fitness it to create a welcoming environment to either:

  • People new to working out
  • People who just want a causal, laid back gym environment

In other works, gymrats and crossfitters aren’t the target market for Planet Fitness.

Laid Back. With my mind on my money and my money on my mind!

Planet Fitness is using a “laid back” approach that other businesses and non-profits have been applying for years. Take Non-denomiational Christian churches for example; there is one church in my city that separates itself by telling people to “Come as you are.”  In fact, they have even hosted nontraditional meetings in a bar and call it “Beer Church.”

How does this apply to banks?

There are two lessons banks can learn from this approach.  Intimidation and target marketing.

Intimidation

What’s more intimidating than going to a gym?  How about asking a complete stranger for money.  Isn’t that essentially what a loan is?  A person walks into a “Financial Institution” and literally pleads their case to borrow money.

What if a bank were to make banking, particularly lending, less intimidating?  There are several ways of doing this:

  • In Branch Financial Literacy Classes
  • Participating in Get Smart About Credit
  • CRA Initiatives

The list can go on and on; but first, there must be a mentality, a company culture that welcomes these approaches, otherwise it is just blowing smoke.

Target Marketing

A hot, dynamic term in marketing, especially with community banks.  But how targeted is the marketing approach? Let’s consider home equity lines of credit (HELOC).

  • Do you expect someone with a $150,000 home to be the same type of person who owes a $500,000?
  • Do you think a 50 year old married couple with three children in their late teens to mid 20s have the same needs/wants as a married couple in their early 30s?

If not, why do banks consistently market to those customers the same way?

Banks throw a huge advertising net that includes phrases like, “remodeling, vacation, tuition cost” and the list goes on and on.  Instead of trying to jam as much information out there, wouldn’t it be better served to create a message directly targeting a specific market?

Start with your current customer base and/or with the communities you serve.  Is there a specific demographic you are trying to reach?  Once you answer that question, find out what connects each person in that demographic.

Again, go back to HELOCs.  If you already have a customer base, then use a prospecting tool to gather information.  In this case, let’s say a prospecting tool is used to find out where this customer base lives in your area.  From there, use tools to communicate your message to this audience.

  • Direct Mail Postcards
  • Google Adwords targeted to the Zip Code and street address
  • Display Advertising that can be targeted via location AND by common interest

If you are interested in learning more about prospecting tools, then check out CRS Data’s Banker Suite program.  The Banker Suite contains a prospecting tool that allows banks to search for certain criteria within different counties.

So, take the Planet Fitness approach and pump up your marketing results and beat the flabby ads approach.

 

 

 

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.

Sporting Leadership: Mark Cuban vs Jerry Jones

Cuban and Jones HugWhen I think of professional sports and leadership, two Dallas owners come to mind: Mark Cuban and Jerry Jones.  Just like the state of Texas, both men have big, bold personalities.  Cuban and Jones are also known for winning and taking their teams to the next level of success.  These two leaders have taken different paths to make their teams great.  Here are just a few examples of what they have done; both good and bad.

Jerry Jones: The Micromanaging Visionary

When Jones bought the Dallas Cowboys back in 1989, he had a vision, that led to an unpopular decision.  He fired longtime head coach Tom Landry and replaced him with Jimmy Johnson.  Though fans didn’t understand it at the time, this decision allowed Jones to start fresh and put together a coaching and administrative staff that would follow his vision.  Jones was very hands on and the combination of him and Coach Johnson led to great draft picks and all-star players.  By having the team follow his vision and running on all cylinders, the Dallas Cowboys won two back to back Super Bowls (XXVII and XXVIII) and won Super Bowl XXX.

Micromanage Pitfall

jerry_jones_sideline

“…any one of 500 coaches could have won those Super Bowls”

Jones created a winning dynasty in Dallas.  He had the right players with Troy Aikman and Emmett Smith.  He had the right coach with Johnson.  What happened that caused the dynasty to collapse in Dallas?

Micromanagement.

When things started going wrong with his coach, he started roaming around the sidelines questioning everything.  He eventually pushed out Coach Jimmy Johnson, the man who helped execute the vision of the team’s success.  Though the Cowboys won a Super Bowl without Coach Johnson, they slowly started running downhill and haven’t truly recovered since then.

Cuban: The Passionate Instigator

Casual CubanMark Cuban became the majority stakeholder of the Dallas Mavericks in 2000.  Before that time, the team had a losing record (40% games won) and was swimming in a sea of mediocrity.  With his drive for winning, Cuban has been able to turn this team around and they keep showing up in the NBA finals.  In 2011, the team won their first by NBA Championship by dethroning “King” James and the heralded Miami Heat.

Standing Out from the Crowd

“Wherever I see people doing something the way it’s always been done, the way it’s ‘supposed’ to be done, following the same old trends, well, that’s just a big red flag to me to go look somewhere else.”

Mark Cuban has never blended in with a group; which has led to his success.  For example, Cuban realized to get the right players  he had to recruit in a different way.  One of those ways had to do with the locker room.  The Dallas Mavericks have one of the most expensive elaborate locker rooms in all of professional sports.  While others questioned why would spend so much money on a locker room, he was busy using this as a recruitment and retention tool.

Not blending in has also caused Cuban to create unneeded controversy, including his most recent comments that led to him apologizing to the family of Trayvon Martin.

IMG_4005-419x314Both Jerry Jones and Mark Cuban are passionate about their businesses and their teams.  This passion has led to success in their respected fields.  There isn’t anyone who can say that Jerry Jones has not lived up to the vision he has had with the Cowboys.  The same can be said about Cuban when it comes to inspiring people to live up to their fullest potential.

Which owner would you categorize yourself as the most?

Drafting the Right Person

NFL_DraftThe 2014 NFL draft is now in the rear view mirror.  Did your team(s) select the right players?  As a Titan’s fan, I’m always left guessing but overall, I’m happy to see they picked a strong running back, and time will tell if Zach Mettenberger is a good pick.

When hiring for your organization, do you treat it like the NFL draft?

Though not as glamorous as the draft, there are some pointers from the draft that you can apply to your job searching process.

Do your research

Scouting_FootballNFL teams spend countless hours and a small fortune on scouting.  They research players, view their performances and decide if the player would be the right fit for their team.

Should you treat your job search any different?

When interviewing for a position, a candidate will submit a resume and fill out an application.  Since they have done their part, you need to do your part and conduct research.

  • Call former employers:  If you call the HR department, most likely you will receive a boilerplate statement, “Candidate worked from point a to point b.”  But if the candidate has the supervisors name listed, why not call them too?  If they left on good terms, then the direct supervisor may give a more accurate picture.
  • Call references: People often chuckle when I mention this one due to the fact that references are hand picked from the candidate.  I don’t disagree with their logic, but I challenge them to be creative when reviewing the references by seeking the answers to the following questions.
      1. How long have they known the person?
      2. How they know the person?
      3. Can they give an example of the person’s work?
      4. Can they explain the person’s character?

If you get those answers from different personal references, you can get a better understanding of who the person is.

  • View LinkedIn: Hiring based upon social media sites has recently been scrutinized; however checking a LinkedIn site can help you get a a better idea of who someone is.  Also be sure to review written recommendations; though I would be cautious of endorsements due to how easy it is to endorse someone on LinkedIn.

Draft Someone Who Fits In

Quarterbacks_DraftDuring the first night of the draft, Jon Gruden kept questioning why teams had not drafted Johnny Manziel.  Gruden’s question was finally answered by the Cleveland Browns when they picked Manziel in the 22nd spot.

But why didn’t the other teams pick Manziel first?

The Jacksonville Jaguars had the opportunity, but chose quarterback Blake Bortles instead.  But why Bortles over Johnny Football?

It is simple, Manziel wasn’t what they were looking for in their draft pick.  The Jags needed a quarterback who they could develop into their system and could prevail when faced with certain adversity issues.  Take a look at some of the performance examples of Blake Bortles.

  • No injuries: While at UCF, Blake was sacked over 50 times!  Despite this issue, he was never injured.  This may seem like a laughable point, but considering that Jacksonville has offensive line issues, this statistic bows well for Blake.
  • Performance under pressure: In addition to the 50+ sacks, Blake was able to complete over 50% of his passes while under pressure from the defense.  This puts him in the top five amongst Automatic Qualifying (AQ) conferences.
  • Comeback Kid: Continuing with the under pressure theme, Blake had six second-half come from behind wins last season.  This ties the record with the most in college football for the 2013 season.

Add these examples to the fact Blake played college football within a two hour drive to Jacksonville and you can see why the Jags chose Blake Bortles.

Similar to hiring, you have to find the person who fits your company’s culture; not just a person who can fill an open position.  Many times companies will hire a rising star in their industry and then be dissatisfied with their results.  Don’t be fooled by a rising star and instead look for someone who has the natural fit for your company culture.

Does your company handle hiring like this?  When hiring, what strategies have you used that proved to be successful?

Lead Like Charlemagne

543088_Charlemagne-Crowned-By-Pope-Leo-III-Dec-25-800Over the weekend while watching a documentary of the Dark Ages, I was reminded about Emperor Charlemagne and the lasting impression he left in Europe.  Charlemagne was the first European Emperor after the fall of the Western Roman Empire and brought unity to Europe; though it came at a high price.

But what can business leaders learn from Charlemagne?  Here are a few concepts taken from Charlemagne that can help you and your business succeed.

Religious Conversions: Company Culture

To make sure everyone was on the same page, Charlemagne would convert conquered lands to Christianity.  By “convert” he would give people a choice, follow his God or die.

Though this is an extreme example, it does stand to point that this level of unity helped keep Charlemagne’s rule intact.  Everyone held the same beliefs, publicly had the same values and followed the same rules.

It’s similar to a strong company culture.  By establishing what your company stands for by creating standards, values and believes, you give your staff a general understanding of what you expect of them…just don’t execute them if they fall short.

County Leaders: Accountability

Charlemagne divided his land into several counties and put a person in charge of each county.  He would frequently visit each county leader to see how they were ruling the land and hold them accountable.

This type of hands-on leadership allowed Charlemagne to stay connected to his people and stay ahead of any forseeable issues. Would Charlemagne’s rule have been as vast and long if he would have just stayed locked up in his castle?  Probably not.

Take a page from Charlemagne’s book and let your leaders lead.  True leaders lead those around them by giving them a level of responsibility, examines how that person handles situations, and reacts accordingly.

Education: Education

Charlemagne understood the importance of education.  When coming into power, he was one of only a very small group of leaders that actually learned how to read.  During his time, only monks and other religious leaders placed an importance of literacy; but Charlemagne understood that knowledge is power.

As a leader, it is important to understand that you must always quench your thirst for knowledge.  Reading, taking classes and having a good mentor are just a few ways to continue your educational path.  Learning shouldn’t just end with you, rather you should make sure those around you are seeking knowledge as well.

By creating an accountability system and establishing an educational foundation, you will start laying the foundation of a strong company culture.  You may not become the Emperor of Europe, but who wants that anyway?

Which historical leader do you look to for business and/or life lessons?  Is there a historical leader who’s traits you admire?  If so share your opinion in the comments section.

Company Culture: What’s Your Game Plan

Do you know your company’s culture?  Is it a game plan for success?

Vince-Lombardi-Teaches-St-007If the answer to your first question is “Our company doesn’t have a culture,” then consider this: whether company does or doesn’t have an organized culture, there is a company culture.  That type of culture has a staff that does to work everyday and “wings it.”

A football team doesn’t just go onto a field and “wing it,” they come up with a game plan.  Successful teams create a strategy to win time and time again.  The strategy is based around an overall culture.  Should businesses be any different?

Vince Lombardi, one of the most successful NFL coaches, had a quote that summed up the culture he built with the Packers.

Build for your team a feeling of oneness, of dependence upon one another and of strength to be derived by unity.

A company’s culture should focus on growing business while fostering a positive and motivating work environment for the staff.

Drawing Up Plays

game-planOnce a company decides what its culture should be, it needs to create a game plan that supports the culture.  A game plan can consist of different components ranging from vision/mission statements, company values, and action plans (both short-term and long-term).

Football is no different, once a culture is decided, a team creates plays that mesh with the culture.

Playing Offense: Sales and Service

In football, you got to score points to win games.  In business, you got to close sales and keep customers to stay alive.

A strong offense requires a football team to establish a strong running game.  When a team has a successful running game, it opens up passing plays and allows an offense to run on all cylinders.

How does this translate to business?  Think of the running game and passing game as sales and customer service.

  • If customer service is lacking, then the moment a your company earns a new customer by closing a sales deal, the customer will be lost due to poor service.
  • If your company gives great customer service, but never ask for new business, then your company cannot grow and be profitable.

Successful companies know that customer service and sales goes hand in hand.  Since all businesses and people are created differently, you first need to know what your customer base looks for in great customer service.  Once you find that out, you can draw up strategies focused around that and tie it back in to your company culture.

Playing Defense: Operational Support

Depending on the size of your company, there may be certain members of the staff that doesn’t interact with customers on a regular basis.  In a way this section of you company are your defensive players.

  • Accounting Department: Watching what the company purchases while making sure the company is in the black instead of in the red.
  • I.T. Department: Protecting the company from viruses and providing strong computer networking infrastructures.
  • Human Resources: Making sure your staff is properly prepared to provide customer service.

Though these departments don’t interact with customers directly, it is important that they understand the company’s culture and more importantly how their departments contribute to growth of the company.

Motivating Your Team

Lombardi with TeamCoach Lombardi was a strategist, but also understood the importance of motivation.

Coaches who can outline plays on a black board are a dime a dozen. The ones who win get inside their player and motivate.

Your company can have the best products and services in your industry, but if you do not have a motivated staff, your company is worthless.  Motivating a team takes communication and accountability.

Communication

In order to motivate your team, you have to communicate with them.  Communication isn’t just telling them what their goals are and waiting for them to come to you.  It takes a little more than that.

  • What motivates your team? Find out what motivates your staff.  In order to do this, you have to open up and listen to them.
  • Set goals.  Set appropriate goals that align with your company’s culture and reward your staff based on their motivation factors.

Once you have established these two points, you can then continue motivating by creating an environment based on accountability.

Accountability

Holding a team accountable doesn’t mean only meeting with them when they fail.  An organization that excels in accountability provides a team with information on how to achieve, praises an individual or team when they succeed and coaches someone when they fall short.

  • Praise: Publicly acknowledging a job well done by tying it into the company’s culture and the individual’s motivational preference.
  • Coaching: Private session on how an event or project went, what went well and what could be improved.  The goal of this is to correct an issues may hurt future future performance.

When you are searching for ways to motivate and creating an environment of accountability, you have to walk a fine line.  For example, you cannot come across as a micro-manager to someone who does performs better with little supervision.  This creates a workplace that demotivates and possible leads to good people leaving your organization.

By combining effective communication with an accountability environment, you create a team that is empowered and capable of great performance.

Do you have a game wining company culture?  How do you provide great service to your customers while motivating your staff?

Company Culture: Use the Force

What’s your company’s culture?

The word culture is a hot term in business and for good reason.  Creating a company culture allows everyone to be on the same page and establishes a strong sense of community within your organization.

But a culture of a company isn’t a bunch of words placed in a strategic plan and laid to the side to review once every 12 – 18 months.  Think of it like “The Force” in Star Wars.

Obi_WanIn the words of Obi Wan:

The Force is what gives a Jedi his power. It’s an energy field created by all living things. It surrounds us…it binds the galaxy together.”

Lay the Groundwork: Learn About the Force

In Star Wars, The Jedi answered to the Jedi Council.  The Council laid out the purpose of the Jedi and reinforced the values of using the Force for good, not evil.  As mentioned before, everyone has to be on the same page.  Similar to the Jedi Council, this starts with the top of your organization and must work its way throughout the company.  Three keys to laying a strong foundation are:

  • Vision Statement:  This must be a quick statement that visualizes what your company is and, more importantly, what your company wants to achieve long-term.
  • Values: Establish a set of values that complement and lead to your vision statement.
  • Standards: Create a list of standards that people follow and abide to on a day to day basis.

As your organization lays out this foundation, get input from you entire staff.  This establishes a strong foundation by allowing everyone to be a part of the culture.

Communication is Key: Remember Your Training

When Yoda was training Luke Skywalker, Yoda would always communicate why something was important.  He would push Luke’s limits while constantly dropping knowledge about The Force.

I once worked for a bank chairman who said it took 27 different ways to say something before someone understood it.  He would communicate the same message over and over until everyone in the company not only knew what he was talking about, but would also communicate the same message.

By no means was this chairman a Jedi master, but he did prove a valuable point: When it comes to creating and building a culture, the more communication, the better.

Verbal

  • Company Group Meetings
  • Department Meetings/Huddles
  • Sales Training
  • One-on-One Coaching Sessions

Written

  • Strategic Plan
  • Emails
  • Intranet Articles/Internal Company Blogs
  • Job Descriptions

It takes a combination of verbal and written options in order to effectively communicate your message.  Be creative and consistent with how you communicate the importance of your company’s culture.

Expect Friction: Beware of The Dark Side

Anger, fear, aggression; the dark side of the Force are they.  – Yoda

darth-vaderWhatever your culture, it must be positive and encourage your staff to grow professionally.  This is not an easy job and a times people within the company will question and even fight the company culture.

As frustrating as it may be, you have to find out why people are against your company’s culture.  There are certain factors that can lead to anger, fear and aggression.  Here are a three comments you may hear and experience.

  • Change isn’t easy (Fear): The majority of people don’t like change.  That’s why it’s important to have constant communication and keep communication open by listening and responding.
  • Don’t like the direction the company is heading (Anger): If someone states this, then make sure they understand why the company’s focus on culture is necessary.  If they understand great.  If they still don’t like it, then you may want to suggest they work for another company that aligns with what they want.
  • I don’t care and I’ll just keep doing what I’m doing (Aggression): This is a combination of point 1 and 2 but can come across more aggressive.  Start by communicating, as mentioned in point 1 and if that doesn’t work, follow up with a more serious conversation, as mentioned in point 2.

Let’s face it, your company already has a corporate culture. The real question is: are you leading your company’s culture or is your company’s culture untamed and hurting your company?

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