Up with People!

It’s annual report season again. I’ve read dozens of ’em lately and I’m paying particular attention to a section that often gets short shrift: the CEO’s letter to shareholders.

Sure enough, once again most CEOs tout the importance of their employees. The theme has become a cliché of the genre: “Our people are our most important asset!”; or “At Hogswaggle Bancorp, our people make all the difference!”; or “Our job isn’t financial services-it’s attracting great people!”

By now, the eyes glaze over upon reading the phrases. The problem, of course, is that most CEOs don’t mean a word of it-whether they know it or not. The bromides are simply feel-good throwaways inserted by ghost writers as a supposed morale picker-upper.

That’s too bad. People do count. At essentially all the great financial services companies I know, the vast majority of the work force is truly “engaged” in what it’s doing. These employees provide superior customer service-perhaps the most powerful competitive advantage a banking company can have.

How do the best ones do it? Two books, What It Takes to Be #1, by Vince Lombardi, and First Break All the Rules, by Marcus Buckingham and Curt Coffman, on entirely different subjects (football and employee engagement), reach essentially the same conclusion about the three most important factors. I’ve added a fourth. Follow these rules, and you’ll be on your way to having a truly motivated and effective work force, and your company will turn into a superior corporate performer.

1. Hire for attitude-don’t settle-and train for skill.

I’ve found that superior customer service financial services companies devote more resources to developing their people than average companies do.

Commerce Bancorp, an industry leader and longtime favorite of mine, always makes sure to have more employees than it needs, so local managers aren’t forced to have the wrong person in the wrong spot for lack of an alternative. During the interview process, if the candidate does not smile within the first few minutes, the hiring process is halted.

At Umpqua Bank, CEO Ray Davis has hired Ritz-Carlton personnel to teach his branch managers how to deliver top-quality customer service. In Umpqua’s view, the winning difference is often in tiny details. For instance, Umpqua’s tellers give customers their receipts on a tray-alongside a chocolate.

2. Tell the employees exactly what is expected of them.

I mystery shop a lot and am always amazed how often I run into “that’s not my job” as an excuse for why I can’t get something I want. I’m the darn customer!

The problem is that employees haven’t adequately been told what’s expected of them. Great customer service providers have a lot in common with great football teams: Everyone has a specific assignment on each play-but once the play is in motion and unexpected events occur, players improvise to make the play work.

Walk into a couple of your company’s branches sometime and see how your employees are doing. I bet you’ll find inconsistencies among employees who putatively have the same job. Plus, they’ll likely give you a list of tasks they’re supposed to perform, rather than refer to a level of customer experience they’re supposed to provide.

3. Give employees the tools to succeed.

Not only do the best firms invest wisely in technology so their employees can provide superior customer service, they empower them to change the play at the line of scrimmage if that’s what is needed.

Most management teams don’t spend enough time deciding what employee actions are nonnegotiable and which are left up to the employees. At Umpqua, for instance, line employees each have a $250 budget that they’re expected to spend to enhance customer service levels. Some even use the money to send flowers to customers. It sounds trivial, but Umpqua’s customers are crazy about their bank.

4. Reward and recognize performance at all levels.

Studies show that in any organization, at any level, the difference in performance between the top 10% and the bottom 10% of employees is 6 to 8 times! But these top employees are often at risk of leaving the organization if they believe their rewards aren’t commensurate with their level of contribution. Recognition programs must differentiate between the good, the very good, and the great!

While monetary compensation is important, the best companies go out of their way to celebrate individual and team performance with noncash benefits. For example, Portfolio Recovery Associates, a debt-collection company, allows its top collectors to choose their own hours to work. This can be a powerful incentive to certain employees, such as single mothers.

It’s easy to say your employees are the key to your success-because they are! But if you want your company to be among the most successful, you need to hire for attitude, tell employees exactly what you expect of them, give them the tools to succeed, and reward and recognize them for their performance. Those are powerful steps toward building a winning organization.

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