Reprinted with permission. The original article appeared in the April 2006 edition of the "What Counts" newsletter published by Federal Home Loan Bank of Seattle, and can be viewed in its original format here.
Community bankers wear a lot of hats, and sometimes it is difficult to juggle different roles and functions. It’s not unusual for bank management to think that their organization is out of balance, or for individual staff members to be frustrated by conflicting demands on their energy and skills.
Balancing risk and return is almost the definition of banking, and it isn’t easy. The good news is that help is just around the corner, from experts and from peers, at the Seattle Bank’s coming Management Conference. The bad news is that not everyone benefits from an event like the Management Conference.
If you’re not looking for real return on your conference registration fee, here are five ways you can attend the conference, have a great time, and waste your time and money!
#1: Come looking for ammunition.
As I talk about “Balancing Credit and Sales Skills” at the Management Conference, I’ll probably be looking out at two kinds of participants: those who think credit quality suffers because too much attention is paid to making new sales, and those who think that bank growth is held back by an obsession with credit quality.
Each of those audiences may come looking for “ammunition,” the telling arguments that will allow them to go home and get their own organizations turned around to think the right way—that is, as they do. That’s a good way to waste some time and money, while feeling virtuous about what you’ve learned.
A more challenging, but more rewarding, approach, is to make your best effort to craft a new vision of a balance between risk and return. If you’re just looking for ways to bolster your side of an argument, you could probably stay home... as long as you don’t mind that everything at your bank remains just the way it is right now.
#2. Embrace the pendulum model.
As you have become aware that some competing pressures are out of balance in your bank, how often have you said, “The pendulum has swung too far in one direction, and now we have to push it back?” I hear this pendulum analogy all across the country, and I’m always surprised that so many key players in so many banks equate “balance” with constantly pushing the pendulum first one way, and then the other.
Picture a tightrope walker—like the one on the cover of the Management Conference brochure— holding one of those long metal balance bars, inching along high overhead. Is your vision of a good tightrope walker one who leans way out to one side, almost falls, and then swings all the way over to the other side of the rope? Or do you think a tightrope walker who is balanced, who stays centered over the rope, moving very little from side to side, is the one more likely to reach the end safely?
In your bank, if you think and talk about a pendulum, you’ll get a pendulum. That’s just another way of saying you’ll always be out of balance. If that’s the way you prefer to operate, you don’t need a conference on sustaining success by balancing risk and return. Meanwhile, I’ll continue to develop ways to achieve a steady, sustainable balance for other banks.
#3. Change your language, not your ways.
Conferences and seminars are great places to learn new ways of talking about things. Let’s face it, consultants and experts love to come up with new terms, or apply old words in new ways. Sometimes that’s marketing in action; sometimes it’s an attempt to capture your awareness and help you see things differently; often it is a combination of both.
You can feel pretty good about what you’ve learned when you go back to your bank and start modeling a new way of talking about things. But if it’s just your language that changes, your results certainly won't! Your risks will be just as high—and your returns just as low—as they were before you changed how you talk.
To take one example, I’ll be discussing “relationships” as a way to balance sales and credit skills. For some senior lending staff, a “relationship” refers to that borrower who gets rubber-stamped at every annual renewal—even though that’s a customer that doesn’t generate much revenue, and one whom you haven’t even approached about cross-selling into other products. On the other hand, you may know sales managers who think that someone with one product from your bank is a “customer,” but someone with multiple products from your bank is a “relationship.”
Using new words, or old words in new ways, to describe how you want things done is an important step. But without the second step—actually doing things in new way—it’s a waste of everyone’s time and energy.
#4. Expect returns without risks.
Talk about imbalance! It must be human nature... when we take risks, we expect compensating returns, but when we want better returns, we prefer them not to be accompanied by any kind of risk.
If you want to build sustainable returns at your bank, you’ll have to take some risks.I’m not talking about portfolio risks or investment risks. I’m talking about the risk of a little embarrassment and the risk of spending some time and money on efforts that aren’t entirely successful.
Let’s assume that you come out of a conference or seminar with some great ideas for your bank. It takes very little investment to go home and talk up a storm about your new ideas and maybe issue some memos and directives.
But if you really want returns, you may have to invest in some training, revisit your staffing model, or tweak the way you compensate bankers for their work. And any one of those efforts is probably going to take revision—your first attempts to build a stronger, more successful bank are rarely perfect. You may find that you institute some policies or deliver some training that has to be redone.
If you can’t afford the risk of not getting everything perfect on the first try—or you aren’t willing to make the investment of time, money, and personal commitment to effect true change—then you can just save a lot of time and money and not even pretend that your bank will do things differently in the future. Just keep doing what you’re doing, and you’ll get the same results you always have (or maybe not even that, if your local business environment hits some bumps).
#5. Keep your eyes and ears straight ahead throughout the event.
A good Management Conference brings together a lot of expertise. Featured consultants and managers condense the experience of many individuals and organizations into a short amount of time, enabling you to benefit from the innovations and mistakes of others.
But if all you need is expertise, you can read a book or take an online course.
Conferences bring together another set of experts—your peers. People sitting next to you may be facing situations very much like yours. Better yet, they may have taken first steps toward solutions or learned what will not work. Take advantage of all the knowledge that’s in the room, not just what’s available from the podium.
As I train bankers across the country, I not only share my knowledge and acquire new knowledge from my audiences, I often broker knowledge between parties who face similar challenges or can benefit from one another’s experiences. That’s one of the reasons that I still find conferences and seminars so rewarding, even as technology makes other delivery mechanisms available.
The Moral: Sustaining success is not a spectator sport.
I’m sure that everyone at the Management Conference will have a good time, hear some new ideas, maybe even feel a little bit inspired about tackling some of their banks’ challenges when they return to their desks.
But some of those participants will be spectators. They are fans of great ideas, but no matter how powerful the ideas they adopt, those ideas will always be on the sidelines of the way the bank works. Don’t be a fan, be a player. Good players always have more fun, and more interesting work, than great fans.
Wearing all those hats can sometimes give you a headache, for sure. Make the effort, and you’ll find that a balanced approach to sustainable success is a great substitute for a bottle of aspirin!