Jeff Judy

Jeff's Thoughts - June 22, 2011

Are You Ready For A Recovery?

For this issue of Jeff's Thoughts, I have asked my associate Nan Gesche Larsen to reflect on how we can capture lessons learned in recent hard times. Nan's extensive expertise in banking, training, and communication gives her a broad perspective on our industry. More about Nan here.

As we anticipate the economy slowly heading toward recovery, now is not the time for leaders to go back to business as usual before the recession. Putting your head down and turning a blind eye to what helped you weather the storm may not be in your best interests as opportunities began to resurface. Now is the time to be clear about what kept you in business, and will keep you in business, for years to come.

So what is it that kept you afloat, or even thriving, during the recession? Your customer service, excellent products, IT systems, strong policies and procedures, excellent leadership? How you weathered the storm probably had something to do with the culture and values that underlie these factors. The culture is "the way we do things around here," an understanding of boundaries, how things get done, common language, shared expectations, symbols, and more. Values help people to identify priorities and make decisions, and are a driving force behind any organization's culture.

Establishing a culture with clear values -- and sticking to them -- requires real guts. When properly practiced, values can create stress. After all, they limit your strategic and operational freedom and constrain the behavior of your people. And they demand constant vigilance. I agree with Patrick Lencioni's view, shared in a Harvard Business Review article a few years ago: "Values need to be integrated into every employee-related process - hiring, performance management systems, criteria for promotions and rewards, and even dismissal policies. From the first interview to the last day of work, employees should be constantly reminded that core values form the basis for every decision the company makes."

So what does this mean to you? It means that before we move forward we can't forget to look behind us. Even if we are switching directions, we need to understand where we came from to get to this point. Where do you start?

  1. Capture lessons learned. The recession may have forced you to take a hard look at what you do and the customers you serve. What did you learn from the experience? What went well, what could have been handled better? Where were actions frequently inconsistent with your values? What did you do, what did you stop doing, that can serve you well going forward?
  2. Live the lessons. Do employees know the values you espouse? In my own training sessions, I have frequently found that with the company name removed, most participants cannot tell their own mission, value, and strategy statements from those of other participants. Living the lessons is more than a onetime event, it is more than a memo or a meeting or an "initiative." Does the leadership model a consistent message around the bank's values? Does management share stories about what does and does not represent your culture? Are crises managed according to culture and values, or do they provide excuses to bend those values?
  3. Confront contradictory behavior. How does the bank even know whether employees live out the values? What actions do their supervisors take to detect and correct problem behavior? Do you have the courage to reinforce values by actually hiring, promoting, and if necessary, dismissing individuals on the basis of their adherence to those values?

Your values have been tested, refined, and strengthened by the recession. In today's labor market, you should be able bring in and advance individuals with the values you want, and eliminate those whose actions are inconsistent with your values.

Make no mistake: being clear about your values and living them is challenging. It is far more difficult, long term, "to be clear and unapologetic for what you stand for," as Lencioni puts it, than to cave into short term temptations. But it is worth it.