“If we want to keep community banking, culture is the key,” said American National Bank – Fox Cities CEO Paul Northway. “There’s going to be a generation of business owners who don’t care about the interest rate, but care that their bank’s values align with their own.”
Culture has drifted in and out of the business world’s limelight for decades, but it’s back in the hot seat today because of the massive disruptions being caused by the coronavirus pandemic. Culture is essential for smooth business operations in a volatile, uncertain, complex, and ambiguous (VUCA) environment. Northway says the bank’s culture, built on its values, guides him and his staff through tough situations. “Everything does start with the ‘why’ and that includes your culture,” he explained.
“Culture is how things happen in a business and how people are treated,” explained Carver Smith, partner at Baker Tilly Search & Staffing, LLC. “You have a culture. Whether or not you define it and work on it is up to you.”
How can banks begin to build culture amid disruption? It starts at the top and involves everyone in the institution. Ken Thompson, president and CEO of Capitol Bank, Madison, calls company culture a team sport. “Everyone contributes, and one person can have a huge impact, negatively or positively,” he said. Thompson recalls the critical importance of culture being a surprise when he took on the role of president in 2003. “Culture wasn’t something I worried about much, but once I was in charge, I realized it’s the glue that keeps organizations thriving,” he said.
Northway has a similar perspective. “It’s the primary responsibility of the CEO to be the caretaker of the culture,” he said. “It has to start with the CEO.”
In practice, that means leaders must be actively engaged in building and sustaining the culture of their organization. “Leaders can’t hide in their offices and hope that it’s just going to work out,” said Smith. Instead, leaders must communicate—early and often—to foster transparency and empathy. Candid dialogue about circumstances, challenges, and opportunities engages staff and prevents them from filling in information gaps with their own (possibly inaccurate) narratives. Smith recommends as a best practice having those candid and/or difficult conversations live, either in person or over video conferencing software. “Email doesn’t have the ability to convey what the other person is thinking and allow you to adjust,” he explained.
What if the culture isn’t defined yet? Leaders should start with the institution’s mission and values to build their vision of the company culture. “The values are the core ingredient that drives everything,” said Northway. “It makes the culture sticky.”
Capitol Bank revisited its employee-written mission, vision, and values statement recently, an endeavor Thompson said was difficult but invaluable. “We had a task force present it to the staff multiple times, which took at least a year,” he said. “Then we broke our values up into different inter-departmental teams who presented at staff meetings about why they’re important.” The exercise gave employees a sense of ownership over the updated values and consistently reinforced what kinds of behaviors aligned with those values.
Tactically, being values-centric means attaching visible behaviors to those values and consistently supporting them. “It starts with celebrating examples of behavior that define your culture and quickly addressing behaviors that don’t align,” Smith explained. “If you don’t address them, it turns into bigger drama.” Recognition should be public, such as during staff meetings or in a company newsletter, and course-correction should be more private, but immediate.
Will culture help with talent management? “There is a direct correlation between culture and talent management,” said Smith. “Often it’s a disconnect between the person and the culture that causes talent management issues. Sometimes, companies don’t understand how different their culture is.”
Part of Capitol Bank’s culture is an attitude to be “constantly looking to improve and chance,” according to Thompson. So, to facilitate that, the bank just hired for a new role: Software Integration Specialist. “This role is meant to help everyone raise the bar in their utilization of technology,” said Thompson. The goal is to avoid wasting money and time on under-utilized tools that only a few super-users adopt to improve their workflows.
Culture also plays an important role in attracting new talent for existing roles. “If you’re going to attract people, especially the next generation, you’ll have to be open-minded and do things that don’t look like what’s been done all these years,” said Northway. Taking his own advice, Northway said American National Bank is bringing on a Chief Talent Officer who will be focused on overseeing the health of the company culture, including working with the marketing leader on aligning recruiting, onboarding, coaching and retaining talent with the bank’s purpose and values.
Aligning company benefits and perks to target employee demographics can help in attracting new talent. For example, a recent survey of Gen Z workers found just 30% of respondents are confident they’ll be able to repay their student loans, so companies with debt repayment benefits may be more attractive. The same survey found growth is also important to the youngest generation in the workforce, with 75% of respondents saying a manager’s coaching ability is important to them.
However, Smith cautioned against confusing “window dressing” with culture. “The fringe benefits should be a sliver of your culture,” he said, referring to things like ping pong tables in break rooms. “Culture is the employee experience in totality, how people feel and how they’re treated.”
How do I manage culture through M&A? The technical and logistical aspects of bank mergers are difficult, but merging two cultures is an entirely different kind of challenge. Smith advises bringing together the leaders of both organizations and have each person identify a strength of the other institution’s culture. This practice helps redirect any sense that one culture is getting absorbed and turns it into learning from one another to create something new.
How can leaders keep culture strong when people are working remotely? “It comes down to the same basic leadership principles, but it takes more time and effort,” said Smith. “You have to be even more visible.” Smith advises keeping activities as normal as possible, just conducted via a different channel. For example, drive-by birthday celebrations or home office selfie competitions. Most importantly, ask your team for what they need. “The more you can make your team part of the solution rather than victim to the situation, the better,” he said.
Baker Tilly US, LLP is a WBA Associate Member.
Learn more about Advancing Your Culture at the 2021 WBA Bank Executives Conference to be held Feb. 1-3, 2021. WBA's largest gathering of Wisconsin bank executives is going fully virtual! Join us as we take a new and creative approach to your annual Bank Executives Conference. Learn more or register by clicking here.