FOURTH QUARTER 2001 ASSACHUSETTSASSACHUSETTS MMTHE MAGAZINE OF THE MASSACHUSETTS BANKERS ASSOCIATION BBANKERANKER The Entrepreneurial Banker: Oxymoron or Opportunity?

By Theodore A. Rosen tomer relationships and acquiring new Wouldn’t it be nice to have a team of his article is devoted to the notion customers. Instead of becoming his commercial loan officers that consistently that the world of banking is funda- “home,” the office becomes a waypoint be- displayed these characteristics? By creating Tmentally different than it was only a tween spending time with customers and entrepreneurship you can. few years ago and that the successful prospects and spending time in the com- banker of the new millennium will do munity developing business. This banker Making It Happen business differently than has the tools, the discipline and the com- Change doesn’t come easy, and cultural he or she did before. mitment to succeed in the “brave new change is especially difficult. It takes com- Perhaps the most sig- world.” mitment, consistency and tenacity. At the nificant difference is the heart of entrepreneurship is the notion fact that for most small- Crossing the Cultural Chasm that people will succeed or fail based on and mid-sized banks So, how do you turn Model A into their own efforts and that there will be a there is a whole host of Model B? One way is to let them die off difference between top performers, new non-bank competi- and replace them with a new generation. It mediocre performers and non-performers. tors, including powerful and resource- is said that Moses took 40 years to lead his This Darwinian concept may sound a bit laden firms such as Merrill Lynch, Ameri- people through the Sinai, not because it antithetical to bankers who have tradition- can Express, State Farm, UPS and BMW. took that long to walk, but rather he ally spurned things like incentive compen- While the passage of the Gramm-Leach- wanted to deliver a people unto the land of sation, but it clearly works. Jack Welch, the Bliley Act did not create this trend, it cer- Israel that knew neither slavery nor idola- recently retired legendary CEO of GE, fired tainly exacerbated it. The common attrib- try. If you can wait 40 years, this method the bottom 10 percent of the workforce ute among most of these companies is deep works fine. each year. While this approach might be a and abiding commitment to the sales On the other hand, most bankers are little draconian for the banking industry, a process and the tools and discipline that looking for a more immediate solution. modified version can produce great results. are required to make it work. This solution is through changing behavior and turning the Model A banker into the Tactical Elements Today’s Banker Version 2.0 Model B banker. While this requires a sig- To create this new millennium banker, In the “old days” bankers (lenders, nificant change in culture, it is not impos- you start with your current model, add branch managers and others) were largely sible, especially when you look at the driv- management vision and leadership and focused on understanding and meeting the ers of behavior. create the right environment by imple- needs of customers who happened to find menting some important tactical elements their way to the bank. This is not to sug- Creating the Entrepreneurial Banker that will change behavior in a very positive gest that there was no business develop- Most banks are focusing heavily on way. These elements are: ment effort, but it was far less important small entrepreneurial businesses as a pri- • Participation in goal setting than today. In those days the banker would mary source of growth. The men and • Control over resources come in to the office, read the mail, have women who start and run these businesses • Paying for performance and coffee and wait for the customer to come often have common characteristics known • Encouraging failure. in the door. The focal point of the banker’s collectively as “entrepreneurship.” These In the next issue, each of these elements life was the bank. Call this banker “Model individuals are typically: will be explored in detail. Stay tuned. N A.” 1. Highly driven and goal oriented In today’s world the successful banker 2. Resourceful and creative Theodore A. Rosen is president of Vertical Solutions, (call this banker “Model B”) must be con- 3. Extremely passionate about their based in Bala Cynwyd, Pa. He speaks and writes ex- centrated outward toward customers and product or service tensively on marketing and technology issues facing prospects. The banker’s professional life 4. Highly motivated because the quality community banks. For more information contact must focus on three important tasks: cus- of their personal life is highly tied to the him at (610) 771-2121 or by e-mail at tomer retention, expanding existing cus- success of their business [email protected].