Leading a Culture Change in Less Than One Year?

Can an organization create a culture turnaround overnight and see immediate and tangible numbers?

Patti Steele, CEO and President of First Volunteer Bank of Chattanooga, TN, has been named this issue's Extraordinary Banker for her leadership and commitment resulting in a substantial breakthrough in her bank's sales culture. 

Patti's bank embarked on a culture shift in January of 2005.  She says, "By December 2005, profits were up 28% over 2004.  We were growing rapidly after being stagnant for three to four years. 

Deposit growth increased 11% over the previous year when our core deposits shrunk.  Today, profits have increased 44% over first quarter 2005!  All this in a market with MANY tough competitors.  All because we decided to change our culture!."               

Roxanne Emmerich asked Patti to share her insights on how she led her bank's sales culture. 

RE:  What are the most important initiatives in shifting a culture?

PS:  It starts at the top. The person at the very top of the organization has to understand that there needs to be a culture change. Then, they have to be willing to put forth all of the effort to make that change happen.

RE:  What does that effort look like?

PS:  Involvement. Our culture revolves around creating a fun environment and we continually show that to our customers.

Our culture centers on building everything around the customer's experience with our bank. We had to decide how to do that. For us, it was through our customer service team. I continue to take part in every action, step, and decision made by this group by asking "How is this decision going to affect the customer? How can we make it fun for the employees?"

As we got started I also had to get my executive leadership team to realize that we had some problems within the executive team with regard to holding each other accountable. It was either,  "Decide you are going to do this, or get off the team because we are going to go forward and can't go forward if you aren't willing to do that."

For over a year now, I've had the same message and it's consistent. Yes, we may raise the bar, but the expectations are the same. The most important element is that they feel they can achieve our bank's vision.

RE:  Tell us about a typical week.

PS:  I work closely with our customer service team. Our team is made up of a cross-section of employees. They focus totally on our bank's vision and are responsible for creating, updating and elevating service standards that guide us toward fulfilling our vision.

The leadership team chose our customer service team. We pulled them together as a unit, and they elected a leader. The leader is responsible for scheduling and running the meeting, but I attend every single session. I know everything that is discussed within that team.

The only weakness I see is that if I'm not there, it can get off-track quickly. I set the direction for our culture.  The customer service team is responsible for actually implementing the change. I always get to put in my two cents and work with them to get the best solution and celebration in place. The customer service team has been a key part of my day, week, and month over the past twelve months.

RE:  How do you spend your time today versus one year ago?

PS:  A year ago, I spent about 75 percent of my time focused on reports, numbers, and meaningless meetings. Only 25 percent of my time was spent out with my people and getting involved.

Today, only 20 percent of my day is spent reviewing reports detailing the path in which we are headed, tracking initiatives, and measuring if we're meeting expectations.

The other 80 percent of my day is spent following up on all the fun and meaningful things we are implementing-the customer service initiatives. Instead of numbers, my concentration is on the behaviors and activities that will lead us to our vision. I'm helping to shape the culture by shaping the thinking.

Today, every meeting is about getting better and having fun while we do it.  Music is blaring and the vision is proudly displayed. Every behavior or activity ties back to that vision.  The requirement of our managers is that every time they call their people together, that vision is the central point, the focus for the meeting.  Build the message for every meeting around the vision of our bank.

At our quarterly meetings, we have the same stipulations. We have a message that we convey and it remains the same throughout the entire year. Every meeting may have a different theme, but it has the same message.

Our people are hearing the same vision-day after day, quarter after quarter. They know that we are serious about it. We make sure to put the fun behind it and see they can achieve it. Our people are the ones making it happen.

The hard part for us initially was that we were six small community banks with different standards and different visions. We had no consistent way to answer the phone, dress, physical look of our branches, or in resolving problems for our customers.

Last year, we rolled out telephone, dress, greeting, branch appearance, and problem-resolution standards as explained in the Profit-Growth Banking book. The staff set the expectations, so they had the buy-in. The most important part of rolling out the standards was the hoopla before and the celebration after. We had fun creating and measuring every standard.

RE:  How do you handle employees who aren't buying in?

PS:  I use the "need a change" conversation that you taught at the Profit-Growth Management seminar. It's a tool that every manager has really embraced.  For our bank to be successful, we can only have people who really want to be a part of this process.

RE:  What changes have you seen within the bank as a result of the change in culture?

PS:  Our turnover has slowed down. Our people are a part of our culture because they want to do it. It's not just what we want them to do. They like it, too.

Our retail manager regularly conducts meetings with the branches. The fun thing is that I can come right into a meeting and start talking because I know it fits right into what she is telling them. Of course, I know this because we talked about what she was going to cover before she held the meeting. We do that so I can support her. Our people say, "Wow, they're all saying the same thing." There is no disconnect. That has been really powerful in changing our culture.

RE:  How did you get your managers to stop buying in to their excuses?

PS:  We started off with our "Breakthrough Banking" culture-shift tapes. On the leadership tape, there were several traits of a good leader outlined. We knew that we couldn't implement them all at once, so the leadership group decided on the three most important traits.

We chose setting high expectations, holding each other accountable, and not making excuses.

We keep it simple.

RE:  What do you expect from your managers today that is different from before?

PS:  I think the biggest weakness before was our failure to execute. We weren't holding people accountable. We made so many excuses for why we couldn't do something.

I think the biggest change is that we expect our managers to execute on the strategies we are putting in place. We don't call them "strategies," we call them "expectations."  We built these expectations within the last year. We call it a "brag sheet," and it outlines the expectations for each position. When someone executes on the expectations, we get to brag!  There is a common set of expectations by positions across all 20 branches.

We also set a ground rule: No excuses.

We knew we weren't going to be nailing the expectations at 100 percent the first go around. So we asked, "What is it that we want to work toward?" We then narrowed the expectation list to about half.  We announced these expectations in May 1, 2005. We ended up achieving 94-98 percent of our selected expectations by the end of the year. We achieved this within the first six months. We thought that was great. We celebrated!

Now our goal is to meet all expectations at 100 percent by the end of the year. The only way we can raise the bar is if we hold our people accountable. Look how well we did with meeting expectations 60 percent of the time-but what if we had done 80 percent?

It's getting them to think bigger and bigger all the time. At First Volunteer, that is starting to happen. People are thinking outside of their box and thinking big. That is because we have the right people on the team. They aren't making excuses.

Additionally, we hold branch manager meetings. At the meeting, managers share with their peer group how well they have done.

Our expectations are simple:
How are you reaching out to your customers?
What is it that you are getting your people to do?

An example is a teller line. Their goal, as tellers, is to handle transactions properly. However, tellers DO have down time. So we asked, "How do we want them reaching out to customers during those times?"

We decided on a goal of five outside telephone calls per week. For example, tellers call a customer with a savings account and ask if they would also like a checking account. Or they call someone who regularly comes in and ask, "I haven't seen you in a couple of days and I know you usually come in on Tuesdays. Is something wrong?" They are comfortable making those calls because they're not sales calls. The tellers then start naturally listening for customer needs. They then pass those needs along to others at the bank that can help the customer.

That is the reason we are growing. We are holding people accountable for meeting these types of expectations.

They don't get to make excuses because managers don't accept the excuses.

It's all about setting expectations for people, holding them accountable, and then not accepting excuses. That's the big difference with our managers over the past year.

RE:  How did you decide on your expectations?

PS: We conducted a roundtable discussion in April 2005.  Each manager had their own table with the same four positions represented.  For example each branch manager table had a teller, FSR, lender, etc. 

We then asked them, "What are your expectations? Close your eyes and imagine what your branch would look like if every person was doing what you expected. What is it that you want them to do?"

People had different visions. Some branch managers thought tellers should give two referrals in a week, while some thought they should give fifteen. We worked through the differences in opinion and voted. In the end, we came up with a list of expectations for each position. I played the role of facilitator, and they came up with their own employee expectations.

Together they created five concrete expectations for every position. Before this, the bank didn't know what functions each position was supposed to carry out.

I knew what I wanted them to do, and I could have dictated that to the branch managers, but it wouldn't have been as effective.   They would've said, "OK" and then passed the expectations along to their employees saying "Patti said this is what you have to do and this is when we are going to start doing it."  I didn't want them to do it that way.  I wanted them to think of what they wanted from their employees.

RE:  What roadblocks did you hit in implementation at the frontline level?

PS:  The biggest roadblock was that our tellers weren't comfortable with the products. They didn't want to call a customer and sell a product. But we didn't want them to do that; we wanted them to call and listen for needs.

So we came up with teller scripts. Our branch managers sat down with their tellers and reviewed the scripts. The sessions were interactive. Tellers watched while managers called using the script. We had to make our staff believe that customers do love it when they call and visit. Many of the tellers thought they would be a bother.

RE:  What was the time line for rolling out the company standards?

PS:  We had the "Kick-Butt Kick-Off" in late January and formed our customer service team in February. In March, we set our ground rules. Then we took every position and set expectations. By the end of April, we had implemented the bragging sheet. 

In June and July, our team did their first quarterly presentations, reporting on how they did. All they do at the quarterly meeting is report on their bragging sheets, and everyone else can tell whether they are executing or not.  This was where the NO EXCUSES policy came into play.

The excuses lessened with each quarter.  We did hear a few excuses in July, but our people recognized them. They were up there saying, "Oh my gosh, I just made an excuse." 

RE:  How are you tracking the culture change?

PS:  We stack rank everything. From new checking accounts, volume, loan growth, deposit growth, you name it.

The stuff that is going to make a difference is what we measure. We're measuring everything and anything in a branch to prove that if they stay in touch with our customers, the bank will grow.

Everyone can see exactly where they are. They can even see some of the best branches in the best markets need improvement. They can't make excuses. 

I am stack ranking a lot of stuff, but it's not just the ROA, ROE, and net interest margin like it used to be. It's also the fun stuff that actually shows the behaviors of our people and the results they are getting because of those behaviors. We are stack ranking our expectation, loan growth, deposit growth, annuity sales, mortgage-anything that we want to focus on that shows that the behaviors are being performed.

We never mention those branches that aren't meeting expectations. We never ask, "Hey you're down in the yellow, what's wrong?" It's all about the successes. We don't have to mention the ones that are on the bottom because they want to achieve the same success that other branches are getting.

Then, we have our customer service team-coming in from behind. They decide how we are going to celebrate if they meet the expectations. That team is developing the culture.

RE:  What adjustments have you had to make within your leadership team?

PS:  We've had some turnover within our leadership team during the past two years. I've taken two people off and added one. I am confident I have the right people on our team to move it forward.

I realized six months after starting the program that I couldn't do it all. I thought I could, but I couldn't. I needed help. The leadership team needed to be right there pushing the energy, pushing the culture, having the fun just like I was, or else I didn't need them.

If they were just going to be the head of administration-approving credit loans, I didn't need them. I needed them to lead with enthusiasm and energy-letting our people see it every day.  I told my leaders, "I can get anyone to approve loans. Here is what I expect…if you want it, it's yours. If you don't, get off, get out, or move over because I've got to have somebody to help me." So they've stepped up to the plate.

RE:  How does your leadership team get involved?

PS: We participate in everything. For every two customer service team members, there is one leadership team member.

When standards roll out, we have our whole leadership team engaged and in charge of making it fun. We have consistent measurements and expectations. People want to know what they have to do to be successful. We let them know so they can do it.

RE:  What kind of incentive program are you doing right now?

PS:  We do not have an incentive program. We had some incentives in place before we started your program, but they didn't work.

We will have incentives built into the customer service team's awards. We don't do anything any longer than a quarter. It may be cash or it may be a pullover fleece, but we don't do anything except on a quarterly basis.

There is nothing measured that isn't on the bragging sheet. The customer service team comes up with something fun to give them. No formal incentive plans.

RE:  What is your team up to now?

PS:  I have a new customer service team now and we are working on a new set of behaviors.

At the April 06 quarterly meeting, the customer service team was doing skits around the new behaviors. What each behavior means. What does that look like to a customer? What does it mean to have fun?

We are also revisiting our past standards. Currently, we are mystery shopping our phone standards.

We've got to take it to the next level. There is a strong foundation for how to behave in our company. Having the right people is key.

RE:  Congratulations, Patti! You were recently promoted from SVP to President and then to CEO. How do you spend your time now?

PS:  Since I was made CEO, I have had to carve off a little bit of that time spent among the troops to do some CEO work, but my main focus is still on the behaviors.

Before I became CEO, all I did for the first nine months of the Sales Culture Program was communicate, communicate, communicate. Visit, visit, visit. Play the music. Pump the vision.  A vision they created!  They expect that now.

We have quarterly Town Meetings to let everyone know how we are doing.  If employees come to a meeting and the music isn't playing and the vision isn't clearly displayed, they are saying, "I thought we were having a meeting. What's going on?"

We set the expectation of focusing on the customers and having fun doing it a year ago, and it continues today.

RE:  Thank you Patti. You are an inspiration and you have proven a culture CAN change overnight.

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