Community Bank CEOs: Reasons to hire right for a successful bank sale

Your job as CEO is to make yourself replaceable.

You do that by hiring the right people, who can keep the bank running well, without you.

Don’t get me wrong, you have unique and specialized talents like being a visionary, being adaptable, being a motivator, and being a receptive listener.

You have guided the bank toward success through skilled leadership and trusted decision-making.

No matter how far you look, you won’t find a leader who can do exactly what you do.

Prior to beginning the process of starting the bank, I was fortunate to have learned through my credit training and capital markets/corporate finance experience that if you are going to sell a business, at some point, a potential acquirer will want to see that you have a management team that can run the company in your absence.

It’s critical to the overall value.

Your purpose as a leader does not lie in the tasks you spend your time on.

Running a bank is full of strategic initiatives that can create long task lists that include everything from administrative duties to business development, and as CEO with these tasks on your plate, it’s time to take a closer look at where you spend your time.

Your job as CEO is not to complete a to-do list – it’s to make yourself replaceable.

Work on the business, not in the business.

Systems, processes, and leadership are the keys to long-term value.

Your people are the keys to systems, processes, and leadership.

The CEO’s primary responsibility is “Keeper of the Culture.”

It isn’t because the CEO is special.

It is because the CEOs values, attitudes, and beliefs are going to be the ultimate decision-making criteria when an opportunity, issue, problem, or complaint makes it to the CEO.

So, to have a strong culture and for your people to have long-term career satisfaction there needs to be shared values, attitudes, and beliefs.

The strong culture creates consistency.

Consistency is what customers look for.

Not randomness.

Not chaos.

Consistency is why McDonald’s has sold billions of hamburgers despite never having won a cooking award. You know how a cheeseburger will taste in Washington DC, Topeka, Tucson, New Orleans, Seattle, Pittsburgh, Boise, Boston, or Fargo.

Consistency as to:

• How accounts get opened
• How customers get on-boarded
• How customers are welcomed by name
• How customers are listened to
• How attentive your employees are to you customers
• How quickly the phone gets answered
• How accountable your people are to get your customer’s issues resolved
• How your employees are dressed

It is consistency in everything.

Is the grass green?

Is the landscaping manicured?

Is there trash blowing around the parking lot?

Is the flag tattered?

Every detail communicates that consistency.

It all matters.

Accompanying that consistency in culture is the consistency in systems, processes, and leadership.

When you have a culture of consistency, you’re going to see a rising benefit in your bank.

Customers telling everybody about your bank, your employees are happy in their careers, looking forward to what they can do and become (See the common theme here? Employees look to the future just like buyers do).

Getting to this point is rarified air, but it should be the goal.

Achievement of this goal is extremely difficult.

If the CEO doesn’t diligently play the role of “Keeper of the Culture,” it can be gone overnight.

That’s the role the CEO needs to be playing.

In addition, the CEO must look down the road three to five years ahead to see where the bank can build the most value.

This is working ON the business, not IN the business.

Are you able to say you have everything above down pat?

If so, that’s awesome, congratulations!

Are the people in your employment who have helped you get to this point, protected from competitors?

If there is still some work to do, you can start by doing the following:

• Audit yourself – where are you spending your time?
• Audit your team – do you have the key roles filled by people who can operate the bank successfully in your (prolonged) absence?
• Audit your consistency – do you have consistent systems, processes, and leadership?

The value for your bank will come from systems, processes, procedures, and the people in place who can continue to drive earnings (without you).

Steady, predictable, and consistent earnings get a potential buyer’s attention and holds their interest.

Their future depends on those earnings projected out over future years.

If you don’t have the people in place to be able to get you there, if you haven’t been clear about your values, attitudes, and beliefs, you likely are not as consistent as you could be.

But you don’t have the time and energy to put into the plans to change the:

• Culture
• Finding, recruiting, hiring, developing, and retaining key employees

You can’t afford not to.

Find one employee.

Then have that one employee help you find another.

Then have those two employees help you find a third.

Set the bar high and don’t compromise.

But it is so exhausting, one step forward and two steps back it always seems.

It is. I can’t sugarcoat it.

But it’s worth it.

It is critical to your business today, tomorrow, and if you ever decide to sell – your shareholders will realize the value.

The buyers will realize the value.

Your employees will have a bigger platform to showcase their talents and extend their career growth.

It’s also way more than sale value realized or the bigger platform for your team.

It’s the satisfaction you get as the team and the individual team members develop.

Each person will benefit, over and over, throughout their career from the experience they gained.

A transformation will take place for every one of them for the time spent in your bank.

They will be more competent and more capable than the day they started with the bank.

They will have built more value as a result, and I am a believer that capital follows value.

Their development will also add to your career legacy.

There are zero hacks or tricks in this newsletter. Just proven tactics that help you choose the right path for your bank.

Your path will:

• Inform your strategic plan.
• Guide your annual business plan and budget.
• Clarify priorities.
• Define your message so it can be communicated with confidence.

This is how savvy bankers navigate.

They build smart and valuable banks and choose the best time to sell - serving the needs of the shareholders and the board.

I hope you found this short lesson helpful.

What are your thoughts?

I’ll see you next week.