3 really valuable ways bank CEOs have for reaching a successful bank sale (Part 2)

In Part 1, we talked about the fact that you only sell your bank once. And we asked the question “How can you possibly prepare for that?”

We also pointed out that selling a bank isn’t like selling a house.

You can't just put a fresh coat of paint on things, get the yard looking good, replace a few appliances, stage it, and get it sold.

Steady and predictable earnings consistency is the primary driver of a bank’s value.

The 3 drivers to steady and predictable earnings consistency are:

• People
• Procedures and Policy
• Leadership

In Part 1 we focused on people.

We needed to change our mindset regarding hiring.

We needed to move hiring to the strategic asset status it was.

We needed to move from a “surplus” mindset to a “scarcity” mindset.

A “surplus” mindset is the norm – “There are plenty of people out there, we’ll just find one.”

A “scarcity” mindset is “We are looking for people who are not looking for a new job.”

A surplus candidate’s mindset is “Here is what I have (skills, experience, academics, competencies), what do I get (title, office, money, perks, authority)?”

A scarcity candidate’s mindset is “What am I going to do (what specific work, what kind of impact can I have on the organization to be successful, who will I be learning from, who is the team I will be working with), and what can I become (what new skills will I have that I will be able to put to use to have more of an impact over the long-term, what will this role do for my long-term career value)?”

In Part 2, we will be focusing on systems and processes and leadership.

Procedures need to be consistent to be a great company.

Again, McDonald’s is a good example of consistency. They have never won a cooking award but have sold billions of hamburgers. You know when you get a McDonald’s hamburger, regardless of where you are, what that hamburger is going to taste like.

Consistency is what gets your customers telling others about your bank.

When your customers tell somebody about their experience, they risk their reputation.

They want a high degree of certainty that the people they tell about your bank will have the same great experience.

To get, and maintain, that consistency an organization must communicate effectively.

Every detail communicates.

How your people communicate demonstrates, more than any other factor, their competency and value as a thinker, decision-maker, strategist, researcher, motivator, teacher, coach, role model, and respectful team player.

The thoughtfulness of each person’s communication demonstrates to others in the organization that they truly are taking a leadership role.

And the best way to demonstrate a leadership role is through the way one expresses themself.

To enjoy freedom and independence in the workplace – always trusted to perform to the best of your ability without constant scrutiny and supervision – one needs to learn how to communicate their thoughts, suggestions, concerns, and observations effectively.

The way each person expresses themselves in written reports, in meetings, or on the phone, is composing a narrative of their skills.

Policy is simple.

It is meritocracy.

In a meritocratic environment:

People get fair treatment without regard to personal relationships, politics, nepotism, or whether they do or don’t hold an investment in the company.

How well each employee reflects the foundations of the company propels them and keeps them in a position of leadership.

Leadership is reflected in everything each person does.

That creates the consistency the organization is striving for.

Consistency is rare.

It is extremely difficult to achieve.

Every detail communicates.

Action plan:

• Audit your bank’s consistency.
  • As an example, do you ever think “I will send (my aunt, my friend, my industry colleague) to this (specific) person.” If you do, ask yourself why.
• Audit how your bank communicates.

We had weekly reports that each person submitted.

Weekly reports were not a form they filled out. In fact, the form was whatever the person felt should be included in the report. Forms lead to doing the minimum and missing the purpose of the communication.

Well-crafted written reports were the primary tool we used to maximize our effectiveness as a company, and the reports were the best tool each employee had to help them take their careers to new levels.

It was through those reports that colleagues, management, and the board (those judging) had clear evidence of that person’s leadership abilities.

The content of their report demonstrated mastery of their area of influence. They would then experience less scrutiny, less supervision, and less frequency and volume of their reporting because they became such effective communicators.

They created value for themselves that nobody could ever take away from them.

As the influence and significance of their reports increased, so did their success, respect, flexibility, and freedom.

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.