“After finding no qualified candidates for the position of principal, the school board is extremely pleased to announce the appointment of David Steele to the post.”
-Philip Streifer, Superintendent of Schools, Barrington, Rhode Island
Picture this. At the regular senior management meeting, the HR Director has been given the floor. Here are three different scenarios you might hear:
#1:
“We sent out the annual review forms, and several of you are late in getting them back. Please finish all reviews by Friday.”
“We have changed the Friday dress code to be a little more specific about what is allowed, since we had several people complain that some of the outfits were inappropriate.”
“United Way time again. Volunteers?”
“The annual bonus budget is 5% of salaries. You each will get that amount. Please try and keep individual bonuses between 3% and 9%.”
“What does everybody think about having the picnic this year?”
#2:
“Nothing new from me. Is there more coffee?”
#3:
“After the XBank merger was announced this week, we made contact with several of their key employees that worked in areas you have expressed need in. Jack, there are two loan analysts that sound like they might fit your open positions well. They also have a Web programmer that looks like a perfect match for the position in IT. We’re going to move fast to hook them up with you.”
“I was talking to two peers last week, and they have had real success cutting down on turnover in branch part-time employees. This is a priority for me, because our turnover is higher than peers and I know how much this issue has been plaguing the retail group. I’ll take the lead on seeing if their ideas can help us.”
“There are several areas where our productivity is not matching peers, and the bottom-line payoff if we get to peer levels is half a million dollars. I know this may be an uncomfortable topic, but I’d like to discuss what organizational steps we can take to get to peer averages.”
An open question to CEOs – which of these would you like to hear in your shop? (Right. Me, too).
The three scenarios I discussed above aren’t too far from ones we have witnessed at Cornerstone when working with our clients. The first two can generally be uttered by those HR Directors that are solid, VP-level, middle managers who play a largely administrative role in the organization – post positions, interview, hire, fire, and administer benefits. While they are no doubt efficient at what they do, they are largely irrelevant in the minds of most bank management. Sadly, I should add that the corporate title makes no difference – there are also many SVP-level HR managers that are equally irrelevant at their banks.
The third scenario is one that can typically occur when the HR Director is an EVP-level position, actively involved with other senior managers, and viewed as a valuable resource to be used wherever and whenever possible. This individual is on a par with the CFO, COO and CLO.
We have bank clients that are doing well with both types of HR positions. In fact, either can work over time. The interesting think about HR is that, unlike almost every other position in the bank (except Marketing), the individual in the job, their performance, and their contribution will determine what level the HR Director will occupy. There is no question that the CFO is a senior manager. Ditto for the head of lending. HR’s spot on the senior management bench, by comparison, is earned, as is whatever influence it will have in the organization.
So, how does the “Gonzo” HR all-star ensure his or her rightful place in the inner sanctum of senior bank management teams? Here are some characteristics we have found that are indicative of successful HR managers in our client base, which we’ll summarize as “Gonzo HR managers”:
1. They understand the business of banking. While there’s no argument that HR is an area that needs very specialized skills and knowledge, Gonzo HR managers can talk about banking with bankers. They understand why commercial lending is complex. They know why OFAC is necessary. They don’t need a primer on credit scoring. In the future, the ability of HR to understand and talk banking will be crucial. And the good news is that the lines of business will, for the most part, be more than happy to educate them.
2. They get out of the office and into the field. It is amazing to me how many HR people I encounter that have never gone to a branch to watch tellers work, or sat in the call center to listen to calls, or sat with a lender to see how underwriting works. Visibility makes for credibility, and going to the effort to understand the pressures facing employees in person is worth any number of memos and team-building events.
3. They birddog key positions and key potential employees. While every HR group knows what positions are open and has some kind of prospect list, line managers usually have one or two hot-button jobs. For some time, it was good network people. Currently, it’s credit analysts. Next year, who knows? HR managers with clout know what these jobs are, know the names of employees that can be enticed from competitors, and are proactive in filling them working directly with managers.
4. They aggressively confront underperformance and job misalignment. There is a new type of employee progression that needs to be addressed. Traditionally, progression dealt with the long-term upward path an employee took through the company. Today, it is as much a discussion of vertical movement – e.g. the employee who once was suited for a job but who won’t be in the future. The most obvious example of this at present is an employee who is expected to grow into a sales position but everybody knows won’t. In the future, strong HR managers will have talks that start with, “We have both known for some time that Hal is a good employee who won’t grow into his new job. Here’s my plan to get you what you need and make him successful.” (Note to all readers named Hal – I didn’t mean you.)
5. They are maniacs about getting training right. In every, and I mean every engagement we perform, people say they need more and/or better training. To be fair, this may sometimes be excuse making, but there is a general agreement in the industry that a lot of training dollars have not been spent wisely.
Most HR managers will not control all training budgets or be responsible for all training in the future. That horse has left the barn. However, Gonzo HR managers know how much is being spent in the company on training, how that compares to peers in both total amount and mix, and are in the thick of the conversation with managers and training attendees about how effective the training is. They will not track and report activities (“We trained each employee for 20 hours.”) without hard analysis of how effectiveness was measured.
6. They represent management to employees and employees to management with equal vigor and integrity. This is a fine line to walk. It’s easy for employees to dismiss HR as being management apologists (“those are the rules”). It is almost as easy for management to dismiss them as being employee babysitters. Good HR managers are likely to fall on either side of a particular argument based on the situation.
The bottom line is this: HR managers can earn the seat at senior management and provide much-needed value. On the other hand, they can run job ads and plan the Christmas party. Banks seriously need the former.
-tr
Post-script:
And, good readers, with your indulgence, I want to say a farewell. In the early part of my banking career when I was young, brash, and green, I had the incredible luck of meeting several people who acted as coaches, mentors, and advocates to me. One stood above the rest. Bob Becker taught me more in the time I knew him than anybody I have known in my career. Sure, he taught me a lot about banking. But he also taught me how ethics and honesty have to permeate every detail of a job. And the importance of treating people with dignity every minute of every day. And how bad news needs to be given quickly and honestly, while good news can wait. And a lot more I don’t have time to detail.
The greatest gift he gave me was his time. I remember that without any prior announcement, he would take me out of my daily job and have me drive around with him for a day. We wouldn’t really have a purpose – I realized later that he just wanted me to see how he did things and absorb them. And he would do all of this even when he wasn’t my boss, which was most of the time I knew him. When’s the last time that happened in your bank? I also remember that the only thing that was more lavish than his compliments was the vehemence of his criticism when he thought I wasn’t performing to my abilities.
He was the best boss, and the best salesman, and the best leader I ever knew (and forget pedigrees – he was a high school graduate). He died last month, and I wish I had thanked him more when I had the chance. I hope everybody has the same experience of learning from a Bob Becker, or being a Bob Becker for somebody. Nothing ever helped my career more.