Case Study 2: La Cumbre Savings Bank

A bank found it couldn’t launch and support a new product without creating a more harmonious work environment for its employees first.

The Situation:

A small, relatively new savings bank in Santa Barbara, CA experienced two dramatic changes: it expanded its product line from certificates of deposit (CDs) to free checking accounts; and the nationwide savings & loan crisis created enormous administrative burdens to comply with new regulations. It was also the only local bank to offer free checking and gifts for opening new accounts. Its five branches and 50-plus employees served Santa Barbara and surrounding communities in a 50-mile radius.

The Problem:

Service quality sank. The bank’s president got calls with customer complaints. Board members called with stories of deteriorating service. The best employees began leaving. Employee morale was low. The president spent much of his time mediating employee conflicts.

The Reason:

No one at the bank knew each other. Except for the annual Christmas party, they never met as a group. A “Berlin Wall” of mutual distrust kept retail banking/branch administration and accounting/personnel from communicating with each other. Tellers who once spent time chatting with customers about CDs now had to sort checks and retrieve prizes for new checking customers. The paperwork required to meet regulatory requirements overwhelmed employees.

The Process:

The bank wanted to introduce a new product that would meet the needs of target customers in its branch locations. It hired Susan Bellows to identify and launch this product. But when the Sole Proprietor Account, a multiproduct package account, was ready to be launched, Bellows spoke with branch employees about the idea. They pleaded with her not to do it. Each new customer would have had a personal banker, and they were already inundated with paperwork.

To address existing service problems and before any new product could be launched, the bank’s working environment had to change. Management needed to work as a team. The branches had to work in harmony and focus on doing better than their competitors.

Bellows arranged for a Saturday morning meeting of all employees and asked them to make “treasure maps” illustrating what they wanted in their lives. The president and everyone else worked on the floor with glue sticks, scissors and magazine to create their personal maps. Sharing their maps with other employees, they also explained what one thing would make their lives easier at the bank. Some of the answers included: increasing direct deposit accounts among elderly customers, and changing procedures for end-of-day balancing to get home sooner.

Another Saturday morning involved team-building exercises with employees who’d never worked together. Department heads attended smaller-scale skill-building meetings to set goals and develop leadership skills. Managers learned that employees didn’t want raises or promotions, just signs of caring: praise, recognition, opportunities for time off, and coupons for car washes, movies or meals out with other employees.

The Resolution:

Bellows worked with the bank for a year to keep the team spirit alive and functioning in day-to-day bank activities. A newsletter created initially for customers became the employee newsletter as well. For the first time, board members, employees and customers all understood what the bank offered. Employees also worked together to establish criteria for an Employee of the Month program. An important factor was how helpful someone had been to a co-worker. And the bank successfully launched new products in collaboration with local business groups.

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