Tuesday, August 2, 2011

Risking your institution's reputation in ways you may not have considered...

Being in the job market exposes one to lots of interesting accountability styles. I met a couple of weeks ago with a bank that, on its website and when talking with its employees, points proudly to its long tradition of honoring commitments to its employees, clients, shareholders and community - values any of us would welcome in our work life.  The downside to those promises and beliefs is that when one of the links in the chain fails, the goodwill and aura that were so carefully crafted was built not on rock, but on sand.  The representative of that bank very clearly set next steps that were promised by his institution, but which were not completed.   Now, despite repeated phone calls (office and cell) by me, radio silence has ensued.  The bank's reputation has, for me, swirled down the porcelain fixture.  In addition to my now-extinguished interest in considering the bank as an employer, it is highly unlikely that I will ever refer anyone else their way.  I doubt that the bank's marketing department knows of this erosion to their brand.

On a positive front, I recently had interactions with an executive recruiting firm that went above and beyond the call of duty.  Their representative made a series of follow-up promises which were honored in a timely manner in every measure. While this series of interactions didn't result in revenue for this professional's firm, I will never forget his servant-leader type approach and I will someday soon engage his firm to do work for me.  I know I can trust him with my reputation and that of my institution.  I will readily refer him.

How are you, your team, and your outside services firms representing you and your brand?

Tuesday, January 11, 2011

7 Signs That Your Commercial Banking Relationship May Not Be All That You Wish…

I'm amazed at some of the interesting stories I've heard over the years from entrepreneurs about their banking relationship. Your bank and its bankers should be key professional advisors and advocates for your success. Please take a moment to consider these scenarios – hopefully none will apply to you.


  1. Who calls whom? In today's challenging business environment your banker must be your partner, and he/she should be very proactive in managing the bank's relationship with your business. If you haven't heard from your banker within the past 90 days, it may suggest that you don't have that two-way relationship that the very best bankers deliver to all of their clients, not just their biggest.
  2. When you call your banker, do you get a return call within a reasonable timeframe, or must you follow-up to make the connection? Many banks have changed the profile of their "ideal" client types in recent months. Sometimes you don't hear from your banker because he/she is reluctant to share the bad news that you don't fit their profile any longer.
  3. You have a maturity on a credit facility coming up in the next 90 days. Has your banker sat down with you to review your needs and the changes you and the bank have experienced over the past year? If not, how can he/she possibly develop the "right" solution for your business? Credit renewals (and new loans) demand advocacy and action by your banker, well ahead of maturity dates or other triggers. What seemed automatic in the past is now likely to require more scrutiny by your bank.
  4. Your credit facility is only renewed for a short period (30 or 90 days quite commonly) instead of for the year (or longer) you've usually seen. This can be a result of several issues, none of which are positive to your business. Poor planning by your banker, inadequate staffing at the bank, lack of understanding of your business and its needs, lack of confidence in you or your business, lack of full financial information on the business; I could go on and on. If it is you that has caused the problem, look in the mirror when assessing blame. If not, your relationship is probably not well.
  5. You really "know" only two people at your bank – your banker and his/her assistant. Your banker could: win the lottery and decide to quit work; take a new opportunity outside banking or current geographical area; encouraged to explore other market opportunities, or any number of other things. If your point of contact is just your banker (and his/her assistant), your relationship is unnecessarily imperiled. You must get to know the credit and underwriting teams and the local executive at the minimum. You need multiple advocates supporting you at the bank.
  6. Your longtime contact at the bank introduces you to a new account officer, and their title has the words special assets, SAG, asset management, resolution or other cryptic yet ominous sounding phrase, your relationship may be suspect. Let me assure you that not every client that has to deal with a bank's "special assets" group is a doomed company, and banks sometimes erroneously paint a client with this tag, but it is imperative that you recognize that this change in account officer is NOT minor, and that you need to "think differently" about your bank relationship. Special assets bankers often measure success by moving clients out of the bank.
  7. You have a long-term real estate loan that has a "bullet" maturity coming up within the next two years. While your bank may have renewed this very same loan multiple times in the past, this is not the time to assume that the same will hold true. The banking industry has undergone considerable change in the past two years, and the industry's appetite, particularly for investor real estate, has changed the most. If yours is a multi-tenant shopping center or low-rise office property, or a hotel, or other property that relies on rental from tenants, start talking to your bank right now about what's in store at renewal time.

If you find yourself burdened by one (or more) of the above issues, take action NOW. Even in today's tough business environment, there are a few banks that are looking to add great new clients, and will be very proactive to win a new relationship. Your CPA, lawyer or insurance agent will often know who is in the market and who is out. Also, just because your bank has delegated your relationship to their special assets group, I've seen many situations where another bank will see that same company as a great new relationship.

Please share your relationship story with me – I am always interested in learning.

I hope that your business already enjoys a great banking relationship…

Bruce Bradford

© Criterium Solutions LLC, 2011

Wednesday, September 1, 2010

Same Song, Second Verse?

While the most significant recession since the 1930's is yet to be totally quenched, I wonder if we may be seeing the banking industry sowing the seeds for the next downturn right now.

My premise focuses on the investor-owned commercial real estate marketplace. Community banks and regional banks have, for years, relied on the seemingly insatiable growth in that marketplace as the engine for the banking industry's growth. Strip shopping centers, multi-tenant office buildings, hotels and other properties were popping up everywhere, and banks were quite willing to facilitate the development with interim construction loans that later converted to limited maturity permanent loans. As long as the economy and secondary markets (both real estate and financial) were functioning rationally, all was well. However, as we all now know, things changed. The economy hit numerous roadblocks, construction demand plummeted, the financial markets collapsed, and banks found that the commercial real estate loans once considered rock-solid were instead faltering.

With that backdrop, regulators and bank boards responded as we would all expect - they restricted additional loans in the sector, regulators beefed up historical "guidance" to near the level of law, and suddenly the engine of growth for that sector of the industry was disabled.

As the economy moves from sputtering to modest growth, the expectation from banking industry shareholders is for a return to growth by community and regional banks. With investor owned commercial real estate no longer a viable option, those banks will be intensely focused on other avenues of growth. The small and mid-sized business community will be the target of many of those banks.

Bank management teams will assemble their bankers, describe the new post-crash banking paradigm, and implore each of them to immediately become business banking experts, go into the marketplace and sell loans and other services to the business banking marketplace.

If there were a reasonable balance between the supply of banking capital (and the willingness to deploy that capital) and demand from business, this scenario might well play out to the satisfaction of all.

However, demand for banking services by business remains very sluggish, while banks have unprecedented levels of liquidity on their balance sheets. Couple those circumstances with the deployment of large numbers of relatively unseasoned commercial bankers (who were great commercial real estate bankers, but who will be years in fully developing their commercial skills), plus the demands of bank management, boards and shareholders to resume growth, and the recipe for disaster is in-hand.

I expect the imbalance between the growth needs of the banking industry and sluggish demand for bank services to lead, over time, to downward pressure on loan structures, pricing, guaranties, covenants and the like to the extent that, given enough time, another crisis will have erupted.

My guess as to how long this will take? I'd estimate 2015 for the next crisis. I hope my thesis is proved wrong...

Tuesday, August 24, 2010

It Is All About the Relationship...

A recent article by Vincent Ryan of CFO.com and CFO Magazine notes the high level of dissatisfaction amongst small to medium business owners with their banking relationship. While I don't doubt the findings, I think that some of that article misunderstands or mischaracterizes the reality of today's banking marketplace.

This all comes back to how a business owner and its banker view their relationship: if the business sees the bank as a commodity (likely true in the cases cited in the article when so many expect to issue an RFP for banking services in the near future) as opposed to a value-added relationship, a down economy is almost certain to result in a disconnect between the needs of each party.

Conversely, when the two parties engage in their relationship in a way that works to the benefit of both -- I describe it as a single umbrella under which both parties seek refuge from the economic storms - both getting damp or wet on the periphery, but both staying largely dry -- the mutual needs of each can oftentimes be met as the challenges for both increase.

Changing course a bit, I would strongly disagree with Reuben Daniels' comment cited in the article that banks generally view lending as unprofitable - I can assure you that my 30 years in the business, at a number of institutions both large and small, have been focused on lending (along with the logical other revenue sources) to small and mid-sized businesses because it can be a very profitable area for a bank.

With today's reality of near zero return on cash and near cash (and unprecedentedly high levels of liquidity on bank balance sheets), banks are clamoring for the opportunity to make well-structured loans to credit-worthy companies. It is also important to note here that banks aren't in the business of loaning money to unproven ventures - that's generally to be funded by equity of one type or another.

Finally, regulatory pressures tend to be highest in a down economy, so I won't argue that it is easy for either borrowers or bankers.

All said, I would encourage business owners to seek and develop very deep relationships with their banker in the good times, so that when a change in situations comes along, they can lean on that relationship and take comfort that their banker "has their back" during the tough times.

Monday, August 23, 2010

Suddenly seeking employment - The Announcement

Good afternoon:

As John Lennon once sang, life is what happens while you are busy making other plans. I learned that lesson (again) just last week!

With that preamble, what you've heard on the street is true – I was relieved (I looked up the word deposed and it applies here) of my duties at (my previous employer) on Wednesday August 4. I will miss the great employees, clients and other relationships there, and I wish the bank much success (I'm still a shareholder) in every regard.

My new motto is "Lemons into Lemonade and Lemon Meringue Pie".

My agreement with (my previous employer) has always included a one-year non-compete (DFW, Houston) in commercial banking, private client services, trust, 401(k) and investments, so you won't see me in any of those roles for a good while.

I am actively considering where this fork in the road takes me, and as I deliberate you should expect me to find more time for cycling (during which times I will be pondering my options), learning Spanish (Deanna and I will be living aboard a small motor yacht in our retirement years, and I will need to know how order a beer or get guidance in finding great anchorages when we are in the Caribbean), and doing some volunteer work at church and with some of my favorite non-profits in DFW.

Undoubtedly my immediate future will see me actively nurturing my relationships (that's you!) full time for at least three days weekly so that when I do figure out what's next you'll actually remember who I am when I call you! That said, I want to continue to be a "giver" in every fashion possible, so I expect you to look me up any time I can be a resource on any front.

In the meantime, I am keenly interested in your ideas, introductions and any other support in the upcoming weeks. Please update my contact information as shown on this email, and let me know in what ways I can be a resource to you.

Finally – I am working on getting my new database up-to-date, so it would really help me if you would send me an email with all of your contact information on it, just so I have everything I need to maintain our relationship together.



Friday, August 20, 2010

Suddenly seeking employment - Part One

Many who follow this blog know that I was recently released from the services of my previous employer. I was, admittedly, caught off guard by this unexpected change in career status.

For reasons both of self catharsis and as a service to others who may find themselves in similar circumstances, I have decided to use this forum as an outlet for sharing some of my experiences in these new waters...

To begin, I must offer my sincere gratitude to literally dozens of friends, associates and supporters for their outreach over the past two weeks or so, having come to know of my circumstances by way of my email (see Suddenly seeking employment - The Announcement), the Dallas Business Journal or word of mouth. I am blessed by this amazing and generous outpouring of support, ideas and counsel, and my confidence is buoyed as a result. Some of these relationships are decades old, but even those that are measured in weeks rather than years have had material impact on me. To all I say thanks!

This week, in addition to many meetings with those noted above (I "worked" from 7am until 4pm every day this week and last), I added a visit to the Southlake Focus Group (www.southlakefocusgroup.com) to my calendar - having been pointed that way by a longtime friend. This group of job-seekers and dozens of very caring experts (I'd guess 400 were in attendance) is hosted at White's Chapel United Methodist Church in Southlake, and has been around since 2002 or so. Some 5,000 alumni can testify to the efficacy of the model, and the excitement in the room was palatable.

As a first-timer, I (along with about 50 other newcomers) sat in on the first portion of the meeting as general announcements were made, book suggestions shared, job "landings" announced by about ten happy members (who, as a result of landing, were charged with bringing either donuts or donut holes - depending on whether their new roles were permanent or contract - to the gathered masses), and then we were whisked off to a larger classroom for our newcomer's indoctrination.

After filling out a very basic form and getting a nicely detailed overview of the processes this forum employs, we each took our turn at sharing our ten-second commercial. While for some it appeared to be slightly intimidating to step out of one's comfort zone into the realm of public speaking, all did well and were effective in sharing that very small snippet of their hopes for their future and the employment they seek.

Next steps will include a brief email survey, attendance at a future Thursday morning meeting, and, finally, membership in the all-important Yahoo! Group to which dozens of otherwise unpublished job opportunities are posted. Attendance at special interest groups will also be on my agenda.

I was very impressed by the whole event - the leadership team is obviously passionate, organized and engaged, those seeking employment were polished and eager to learn, the facility is wonderful (though its hard for me to go to "church" and not sing at least a couple of hymns!), and the overall attitude is one of getting it done and of lifting everyone up. I will be back - both for me, and for the possibility that I may be able to help connect someone in a way that will be helpful to them.

Stay tuned...

Friday, February 12, 2010

Leading in the New Normal - Guest Blog: Greg Bustin

Good afternoon - here's a first for this blog - a guest piece from a solid businessman whose opinion I value. I hope you find his views to be stimulating. With that, please allow me to introduce Greg Bustin, CEO of Bustin & Co. in Dallas. I've known Greg for eight or so years and have seen him bring great counsel, across a wide variety of situations, to many. Enjoy!

Leading in The New Normal
By Greg Bustin

Last month, I spoke to six groups of CEOs and their key executives in Atlanta, Lexington (Kentucky), Grand Rapids (Michigan) and Richmond (Virginia). These leaders are members of Vistage International, the world’s largest CEO membership organization (www.vistage.com).

We were reminded that in difficult times the role of a leader is more important than ever.

A leader may be a manager, but a manager is not always a leader.

A manager directs and monitors people and the work they do. A leader sets the vision and creates opportunities for people to contribute to the achievement of that vision.

Why is leadership more important than ever? Because while the future may be looking brighter, it’s still uncertain. The workplace may be more active but people are still anxious. Normal routines have been turned upside down.

What if this is the New Normal?

The Leader’s Role

The best leaders define reality and inspire hope.

Life is not a multiple choice test. And leadership is not always black and white.

So while leadership does not come from a checklist, the following guidelines – reflecting insights from leaders I’ve visited with across North America – are timely reminders of things you can do to sustain a healthy, productive culture in your organization or department…which, after all, is the only thing within your sphere of influence.

  1. Remember that you’re always in the spotlight. Be mindful of the verbal and non-verbal signals you send. Be transparent -- the truth in tough times is more important than ever.
  2. Live your values. Make your values visible. Your culture is the invisible hand of your values made visible in behavior. Does your culture match your values?
  3. Work from a written a plan. If you don’t have a plan, develop one. If you need to recalibrate your plan, do it. Be specific about defining success and be specific about every person’s role in helping achieve it.
  4. Leave your foxhole. Walk around to stay in touch with colleagues by asking questions and offering encouragement. Visit with customers and suppliers. Not everything that’s important is found in a report.
  5. Monitor and measure performance. How do we stack up against the competition? Are we satisfying our customers? Are there opportunities to upgrade our talent? You can’t improve if you don’t measure. Where are we coming up short? Fix it. Where are we winning? Replicate it.
  6. Shift accountability. Growth is stymied by leaders’ inability to delegate. Invest others with the personal responsibility to deliver results. Recognize and reward success. Address under-performance.
  7. Make changes fast. In the last 30 days, I’ve asked more than 150 different leaders to name their biggest mistake of 2009. Their answer? Failing to act more quickly on a decision.
  8. Balance the present and the future. Is your vision inspiring? Are your growth goals realistic? You can have your eyes on the Super Bowl, but you can only get there one game at a time.
  9. Celebrate wins. In tough times, it’s particularly important to recognize organizational and individual successes. Doing so acknowledges progress and encourages those achieving high levels of performance to continue pushing forward.
  10. Acknowledge that we don’t control it all. Let go of baggage that may be holding you back or getting you down. Lighten up (see #1 above). We don’t control it all. We do, however, control our responses.
  11. Keep things in context. No matter how bad you may have it, there are hundreds of people that would gladly trade their problems for yours. When possible, look for opportunities to do something for others outside your company. Doing so will be a blessing to you as well as to those you help.
  12. Don’t go it alone. It’s lonely at the top. Develop a group of trusted advisors whose only agenda is your success. They will question your answers, offer encouragement and provide accountability so that you can continue to lead those that look to you for these same things.

Are you managing? It’s time for leadership.

February 2010
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