When the markets are in tumult as they are now, when senior executives are consumed by the credit crisis, managing angry shareholders and explaining themselves to indignant politicians and regulators, it can be easy to overlook the morale among rank-and-file bank employees. Even with all the market brouhaha there's a job to do every day, and the employees that remain want to feel like they're doing something worthwhile. They want to believe they're contributing to the organization, and the organization appreciates their efforts.
Wachovia's Cece Sutton is one who has not forgotten. Indeed, she has made it one of her top priorities to meet regularly in person or video or communicate through email with the 33,000 people that work within her retail and small business division. "The key is keeping them energized and excited and feeling good about what they're doing. Because they have done a great job," Sutton says.
Sutton's domain accounts for a third of the bank's total earnings. And results indicate she has kept her team energized. Sales of deposit products grew 38 percent through the first half of 2008, with particular strength in savings (up 21 percent), CD products (102 percent), and commercial checking (13 percent). Investment sales also grew strongly, up 26 percent, compared to the first half of 2007.
Pep talks can only go so far, however. Companies need to follow words with action. "It became real clear [as the credit crisis unfolded] that we needed to have our priorities articulated and understood. We needed to narrow our focus, excite the team and back it up." By back it up, Sutton means changing the incentive structure to reflect the new economic realities and priorities at the bank.
Compensation at Wachovia is 70 percent fixed and 30 percent variable. In April, Sutton and senior management decided with credit standards increasing and loan volume necessary lower, the incentive structure needed to be adjusted to diminish loan generation in the compensation equation. At the same time, the bank put even more emphasis on deposit growth, cross-selling and service. Critically, this new incentive structure was conceived and rolled out in just two months. Pretty nimble for the nation's third largest retail bank. (c) 2008 U.S. Banker and SourceMedia, Inc. All Rights Reserved. http://www.americanbanker.com/usb.html/ http://www.sourcemedia.com/