Upon taking the helm at Old National Bancorp four months ago, Robert G. Jones set out on a listening tour of the company’s nine markets.
What the chief executive learned from talking with employees was that the $9 billion-asset Indiana company was top-heavy with management and that loan officers and relationship managers had little flexibility in dealing with customers.
Last week he took action. He shook up top management to eliminate layers and gave more responsibility to employees in the field.
“It became very clear to me that we had become too bureaucratic and it was too hard to get a decision for clients,” he said. “Associates out in the field said, ‘It’s too hard to get something done around here.’ ”
Old National also scuttled plans to open loan production offices, which Mr. Jones said led merely to transactions, not relationships.
These are the latest in a series of moves intended to make the Evansville company more efficient. In 2000, then-CEO James A. Risinger started an efficiency drive that included consolidating 21 charters.
In 2003, Old National hired EHS Partners LLC of Chicago for efficiency help, but Mr. Risinger resigned in February 2004 after the hoped-for earnings improvements were not realized.
In June the company announced 300 layoffs and took a $24 million restructuring charge.
Mr. Jones said the latest changes would help the company serve customers better. Regional presidents have been given authority to make decisions on pricing for loans and services, within certain limits. And by eliminating some managers Mr. Jones has more direct control over Old National’s various business units.
Personnel moves he announced last week included naming the holding company’s chief operating officer, Michael R. Hinton, chairman and CEO of Old National Bank. He eliminated the position of executive vice president of banking, which was held by Jerome J. Gassen.
Mr. Hinton will also oversee Old National’s insurance operations after the retirement of Thomas F. Clayton, the interim CEO of Old National Insurance. Mr. Clayton, who has been with the company 35 years, is leaving at the end of February.
Mr. Clayton was also the executive head of administration and operations. He will be succeeded in those duties by Annette W. Hudgions, formerly the executive vice president in charge of operations, who has been promoted to chief administrative officer and reports directly to Mr. Jones.
The new management structure includes an eight-member executive council that reports to Mr. Jones.
The eight include Mr. Hinton and Ms. Hudgions. The others are the treasurer, Christopher A. Wolking, who will succeed John S. Poelker as chief financial officer when Mr. Poelker retires this quarter; Allen Mounts, who was promoted to chief human resources officer from director of human resources; Daryl D. Moore, the chief credit officer; Jeffery L. Knight, the chief legal counsel; and Caroline J. Ellspermann, the CEO of Old National Wealth Management.
The CEO is also changing Old National’s mortgage strategy. The company used to open loan production offices in metropolitan markets to add loans to its books. Mr. Jones has canceled plans for future loan production offices and plans to close the one in Nashville. He wants to use mortgages as a way to build customer relationships, not as a way to make money from transactions.
“It doesn’t fit in with our vision of a relationship strategy,” he said.
