Service industries have traditionally trailed manufacturing in the intangibles of management.

Strategic planning, for example, was well established in the manufacturing sector long before financial and other service businesses considered the idea.

Now corporate culture and corporate values seem to be next in line.

More and more financial services companies are turning their attention this way. In addition to managing by the numbers, they are starting to define the values central to their identities.

These values are being integrated into management styles, acquisition strategies, and reward systems.

Emphasis on People

An example is Sovereign Bancorp, a $2 billion-asset thrift company based in Wyomissing, Pa.

Sovereign has a crystal-clear strategic focus.

Its overwhelming asset emphasis is residential real estate lending. Its funding comes from deposits generated through strategically located branches outside major metropolitan markets.

With three thrift units, each serving a well-defined market, Sovereign is patterned on the super community bank model.

The company sets clear performance targets, and its No. 1 guiding principle is shareholder value. Still, Sovereign puts a tremendous emphasis on its people and the values that guide them.

Making the numbers is not enough; how they are made is crucial.

Team Approach

Accordingly, Sovereign does not have "employees;" it has "team members." And what would elsewhere be the human resources department is "team member services" at this company.

Managers are "leaders." Each of the company's 15 departments has developed its own mission, vision, and strategies. All are consistent with an extremely concise corporate vision statement and an ironclad commitment to customer service.

Sovereign boasts a return on assets of more than 1% and a return on equity of more than 16% - strong numbers.

All "team members" are also shareholders, and bonuses they use to buy stock are matched by the company. Sovereign goes well beyond the garden-variety 401(k) plan.

The idea is to share the company. For example, the best parking spot is reserved for the employee of the month; the chief executive doesn't even have his own spot.

Perhaps Sovereign's high profitability is no accident, nor is its $4.2 million in assets per employee - more than double the industry average.

Many other banking companies, particularly those emphasizing service and customer relationships, also focus on corporate values.

At $2 billion-asset First Michigan Bank Corp., service orientation and accountability are expected from everybody - staff and line employees alike.

For example, each employee has at least one "customer" - who may be another employee.

Internal customers are held to deserve the same service, efficiency, and courtesy as external customers.

First Michigan emphasizes such values as honesty, fair dealing, and partnership with all it constituencies - customers communities, vendors, an shareholders.

And the bank has been extraordinary successful. While doubling its size in four years, it sustained an over- 16% return on equity.

Such success is evidence that combining clear expectations and rigorous financial management with corporate identity and the attendant values can be very effective.

Leading by Example

At $5 billion-asset Georgia Federal Bank, a "corporate heroes" program highlighted the importance of branch employees going the extra mile.

Dick Jackson, a former Marine who is chief executive officer, used leadership by example to inspire his people. He supported the value drive with incentives. The result: unique branch-originated service programs and another 1% ROA-16% ROE performer.

Keystone Bancorp in Harrisburg, Pa., with $3 billion in assets, communicates its mission and vision to every single employee and trainee.

In addition, the company instituted its "President's award," which gives special recognition to service beyond the call of duty. The awards are given at company meetings where every officer votes. The program led to formation of an internal quality institute.

Keystone has achieved 1% ROA and 17% ROE.

Bottom Line Speaks Loudly

Those are but a few of the success stories of corporate culture and values clearly communicated and rewarded with well-thought-out motivational programs.

Talking to employees of these firms, I have been impressed with their clear understanding of their business and its objectives, as well as their purposeful style and goal-oriented behavior.

These stories may sound. Pollyannaish, but the profitability numbers speak for themselves.

Ms. Bird is national director of financial institutions consulting at BDO Seidman, New York.

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