A CEO once told me his recipe for success was that he had "many friends in low places."

I recently heard two banking stories on two consecutive days that convinced me his saying was wise.

In fact, knowing people in "low places" has played a role in the advancement of many top people. They have earned the friendship and loyalty of the low-level staff people who can often make or break the bank.

But the importance of people in "low places" goes further. It allows a leader to get information on what is happening in the organization and in the customer's operations too.

My first story involves a lending officer whose bank did not get involved in a major housing project in New Jersey. The project failed, crippling its lead lender and seriously damaging all the other banks and thrifts that had participated.

"How did you avoid going into the project?" I asked a former student who was chief mortgage officer for his thrift.

"It looked too slick," he said.

So he decided to go deeper. He went to the project and talked to the construction workers. And, boy, did he get a different story.

They told him the project was being built on the cheap with poor materials and shoddy practices. He heard the developers were having cost overruns. He denied the loan.

My second case involved a current student.

She went to her bank to cash a check for around $100 made out to her husband and endorsed over to her. She presented identification and even showed a power of attorney signed by her husband.

The drive-in teller hesitated but told her that her husband should cash it himself the next time.

My student was incensed, so she confronted the manager.

He said he wanted to know how much money she had in the bank before he tried to keep her business.


My hope is that the readers of this column will think, "That couldn't be my bank she is talking about."

So after my two conversations, I have widened my interpretation of the expression "I have many friends in low places" to include as "friends" people who can realistically tell us the score where the real action takes place.

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