fears that superregionals and money-centers will swallow up their business are overblown. Here's proof that community banking is alive and well: Whenever a bank is bought by a much larger one, business soars for the remaining independents. Customers switch to retain the personal service their old bank is obviously reducing or eliminating. People want a quick answer to any request - even a quick "no" is better than a slow"yes." They want a bank that is sensitive and immediate in correcting errors. And they want to be treated like individuals. Every day, newly acquired banks lose longtime customers. One reason: Suddenly those customers find themselves dealing with employees who don't appreciate how important their business is. Community banks are not going the way of the dinosaur. I've been saying this constantly in my talks and articles, even though some friends and fellow observers insist that larger banks have services and efficiencies that the community bank just can't match. But now I must report a caveat. A recent trip to Minneapolis and the 1995 Management Conference of Norwest Banks convinced me that community banks will have to work harder to keep their advantage. What did I see that so impressed me? Sure, I observed 550 enthusiastic bank officers from across the entire corporation singing its theme songs. I heard them cheer its chief executive, Dick Kovacevich, as well as veteran bank meeting arranger (and song leader) Dick Erickson. I watched that crowd waving napkins to salute Norwest as if it were a beloved college. And the meeting itself showed how Norwest values its employees' time. Colin Powell and Melissa Manchester were brought to Minneapolis. So was the head of IBM's banking group. And a speaker and a theater group devoted two and a half hours to the topic of diversity in the workplace. But had I been a community banker sitting in that audience, the one sentence that would have scared me most was this from Dick Kovacevich: "It is as important to steal ideas as to develop them." The most important ideas Norwest is trying to steal have to do with how community banks handle people. "Recognition is the most underrated corporate resource," the delegates were reminded. (This is a key tenet of good community banks.) "The customer is king, no matter how large the bank." One delegate I met had been chief executive of his own bank until it joined Norwest. I asked him a touchy question: What is the most significant thing you have learned - good or bad - that you didn't know before you joined Norwest? "That they keep their word," he said. "They let me run my bank the way I had, to serve the local customers as I felt they should be served." Decisions are still made locally. The people I talked to felt that, to their customers, they were the bank - they made the decisions. I heard that from old-timers who'd known Norwest as a mere regional (known locally as "Banco") and from newcomers whose banks had just come on board. Now add to this Norwest's efforts to save money in every way that won't affect the public, from centralized purchasing to developing standard forms throughout the bank. Put it all together and you can understand how it could raise ROA to 1.50% - a staggering achievement for a large institution. Kovacevich's basic message to the troops was: "Don't rest on your laurels. Sure, look at what we have accomplished - but it could well be that everything we do is already out of date. We must have a culture that is willing to change." The core competencies, as Kovacevich stated them, are people, selling service, management of risk (including diversification), technology for pricing and selling, and an environment of enthusiasm that makes banking fun. As to the specifics, Kovacevich added, they can always change. It is like a teacher who fearlessly hands out the exam questions in advance, explaining that they're always the same anyway - it is the answers that change. This is Norwest's goal - to find ever-new answers to the perpetual questions. Community banks should take the same approach.

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