He was one of my best students. He worked all day as an officer at a major bank and then came to class in the evening to get an MBA, earning a solid A from me as well as from many others.
I thought his career at the bank was pretty secure - that is, until I got a note from him saying he had resigned from the bank and had gone into retail brokerage!
Knowing he didn't have a rich family to sell stocks to and knowing how difficult the path to retail brokerage is, I called to find out what happened.
And I am wondering why his bank's management did not do the same as he left.
You Have to Ask
In every exit of a customer or an employee, there is something that the bank can learn, if it is willing to ask questions.
A grocer who spoke at a banker's convention I attended summed it up when he told why he gave $3 to a woman who complained that his store had sold her a rotten Cranshaw mellon at that price, when in fact his grocery had not had a Cranshaw mellon in stock for months.
"No one tells you why they stop shopping here, they just don't show up again," the grocer said.
"In most instances, people spend $100 a week here - that's $5,000 a year and $50,000 a decade. Am I going to risk that for the price of one mellon?"
A grocer doesn't have the opportunity to interview people who stop shopping with him. Bankers do.
Yet I have been amazed that even though I have closed several bank accounts in my day, no bank ever took the trouble to find out why.
If interviewing former customers is valuable, think how much more a bank can learn by interviewing employees who resign, as my student did.
Here was an officer earning a substantial salary who decided to chuck it all and start at the bottom.
What could the bank have done to so alienate him and make him willing to take such a risk, not to mention a major pay cut?
His answer was as follows:
Most important, we had new management that came in, bringing with it a number of new faces.
"It also brought an attitude: that those on board from the days before the management change can't deliver."
"You're one of the others," meaning one of the people on board before the management change, was the scorning way a top officer had addressed my friend in discussing his role in the bank.
The bank had been broken into a prechange and postchange culture split.
"And even if we hadn't had this split, there were a lot of new people who came in and were placed above me on the ladder, hurting my long-term career path," he added.
As if this were not enough, my student explained that the bank had developed a bell-curve system of compensation, under which each department had just so much more money to distribute in raises each year.
"If I got more than 4%, it would be out of one of my associates' own raises, no matter how good our department was as a whole," he explained.
To me the analogy would be grading on a curve that requires me to flunk 10% of the students, whether they should really fail or not.
My student's other complaints were more specific. They included working for a manager who required reports that involved 70-hour weeks at times, but then she could not make a decision on the data when it was finally presented to her.
It involved working for a manager who had been "Peter Principled" up from the cost control work, at which he was superior, to a managerial position at which he was not.
Every Issue Has Three Sides
Certainly these specifics that he talked to me about are his own viewpoint. And I am sure if I had called these two managers he reported to I would have gotten quite a different story. After all, every issue has three sides: my side, your side, and the truth.
But the key is that, whether his opinion was valid or not, the bank could have learned a lot from hearing it, digging in, and finding out if the same policies and practices were alienating other valuable employees also.
Some bank CEOs answer their own phones. They find this way they can learn information that the staff wants to screen from them, either out of the fear that the CEO will hang the bearer of the bad news or just to keep the work load down by avoiding the need to tackle these sticky issues.
If you can learn a lot merely from answering your own phone, think how much you could learn from lunch with a disgruntled officer who has just given up years of ladder climbing and undertaken a new, difficult career.
For unlike the grocer, you know who your defectors are, and you can talk to them to find out what happened.