What the Top 1% of Banks Do That the Other 99% Still Don’t Get
In this video, I discuss how the top 1% of community banks are not working harder than their competitors—they’re working smarter. By leveraging a high-performance...
I believe a good acquisition should be “normalized” in within a quarter—and quickly profitable.
In this episode, I’ll share with you a few elements of a system we use with our clients that have allowed for them to normalize the culture and get everyone playing nice in the sandbox together within a week and assure the acquisition hits its financial expectations that first year.
If you’re the kind of leader:
There are a few challenges to preparing your systems for acquisition so that it is effortless with little chance for drama or upset.
Seems like one of these obstacles is in the way of acquisition preparedness for almost every bank that is getting close—putting the acquisition at great risk.
I’m now going to give you four steps that will help you prepare for a successful acquisition and dramatically lessen the risks of a good acquisition going bad.
Step 1: Make sure you have an iron-clad system in place so that any new lenders are attracted to the success of the system and fall in alignment immediately. From how you differentiate, to how you select your next prospect to approach, to how you approach, so that rate and pricing are never issues, to how you bring the entire relationship—all of those are systems. This is not a good part of the business to let each person experiment and pull a Frank Sinatra and “do it my way.”
Step 2: Make sure you have a human capital audit in place using an emotional intelligence system designed for banking. Don’t bother with personality tests such as DISC and Predictive Index that have very little correlation to performance in a job. You want to know the scores for your current team and departments instead so that you can optimize each department. I’ve seen banks operating on 1/3 30% less people just by mastering their human capital audit and getting everyone in the right seats on the bus.
Step 3: Over-communicate. During an acquisition, your team members will make things up in a vacuum. Who will get laid off? Who will get that promotion? Will bonuses be decreased because of the acquisition costs? The conversations that become “the truth” (which have little to do with reality) can take over your culture if you are not over-communicating everything. For the things you can’t share, often repeat that you can’t discuss a few things yet, but that you will as soon as you can.
Step 4: Make sure that everyone is tied to the strategic plan and knows what their weekly critical drivers are, what their TOPs and SMARTs are, and how they and their team are doing each week compared to plan. If that level of connection to plan is not in place prior to an acquisition, the amount of “busy by the water cooler” activity with no connection to profit goes up substantially and quickly.
Just four steps:
If you apply these culture alignment steps at least three months before you do an acquisition, you can have an extremely strong chance of beating the odds where 87% of acquirers fail to meet their financial projections. You can sleep easily, knowing that you have a strong probability of having your acquisition be a success.
Make sure you tune in next time where I’ll show you can avoid the “assumed” 30% loss of customers when you have your next acquisition.
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