MidAtlantic Division, M&T Bank
Focus fueled by a passion, and commitment to consistently apply it.
“I wish the ingredients for successful leadership could be boiled down to a step-by-step recipe. It is more complex than that,” says Atwood Collins of M&T Bank. “Nevertheless, I have found a few techniques, which consistently applied, have yielded successful results.
“The principal technique I use is focus fueled by a passion, and commitment to consistently apply it. What do I mean by focus? Focus first on what objectives you want to accomplish, what your organization is good at, and how you are going to do it.
“For example, in our business of banking, there are approximately 9,213 competitors all doing the same thing: taking deposits and lending money. But the incredible thing is they do it with wildly different results. What does that tell you? Success lies in the execution, not the strategy.
“Successful banks, and M&T is among the best, focus on doing ‘the common uncommonly well.’ Give the client what is expected and do it consistently. Sounds simple, but it is incredibly hard. Hard in the sense that consistent execution requires tremendous attention to detail, significant energy to repetitiously execute, and a commitment to be tireless in the pursuit of being consistent. So, to boil it all down a few simple steps.
- Focus on what you want to achieve, and how you are going to do it.
- Develop simple metrics to reassure your success in achieving those goals you have established. I stress simple metrics, because a lot of businesses try to measure everything, which in reality is measuring nothing.
- Be consistent in how you execute the objectives.
- Relentlessly review your performance and adjust or retool where necessary.
“I have two examples in our business of how we applied what I have just discussed. One of our first acquisitions in the late ’80s was a mutual savings bank. This was a significant undertaking at the time, because we were roughly the same size, and the acquired company lacked the staff and infrastructure to do what we, as a successful commercial bank, knew how to do.
“The first thing we did was focus on what the company did successfully. In dong so, we found out that they had a long history of lending on commercial real estate, primarily multifamily. They not only had an excellent track record measured in terms of charge-offs as a percentage of loans outstanding; but also they had a staff who knew how to do it, and a servicing infrastructure that could successfully monitor it.
“In terms of executing what they were good at, one of the first things we noticed was that they had a mortgage committee made up of primarily outside directors. The key ingredient was a centralized focus of decision making with consistent execution in applying it. This was somewhat unusual in that directors rarely get involved in day-to-day decision making.
“However, New York City real estate is so unique that local specialized-knowledge is key to being successful. We made the chair of the committee one of our directors who was a successful New York City owner of multifamily and commercial properties. We then recruited other owners and developers as directors.
“They met every week and reviewed with management all loan requests. The insight that they brought to the table was invaluable. In many cases, they owned a similar building in the neighborhood, and we could focus on the underlying operating metrics of a particular property with an objectivity that would otherwise be missing.
“The committee also provided us with an appropriate check and balance in our decision making, as bankers sometimes make the mistake of ‘never meeting a loan they didn’t like.’ As a consequence, I believe our mortgage committee and the directors who serve on it have been critical to our success in this business over the last fifteen years. Again, the key leadership ingredient is ability to focus and measure key operating economics of a commercial property with objectivity.
“Another example of an application of what I have been talking about involves our efforts to systematically and constantly measure the activities of our bankers. We developed a simple system called Sales Force Automation (SFA) at a cost of a little over $1 million. We built it as opposed to buying someone else’s version of what they thought we should measure.
“While SFA performs numerous functions, in its most basic form it measures three activities:
- Calling activity on prospects and customers
- The resultant loan and fee pipeline and the percentage of likely success
The booked outstandings or fee based transactions
“Simple metrics, which consistently applied, create a tremendous sales management tool.
“At our monthly and quarterly review meetings, in addition to reviewing the financials, we have each manager review these simple sales metrics for each business. It is amazing to see the linkage between the calling effort, the loan pipeline, and the resulting impact on our balance sheet and income statement. Once again, these are simple metrics, consistently applied.”
As for becoming a successful leader, Atwood says, “there are certain-things that can be taught and others are acquired through trial by experience. However, I would again first start with a focus on what you want to accomplish and how you are gong to do it. I’m not talking about a mission statement. What I mean is specific objectives with detailed means and dates by which they will be accomplished.
“Remember, as a famous architect once said, ‘Life is in the details.’ Share your vision plan with your employees and organize their activities around accomplishing the objectives. Listen to and encourage their participation in the plan to achieve these objectives. Set up consistent simple metrics by which you can gauge how you are doing.
“As a leader you can have all the vision you like, but really it is not your vision that is important, it is the one that your people can see.
People see a vision of the future when they can clearly connect their objectives and their goals to the value that you are trying to create.
“Your first job as a leader is to help them to make that connection. Then you need to create consistent simple metrics by which you can gauge how you and your people are doing. And finally, not only do you need to be passionate in pursuing your goals, but you have to really love your customers.
“All of this takes huge amounts of focus, passion, and commitment, as well as bucket loads of energy and ownership and accountability. That is why there are far fewer leaders than managers.
“Finally, be relentless in your passion for consistently pursuing your goals. Many managers constantly underestimate the amount and level of energy it takes to do the common uncommonly well.”