Making Great Hires

Quickly:

  • Next week, Bank Director hosts its annual Bank Compensation & Talent Conference at the Four Seasons outside of Dallas, Texas.  In advance of the event, a few of my thoughts on how banks might be inspired by Netflix, JPMorgan Chase & Co. and Pinnacle Financial Partners.

WASHINGTON, DC — As one of the best-performing stocks on Wall Street, you can bank on Netflix spending billions of dollars on even more original programming, even without a profit. Likewise, JPMorgan Chase & Co.’s consumer and community banking unit attracted a record amount of net new money in the third quarter.

How do I know this, and what’s the same about these two things?

Read their most recent earnings reports. Netflix doesn’t hide its formula for success, and JPMorgan boasts about its 24% earnings growth — fueled by the consumer and community banking unit — which beat analyst projections.

While we all have access to information like this, taking the time to dig into and learn about another’s business, even when not in direct competition or correlation to your own, is simply smart business, which is why I share these two points in advance of Bank Director’s annual Bank Compensation & Talent ConferenceBank Director’s annual Bank Compensation & Talent Conference.  Anecdotes like these prove critical to the development of programs like the one we host at the Four Seasons outside of Dallas, Nov. 5-7.

Allow me to explain.

Executives and board members at community banks wrestle with fast-shifting consumer trends — influenced by companies like Netflix — and increasing financial performance pressures influenced by JPMorgan’s deposit gathering strategies.

Many officers and directors recognize that investors in financial institutions prize efficiency, prudence and smart capital allocation. Others sense their small and mid-size business customers expect an experience their bank may not currently offer.

With this in mind, we aim to share current examples of how stand-out business leaders are investing in their organization’s future in order to surface the most timely and relevant information for attendees to ponder.  For instance, you’ll hear me talk about Pinnacle Financial Partners, a $22 billion bank based in Nashville. Terry Turner, the bank’s CEO, shared this in their most recent earnings report:

“Our model of hiring experienced bankers to produce outsized loan and deposit growth continues to work extremely well. Last week, we announced that we had hired 23 high-profile revenue producers across all of our markets during the third quarter, a strong predictor of our continued future growth. This compares to 39 hires in the second quarter and 22 in the first quarter. We believe our recruiting strategies are hitting on all cylinders and have resulted in accelerated hiring in our markets, which is our principal investment in future growth.”

This philosophy personally resonates, as I believe financial institutions need to:

  1. Employ “the right” people;
  2. Strategically set expectations around core concepts of how the bank makes money, approaches credit, structures loans, attracts deposits and prices its products in order to;
  3. Perform on an appropriate and repeatable level.

Pinnacle’s recruitment efforts align with many pieces of this year’s conference. Indeed, we will talk strategically about talent and compensation strategies and structuring teams for the future, and explore emerging initiatives to enhance recruiting efforts. We also explore big-picture concepts like:

Making Incredible Hires

While you’re courting top talent, let’s start the conversation about joining the business as well as painting the picture about how all of this works.

Embracing Moments of Transformation

With advances in technology, we will help you devise a clear vision for where your people are heading.

Creating Inclusive Environments

With culture becoming a key differentiator, we will explore what makes for a high-performing team culture in the financial sector.

As we prepare to welcome nearly 300 men and women to Dallas to talk about building teams and developing talent, pay attention to the former Federal Reserve Chairman, Alan Greenspan. He recently told CNBC’s “Squawk Box” that the United States has the “the tightest market, labor market, I’ve ever seen… concurrently, we have a very slow productivity increase.”

What does this mean for banks in the next one to three years? Hint: we’ll talk about it at #BDComp18.

A Look Back at AOBA: A Week in Pictures

#AOBA17 – final conference intel
By Al Dominick, CEO of DirectorCorps (aka Bank Director and FinXTech) | @aldominick

Quickly:

  • 686 bankers comprised the 1,076 registered attendees — a figure that reflects the participation of 379 financial institutions.
  • 24 of our awesome team were on-site hosting this year’s event — all are celebrating what we affectionately refer to as “AOBA Day” by taking today off as a company holiday.

_ _ _

This has become something of a sharing tradition… a look back at a phenomenal week in Arizona.  New this year?  The welcome video we arranged to introduce our team to our guests on Sunday morning.

As I shared in a Sunday afternoon post (Trending at Acquire or Be Acquired), the best way to understand this event’s popularity is to look at this picture from Sunday morning at 8:16 AM (e.g. one minute after I turned the stage over to our first speaker, the CEO of KBW, Tom Michaud).  Already, we had 900+ in their seats for this 2.5 day program.  Let me say that one more time… 900+ in their seats on a sunny Sunday Arizona morning.

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So with that in mind, take a look at some of the photos shared by our on-site photographer, Keith Alstrin (Alstrin Photography).

If you’re interested in what is being discussed for the present + future by some of the industry’s most influential executives, I invite you to follow me on Twitter via @AlDominick along with @BankDirector and its @Fin_X_Tech platform.  To take a further trip back and see what was being shared with (and by) our attendees at Acquire or Be Acquired, we encouraged the use of #AOBA17.  We are excited to do this again next year and hope you’ll save the date!!

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How We Are Taking a Lean Startup Approach to our Grown-up Business

A lean startup methodology enables entrepreneurs to efficiently build a company by searching for product and/or market fit rather than blindly trying to execute.  I find it helps mature companies too — and thought the perspectives of Stanford Professor Steve Blank, Silicon Valley entrepreneur Ben Horowitz and Y Combinator’s Sam Altman might resonate with bankers, fintech companies and other small business CEOs that are thinking about how to adapt their businesses to new challenges and opportunities. 

Paying It Forward

By Al Dominick // @aldominick

As someone who long aspired to build and run a company, I take great pride in leading a profitable, privately-held, twenty-person-strong small business.  In the past, I have written about my “people > products > performance” approach to leading the Bank Director team.  So when Ben Horowitz (co-founder and Partner of the venture capital firm Andreessen Horowitz) shares on his blog, “it’s not about how smart you are or how well you know your business; it’s about how that translates to the team’s performance and output,” I find myself nodding in total agreement.

Look, I am so very proud of our team’s accomplishments… but I am even more excited to adapt the lean startup methodology to scale our business.  The approach we are taking builds on the wisdom and experience of others. So for anyone responsible for growing their business, allow me to recommend two “must reads:”

For me, we are “all-in” in terms of taking a lean startup approach to expanding our business without compromising our reputation for going narrow & deep, providing a “Four Seasons” level of experience at our events and delivering outstanding ideas and insights to a hugely influential audience.  In addition, we are supremely mindful to do as Sam Altman says.  That is, create something that a small number of people love rather than a product that a large number of people simply like.

H1: The Core Business

Admittedly, I am hesitant to call our approach to growing Bank Director a bootstrapping effort since the brand, relationships and revenue being generated enable us certain luxuries that many start-ups simply do not have.  Nonetheless, let me show you how we adapted the Horizon 1 (H1) and Horizon 3 (H3) framework depicted above to our business.

What began in 1991 as a traditional publishing company now operates as a privately-held media enterprise delivering original content to CEOs, executives and board members of financial services companies via digital platforms, exclusive conferences and award-winning publications.  Below is a visual example of our transformation vis-a-vis three magazine covers.  As you can see, we have matured in style while expanding our frequency (from quarterly to monthly) as we expanded our distribution channels.

Going narrow and deep works for us since we generate our revenue from the annual conferences & events we host (e.g. our 800+ person Acquire or Be Acquired conference), publications and research we publish and education & training services we provide.

H3: Where the Wild Ideas Live

With three consecutive years of top line growth (and healthy bottom line results to boot), we are in the wonderful position to grow in some pretty cool ways.  But doing so will take more than simple process improvements and expense control.  As we have a strong business foundation in place, I did have to restructure my management team’s individual roles and responsibilities to better suit our H1/H3 setup.  I did so because as Steve Blank points out, “Horizon 3 is where companies put their crazy entrepreneurs… these innovators want to create new and potentially disruptive business models.” As fun as living/working in H3 sounds, let me emphasize how much I rely on the H1 team to “defend, extend and increase” our core business.

Is it working?  Well, we will formally announce a new venture, FinXTech, on March 1, 2016 at Nasdaq’s MarketSite in New York City.  This is the first — and surely not last — project to emerge from our H3 world.  But time will ultimately tell.

We are a collection of creative men and women and I am very optimistic about our future.  Realizing that we want to continuously push to grow and innovate led me to appreciate “the need to execute (to the) core business model while innovating in parallel.”  So today’s post isn’t an attempt to make me look smart; rather, my attempt to acknowledge the inspiration of others and share what’s working for us.

The Week in Pictures (Inspired by a New App & Dig’Mag)

With Memorial Day jockeying for attention, allow me to reflect on a great week.  Specifically, by sharing pictures from Monday evening at Urban Grub in Nashville, TN where the Bank Director team, along with friends & family, celebrated the development and launch of our new app and digital magazine.  

While many companies in the content business are moving away from print or simply discontinuing operations, we are ramping up to meet the needs of our audience.  Our new digital magazine is not simply a replica of, or replacement for, our print publication.  Rather, it is a dynamic new product that allows us to stay on top of emerging trends specific to a bank’s key leadership team.  What makes the launch so much sweeter for me personally?  All of our “friends” who have decided to take the concept of “imitation as flattery” to ridiculous extremes will have quite the go trying to replicate something built by scratch from our very talented team.

So along with the open bar & champagne toast, what was on the menu? Mmmm, a charcuterie of house cured meats, local & imported cheeses, a roasted oyster & crawfish boil, corn and red potatoes, a whole roasted suckling pig, ham hock collards, white beans and a desert of banana pudding pie.  All deeee-licious.  So a big thank you to the folks at Urban Grub for taking care of us… and a HUGE congratulation to our entire team on a job so very well done!!

*Bank Director’s free app & digital magazine is now available for download through Apple’s App Store, Google Play and Amazon.com.

Mid-April Bank Notes

I recently wrote How the Math Works For Non-Financial Service Companies.  Keeping to the quantitative side of our business, I’m finding more and more advisors opining that banks of $500 – $600M in asset size really need to think about how to get to $2B or $3Bn — and when they get there, how to get to $7Bn, $8Bn and then $9Bn.  With organic growth being a bit of a chore, mergers and acquisitions remain a primary catalyst for those looking to build.  But what happens if you don’t have a board (or shareholder base for that matter) that understands what it takes to grow a company through acquisitions?  This question — not deliberately rhetorical — and two more observations, form today’s post.

A Collection of Individual Relationships

Just because a bank is in a position to consider a merger or acquisition doesn’t mean it is always the best approach to building a business.  This thought crossed my mind with Nashville-based Pinnacle Bank’s recent acquisition of Chattanooga’s CapitalMark Bank & Trust — the first deal struck by the bank in the last eight years (h/t to my fellow W&L’er Scott Harrison at the Nashville Business Journal for his writeup).  Run by Terry Turner, the bank enjoys a great reputation as a place to work and business to invest in.  As Terry shared with the audience at this year’s Acquire or Be Acquired conference, he doesn’t hire someone who’s been shopping their resume, a point that stuck with me and resonated with a number of other executives I was seated near.  So when I think of team building, his institution is one I hold in high regard.

The same can be said for First Republic, who like Pinnacle, is known for organic growth and fielding a standout team.  The bank recently posted a 90 second video from its CEO and Founder, Jim Herbert, that gives his thoughts on culture and teamwork.  Having written about Jim as part of a “Best CEO” series, this clip highlights the foundation for their continued success.

General Electric decides it no longer needs to be a bank

If you somehow missed GE’s announcement, the Wall Street Journal reported this is the conglomerate’s most significant strategic move in years.  While I will let others weigh in on the long-term benefits in selling its finance business that long accounted for around half the company’s profits, it was nice to see our friends at Davis Polk advising GE through the sale of most of GE Capital’s assets.  So the assets of the 7th largest bank in the country, some $500 billion in size, will be sold or spun off over the next two years.  Why?  “The company concluded the benefits aren’t worth bearing the regulatory burdens and investor discontent.”  Feel free to share your comments on this below.