Keys To Success

The Bank CEO Network recently sponsored a seminar on loan pricing. CEOs and Chief Lending Officers from five high performing banks provided insights to other Bank CEO Network members and lenders.

Specific strategics and tactics varied from bank to bank. However, there are four common characteristics that are appear to be keys to success. Those characteristics are:

• An in-depth understanding of risk
• A clear knowledge of who or what the organization is and where it is going
• People who "fit"
• Persistence

A formal risk assessment isn't always necessary to understand risk. However, the leader needs to know the answers to a lot of "what happens if?" questions. What is the absolute worse case result? Could we afford the risk the possibility of a worse case result? How likely is a worse case result? How does that compare with the upside potential? Will a change bring more risk or less risk?

Everyone in the organization needs to understand the organization and its goals. This is especially true for top management, but every employee needs to be a part of the success of the organization. For example, a bank that is structured to work with commercial customers would not spend time and money creating retail products and services. The organization needs to be focused.

Saying an organization needs people who "fit" could be interpreted in a number of ways. In this situation "fit" means people who accept the culture and direction/goals of the organization and work to make a meaningful contribution to its success. Square pegs don't fit in round holes and sales people generally don't function well as bookkeepers - but you need both. Create an organization of people who are each doing what they do best in ways that will improve the possibility of success for all.

Persistence isn't always good. Refusing to admit a mistake and persistently moving down the wrong path borders on stupidity. However, persistence is often needed to keep an organization on track. Without unfaltering persistence, most organizations will veer off course and never reach their desired objectives.

Obviously, other factors such as effective operating controls, financial resources, etc. can not be ignored. Even with seemingly unlimited financial resources and effective operating controls, it would be rare for an organization to excel over time without these four factors.

What's your perspective? Are there other equally or more important factors that drive success?