How A Community Bank Found The Right Road
The Challenge
As the case with many small banks in the U.S., CommBank had been an integral part of its community for decades. Founded in the early 1900s and family-run for many of those years, the directors had grown the institution to the second largest in the region, serving several counties with multiple locations. The bank had a solid record of operating in the traditional way of community banks, competing in pricing and offerings. Their advantage was in service, through direct contact from tellers, personal bankers and managers with their customers who were often friends and neighbors.
Despite the residual benefits enjoyed by CommBank because of its sound reputation, the bank faced challenges that troubled many community banks throughout the country:
- An industry trend toward consolidation bringing fierce competition from large, multi-state banks,
- Increasing regulatory pressures,
- Expensive technological advances that needed to be implemented to stay competitive, and
- Lack of growth opportunity.
As with many companies, CommBank leadership was uncertain about which road to take:
- Did they continue to focus strictly on customer service as the distinguishing characteristic of their bank?
- If they chose to introduce new products, which would be the best ones for their existing markets?
- Which new markets offered the best choices for growth?
- Which technology, if any, should they offer their customers? How would the board react to the investment in such technology?
- How did CommBank stack up compared to the competition, especially by the larger financial institutions that had come into their markets?
CommBank turned to The Oliver Group to design and facilitate a planning process to get the answers to their questions. How did they stack up to the competition? Were they ready for the bigger markets they sought?
The Process
Working with key members of the executive team and board, The Oliver Group suggested that CommBank needed more information about the current state of their industry and about themselves before they could make a real plan for the future. After industry and market research was complete, CommBank had a snapshot of the industry, where they fit in, and where they might consider growth.
From this research and the debriefing that followed with the board, the entire leadership team was introduced to the strategic process, reviewed the research findings, and introduced the new vision. Together, the team designed new goals based on the vision. The process included a thorough analysis of the challenges and opportunities facing the bank to achieve each goal and focused on four areas critical to implementation: customer interaction, financial results, internal processes, and learning and growth for employees.
The Change
It has been said time and time again that the best strategy in the world is only a piece of paper if the organization lacks the personnel, the skill or the will to successfully implement. CommBank did execute their strategy and very successfully. Today the bank has now expanded into pre-determined markets with new branches, creating greater return on average assets and total net income.
