* * *
EMPLOYEES
If you don't grow, how are you going to attract and keep good people?
If ever there was a scene that captured the esprit de corps of Apple's early go-go years, it was the Friday afternoon beer bash -- the quintessential image of a freewheeling company having fun and making money all at the same glorious time.
Banks -- staid, conservative, bureaucratic -- can't afford such antics. Or can they? While Apple's all-company beer bashes are now a historical anecdote, UNBT has its own version that lives to this day. It has the bankerly title of Statement Day. Once a month employees from the chairman on down gather on the third floor to collate each customer's bank statement. But the mood is quite unbankerly. "We trade jokes and socialize," Schmitt says. "We eat and laugh, lick envelopes, and tell stories." It's a tradition born of customer service: UNBT promises customers their bank statements will be in the morning mail on the second business day of the month.
Statement Day is emblematic of the way Schmitt approaches what he considers the toughest part of staying small: keeping employees motivated. He does this first by being honest. "I tell new hires that there's little chance they will head a branch." Then he looks for people who know firsthand the toll of fast growth. That way, they are more apt to appreciate his strategy.
That's why his ideal employee for a limited-growth company is someone like Tormey Ward Jr.
Soft-spoken and reserved, 52-year-old Ward has a legacy in banking that stretches back to the 1930s. His father was a banking legend. Abhorring files, Tormey Ward Sr. kept the loan records of hundreds of clients stored in his head.
Both father and son earned their stripes at Wells Fargo, considered the preeminent bank in town. But as the younger Ward was midway into his second decade at Wells, the bank began shifting radically. Assets swelled from approximately $8 billion to $49 billion, as Wells gobbled up nearby banks in the battle for ever-increased growth.
"Right and left, 55-year-old guys were encouraged into retirement," Ward says. "Given a choice between two people, the bank opted for the lower-salaried younger person."
It was then that Schmitt and UNBT's president, Herb Foster, pounced. For more than six months the two courted Ward. They laid out their concept of "relationship" banking -- the Unbank's unusual customer service and commitment to staying small. Finally, Ward left Wells behind for a senior vice-president position at UNBT.
Schmitt makes a science out of such recruitment tactics. It's a policy that's paid off. In the 10-mile radius surrounding UNBT there's a large pool of bankers in their forties and fifties. Many have spent years helping their banks grow, only to fall victim to increased bureaucracy and distance from the customer. While many CEOs figure such managers are indoctrinated in big-company culture, Schmitt finds just the opposite is true. Says UNBT's chief financial officer Gayle Anderson: "We who grew up in the larger institutions appreciate how productivity slips when you work in a dreary place where long rows of desks look exactly alike. I would wager that this experience helps us better appreciate that people are most productive when they're happy and having fun."
Having fun. It's a refrain that Schmitt keeps coming back to when he explains how he confronts the challenge of keeping highly qualified people motivated when he can't offer to put their names in lights. He starts with symbols. All UNBT courier trucks, for example, depict employees doing exactly what you would expect your banker not to do. One truck shows Schmitt cheating at poker while dressed in prisoner togs behind bars. Another depicts a senior vice-president at her money-printing press while two bank officers inspect her handiwork with magnifying glasses.
Schmitt chooses symbols that almost encourage employees to break the rules. In a bank of all places.
"What will kill this company first is a bunch of people running around with their noses stuck in rule books and manuals," says Schmitt, pounding his desk righteously. More than just contributing to a starchy atmosphere, he claims, they allow people to avoid taking responsibility for their actions, sapping the challenge out of any job.
He offers the example of a typical front-line employee -- the teller -- who usually works off a mile-long list of do's and don'ts. At UNBT, tellers make their own decisions about whether or not to accept a check, based on their own subjective criteria. While teller turnover is usually about 50%, at UNBT it's zero. Add to this less time and money spent by managers supervising tellers, and you have both speedier service and money saved.
Then there's the example of senior vice-president Suzanne Powers, who saw that friction between the tellers and the customer service group -- the people who process all the tellers' transactions -- was about to boil over. "They both thought the other group didn't appreciate the challenges of their own job," she recalls. So Powers instituted a job-switching program in which tellers worked in customer service for several days and vice versa. Within weeks, Powers says, the tension was defused. What did Carl Schmitt think? He wasn't told about the program until it was well under way.
