The Ed Eppley Experience
The Ed Eppley Experience

Episode · 2 months ago

High Performance Culture

ABOUT THIS EPISODE

Consistent, exceptional results requires a high performance culture. Scott McComb, CEO of Heartland Bank inherited a culture that allowed mediocre performers to avoid accountability. (Ironically, it was created by his dad.) To change this culture. Scott instituted his Performance Culture model that helped reduce artificial harmony and identify internal terrorists. (They will be helped to find a better place to work!) Scott's practical and entertaining examples are a great reminder of what you can do to make your culture truly high performing!

New People come to my organization all the time and it's all my God. You realize the risk you're taking by sharing this information? Hi answer them is, do you realize the risk I'm taking if I don't? Welcome to the ED eple experience. Twenty minutes that simplifies the complex job of managing and leading people and inspires you to take action on what you probably already know to build and sustain a smart and healthy business. Here's your host Ed Epley to introduce this week's guest and business leader. Welcome everyone's to be Ed Epley experience, your opportunity to hear from other business owners, executives and successful operators of sustainable and profitable businesses their ideas that could help you do the same. We're doing a podcast today, which is the first of several that we will do, on building a high performance culture. You know I'm a fan of creating cultures that are aligned with and support your business model in your strategy. So I could think of nobody better than somebody who's actually been with us before, Scott mccombe, who's the CTU of heartland bank, to share his ideas with this. So Scott, once again, welcome to the ED eple experience and it's great to be here, is always. Thanks very much for letting me join you again on the program yeah, I know we're going to run out of time too quickly because you're going to have great stuff for our audience, but I want to get started by looking back to when you first became aware that culture was important to the success of a business. If you can recall when that was as best you can, can you share when, where how that became something that was on your radar? Yeah, and I'd say that when I first started my first business, I think, and when I was probably about six or seven years into that experience, I realized that, you know, you're only as good as your people. You're always good as the attitude of your people, and the way to do that is the truly have a trusting relationship and a healthy culture. Of course, my previous company only had seven employees in the one company and five or six in another, and two and another, so I had three companies going. So I didn't really have it wasn't too hard to creat good culture in a small business, you know, but when I get into banking and started to have, you know, forty, fifty seventy, now three hundred people, it becomes a little bit of a challenge, something have to work at. When you first became aware of the importance of culture, was it even called culture, or did you refer to it as team work? I'm curious about was it even going by the moniker culture? For you, it was not going by the longer culture. It was more about teamwork and collaboration. Came robbery, you know that kind of stuff. It was more feel good raw row stuff. It wasn't as scientific as it is today, but of course we were in a much simpler time than we are. Yeah, yeah, all right. So that's a little bit of background of when you became aware of the importance of it. Now, for those of you that are listening that aren't aware, heartland bank was the brainchild of Scott's Dad, tiny macomb, and I think of him as a larger than life personality, somebody who he cast a you know what, I probably would say he always hit or boxed above his weight class. You know, he he had this capacity to do extraordinary things that most people would not either have attempted or if they had, and they wouldn't have necessarily been a successful as your dad was. So what was his attitude about culture? Again, maybe he didn't call it culture, but I'm just curious about what you learned from him about that. You know, he was a sensitive guy, a very benevolent person that a lot of nonprofit work really love that. However, he surrounded himself with people that were mediocre performers, I'll have to say so. When I joined him in the bank he really needed a lot of help and he was a great banker. No one to know this from the outside of the walls of heartland, right, but on the inside at the time we had a group of folks that were kind of yes...

...men, you know, and there was a lot happening behind the scenes that, you know, he didn't see. When I joined the bank and the guts of the organization I got to see at all and I could see that in the board room and committee meetings and things that nature, the culture seemed to be very healthy, but underneath it really wasn't, because people were kind of just saying what time he wanted to hear when they were in front of him, and then they would do something else, you know, just shortly after. So it was a very unhealthy culture based on the fact that we weren't really high performing back in the early days in the bank. So how hard was it for you to have that conversation with your dad about the reality that you found when you joined the band? It was so tough one. I mean I had to walk in his office and shut the door and say, Hey, look, I think we need to fire this guy, you know, and our fire these people, and he would ask why and I would give him the reasoning and he just couldn't believe it. He be like, O'h my Gosh, you know it because he was so trusting of everyone. He was such a nice guy. You know, he would rip you up and down, like dress you down in front of everybody, but he would never fire anybody. Okay, so I kind of grew up with that and I am not that way. So I pledge to myself I'm not going to do that. If I'm going to have an issue with somebody, first of all I'm not going to scream at them. I don't need to do that. I'm not going to raise my voice. We're going to go through the process and, if you know, I talk to them. Wants about an issue, that's great. If I have to talk to him again. I'm I'm telling this last time. I'm going to talk to him about the issue and then I'm probably the third time. I'm already on the plan beat right. So that's kind of how we operate now and in the banking environment it's been very healthy. So was there a model that you followed to create the culture? Because I my instincts are and although I don't I'm not one of your clients, but I've been around the bank enough to and know enough people who are clients to to tell you that the feeling that most people that I have been around who do business with heartland feel like it's a bunch of great people who are really united about trying to do the right thing and on the same page. Is that accurate? In your opinion it is very much so. But that didn't come by accident, you know. So when I got to the bank we were a mediocre performer. We had the yes people there. We it was a lot of why are you here to upset the Apple Cart? So here I am, as young guy that didn't have a college education, entrepreneur, turned loose inside of a bank and and I create I was very disruptive, let's put it that way. And so I saw the way that we were in banking at that time. You needed to go people, customers would walk in the bank to apply for a loan. Right, you need a one right in the world has definitely changed, right, and anybody go anywhere and get alone and a couple of minutes and and bankers have to chase the customers, you know, and bring them happy. That was not what it was back twenty two years ago. So I actually came up with a model from a guy named Jack Hubboard of St Myer and Hubbard. I was sitting on a Webinar one day, or at that time it was a conference call with with printed materials, you know, right, we just barely had the internet and and and I adopted a model that we use today. It's called the performance culture model. And so instead of a sales culture, we started a performance culture model. And that, let me just explain if we have time. That what the what the plea performance culture model is. So the bank or the performance culture, I think of a bank where you've got a triangle on top, you have three pillars supporting the triangle and then a foundation under those pillars. Yeah, yeah, so we got that in your mind. The performance culture is supported by three equal, fully important pillars, people, processes and technology. Okay, and those three pillars are on a firm foundation of accountability. Okay, and we've taken that model every time since two thousand and two, so that's been twenty years now. We've used that model and build on that model to to continue to be better every day and better in our culture. And there's a lot of other things we do to enhance the culture as well well. Having a model, having a road map, having a framework. I think it's pretty important for an...

...organization to be able to stay consistent at the messaging and what you try to do and how you communicate because, as I'm sure you've experienced, you can't talk about this one time and expect it to happen. You can't expect it this at one get in implemented and, secondly, stick. And I guess I'm curious, first of all, do you agree that you know you have to keep working at and secondly, how much of your time is spent on culture in the Visiologiez? Well, I'm the culture officer. I mean we don't actually have a stated position like that, but I'll tell you we work at it all the time. We have all kinds of different things that revolve around our culture, from, I guess, the in the the smaller things. We have, as all employee meetings. So we have all point means on a quarterly basis where we share the financials with the the company and the strategies with the company and a strategic plan of the company all at reiterate that over and over and over again to our people and so they're in the know, you know, so they don't feel like they're in the dark. They could feel like they're part of the process. And again, that helps people be less defensive on why are we doing this? Why am I accepting change? Why should I accept change? Right? And none of those are debates. Usually the battles inside the bank you know about about why we're doing one thing or another. But we would do those. We have family events where we nothing about business. It's just family. So we were going to play in the field with our kids and cook out and eat hot dogs and hamburgers and sit on a cold drink together and and and trust each other with fellowship. That's another thing that we do. And then the third thing we do is we back each other up so when are one of our people gets sick, for instance, we are there for them. If they had an instance just the other day, where one of my associates is having some medical problems and and she really got, you know, kind of thumbed at by the hospital. They had a real a real buffoo, or they canceled her appointment. Are you know, this guy doesn't know what's wrong with her and sups and so worth it. Anyway, I have a relationship with the hospital, so I called the hot called the president of hospital and said, Hey, this is what happened to my employee, this is a key one of my people, I need you to help her out. And next thing you know, you know, she's immediately rescheduled. She's got the best people in there. They're on it, you know, and take care of well, that kind of activity from the higher ups in your organization taking care of your people goes miles. Oh yeah, and miles and miles and but you have to do that on a consistent basis, caring for your folks and fighting for them. You fight for them, they're going to fight for you. Yeah, I'm I've seen it happen and know that that is absolutely true. If you want loyalty, you have to give loyalty from to your people, right. Yeah, one of the other things that we do. That's we've done this now for ten years. We had all employe meeting last night, as a matter of fact, great and we had awesome center and we had a live feed down to our folks in northern Kentucky with a Little Bank we bought down there in a Greater Cincinnati market. We have a all associate survey and the alsocial survey is done every year. It's done usually done in late February or early March and and we ask very, very revealing questions and let anybody answer in, you know, an essay form what they'd like. So there's like seventy five questions all about trust of senior management, about how our benefits are. Are they paid fairly? Right, we do well. How's our technology? Do you think you understand the strategic plan? All these things, and then there's an essay portion of that as well and each section that says anything else you want to tell us. Well, we not only do we do that survey and we share the results, we give every single answer to every single associate and so there's no hiding there's no hiding. The management team cannot...

...hide behind the survey results and feed the feed it back to them, you know, after they you know, after they parade it into what they wanted to look like. We don't do that and that bus trust as well. Okay, so I've New People come to my organization all the time and they cannot believe that we are that transparent or like, Oh my God, do you realize the risk you're taking by sharing this information to the masses nice and my my answer to them is, do you realize the risk I'm taking if I don't? Yere you go. That's exactly right. I love that. I love that response to that question. I'm I guess I hadn't thought about it before today because I knew you did the acquisition in northern Kentucky, but that's a new that's a new aspect of culture for you that you've not really had to address before where you did an act with now you've done this acquisition and you have these, what three locations down there in Northern Kentucky? Yes, sir, yeah, and so now you're trying to integrate there and their previous culture. You're trying to integrate that into heartlands culture. So how is that going? What, what lessons have you learned about that? Well, we learned a normous amount, you know. First of all, I think we learned all the different mistakes we made. Now or work two and a half years into that right and and I have to say so, I'm not really proud of us. We have about ten percent of the associates on that team that were there when we bought the bank. And what we found, though, is that, you know, of course we gave all those folks a chance, but we are a high performing organization. Where were, where it's a it's an adventure, not a job, and so we expect people to work at a very high level and we the organization that we purchased was kind of set in its ways. They were kind of a one trick pony, really focused on mortgage lending. They were experts at mortgage lending. But whenever we decided to put in commercial and and selling checking accounts and home equity lines of credit and credit cards and all these other financial instruments and and and, that just wasn't for everybody. And then the clip that we run wasn't for everybody. So some folks, you know, it's a it's a job, not an adventure, and those folks don't really last very long in our in our space, because it is an adventure, not a job, and it's a there's a big difference between two. Yeah, and and by the way, a comment that I used quite frequently with clients is that your culture should be toxic to somebody who shouldn't be there. That's correct and I think that's really what you're trying to do, is make your culture strong enough that somebody will opt out so you don't you don't have to go through the problem. Here's well, here's here's something that you this going to shock some of the listeners. Okay, I this is how I say it. Inside the bank, we're going to find the internal terrorists and we're going to find fire them. Yeah, okay, so their internal terrorists. These are people that are standing around the Watercooler Gossiping about this or that, stirring up crap. They're walking in your office. Shove the door and want to talk about somebody. Cultures don't need that, you know. Everybody needs to be comfortable enough to open the door. Work in a wide open environment, share exactly what they're doing and how they're feeling, and and and the rules are that that's okay, right, and that everybody is allowed to have their own opinion, and and and we just have to trust in the fact that that everyone is looking out for everyone else's best interest, you know. But that's a unspoken rule at the bank that you know, look, if you're if you're a troublemaker, your days are numbered. You know, you better get on board or just, you know, get off. Better Find Simpla sales where you can be happy and not have to be had. Had that kind of behavior attitude. That's correct. I know this is probably a sticky wicket, as they refer to difficult topics, because there's what you probably legally can do. But but I'm curious about the when you're doing business to business transactions, where...

...you've got a business that wants to do business with you and, let's say it's alone, do you pay it all to attention to the culture of that company all, for sure? Yeah, I mean, you know, credit is all about the FATO and banking is about the five seas of credit, okay, and those five sees are character collateral, capacity conditions and Geez, what does a five see? I might character. But I'd tell you the character really matters because you know, frankly, if you have quality characters, that means that they're if they have a problem, for instance, they're going to tell you the truth. If they have a strong culture, that means so when times get tough, people don't leave, they strap, they pull their boots up and they say, okay, we're not this is going to sink us. Who we're going to do something different. Yeah, and so the culture totally matters when we're looking at that. Now it all loan officers that we have actually put a lot of time and effort. That's like a whole paragraph, and every loan right up, we do really oh yeah, they tell us all about the company. WHO own the company? If they if the employees own the company? WHO has skin in the game, if they're a second, third, fourth generation? All those things matter when we're trying to see if we can be a good partner to a business. So if I wasn't planning on going down this path, but you're leading me there, so I'm just going to I'm just going to follow it. I get the impression, then, that if I'm doing business with a large multinational bank like a bank of America or chase. That the the culture component, the character component, is probably not as much a part of their decision about whether they're going to do business with your not. They're going to look at the basically the numbers, and that's going to drive more their decisionmaking, whereas with a heartlet a community bank, that's not the case. Am I write about that, but you're exactly right. Now that's The v C is character, and so I tell you that you're exactly right. The people that make decisions in bid banks don't even have a window. Okay, they sit in cubicles and wherever they're at, they might be working remotely now, right. They've never met the customer, they've never seen the factory or the business. They you know, they are the ones that are looking at it as far as the average portfolio, you know, performance based on their other customers. So where does this fit in the and where everybody else is, you know, right and then, and big banks, frankly, they manage their their balance sheets by, you know, by portfolios of customers. So let's say they want to get out of construction. They're getting out of construction and it doesn't matter whether you paid. Is agreed or not. There they want you out. You know, that's just the way it is. Yeah, it's a it's a basically a risk of port across their portfolio that they really want, isn't it to that is it's they can't possibly know all their customers. Yeah, they're so large that it's said personal and they just can't. They just can't operate that way. Community banks are much different. You know, I spend most of my time working with customers that are either in really great prosperity and they're trying to figure out how they control the prosperity, or they're on rough times and they need to find out how to rerejuster balance sheet or reinvent their company for survival for the future. Every CEO I've known, or every owner of a business I've known, has had what I would call into caters of how they feel the culture of their company has been behaving. It might be an individual. They'll judge whether or not things are going well based upon how she or he acts. Sometimes it will be at external it'll be a customer, or certain customers are the best indicators about, you know, how the company is performing from a cultural standpoint. Do you have do you have such a an informal way of judging whether or not your culture is on the rails are off? Well, well, it's formal and informal. I guess...

...we have a couple of different mechanisms. One we have a process called straight to the top, which is a an online and we also have an in person form that if somebody wants to send the comment directly to my desk, put it under my nose. They fill that out and it gets to me immediately and I usually respond to those emails if I'm able within a couple of minutes to say I've got this, I've you know, either it has merit or let me work on it, or something of that nature. So that's one way that my people know that I am going to be listening. So if someone they it's not like they're going to have an issue and the CEO may not find out about it right so they can't we can't hide from that. The other thing we do is we do a I do what's called CEO road show and I go on I go and see every single associate and I look I'm in the eye and I visit with them for about an hour and we do it in groups, based on teams, and I have no agenda but to have a conversation with them and I listen to what they have to say and again I'm disruptive because if they tell me lot of Scott, why we got to do this, I had this instance. This just doesn't make any sense. Sometimes will make decisions right there at the table. Guess what, you don't have to do that or changing that right now, or I'll suggest that they send that into our quality committee that's represented by all the angles of the company. That again, we can reward great ideas, we can identify riffs between departments and we can really kind of get to the nitty gritty and solve issues. How did you come up with the idea of doing them a CEO roadshow? What was the genesis of that? Well, the thing is I grew up in the guts of the bank. Like my first job at the bank when my father started it, I was the janitor. So I've done every job here that you can do and I have respect for all of our frontline people because it's the hardest job in the bank, being a customer service representative in a branch office, for instance. That's the hardest job in the bank. You're on all the time. You don't know who's going to walk through the door. Sometimes people walk through the door with a gun, you know, I mean, you just don't know. And so the way I got to that was the bank was growing so rapidly that I was losing touch with my people and so a lot of times, you know, companies treat their CEEO like a mushroom. You know, they feed them bullshit, keep them in the dark, right, and that's what mushrooms do, right. I didn't feel comfortable because I didn't have a good sense for what my people were feeling. And so it takes me a lot of time, like I have thirty seven individual meetings by the time I make it around the Horn and takes me three and a half months to do it and takes a lot of time, but you know what, it's one of the best things that I do. It's a great way to make sure that we're the people are understanding what we're all about. They feel connected to me and to the culture of the organization and know that, you know, it's not just a bunch of milarchy. We really mean what we say. Yeah, do you ever have any of your direct reports or people in the hierarchy from a management point of view that are uncomfortable that you are circumventing the chain of command when you do this. Yeah, they have. They're no longer here. Good answer. I love it, Scott. I think my audience, most of them, if not all of them, are smiling right now, but they say that. So basically, that's going to be a problem for you as a manager. You should probably be working here. That's a simple a the this is not the place for you if you don't only talking your people. I reserve that right. I don't run the bank that way. I want to run it by committee. I want to let everybody, you know, do their job and make their decisions and all. I rarely do I trump people, but I do reserve the right of veto and I will step in if I need to as a CEO and and you know it cost me my job, then so be it. But I'm charged by the board of directors to make sure that we're set up to do business and continue on as try to run the bank with that type of authority. He's Scott mccomb. He's the CEO of Hartland Bank. It's Goott, one of the constants that we have in this podcast. As I challenge our guest, in this case yourself, to give our list there's one thing that you would say, if you...

...don't do anything else, to have a high performance culture. What would be this one thing that you would ask our listeners to do or suggested them that this is that important that we're only going to do one thing. Makes you sure that you do this one thing? What would it be? The one thing I would say is make yourself as vulnerable to your people as you possibly can. He succinct. I love it. He gets to the point about as quick as anybody and that's why I love having him as a guest. Scott, if people have questions, they want to reach out to you, what's the best way for them to connect with you? You know, the best way to connect with me is to go to heartland dot bank as our website and my email address is Scott Dot macombe at heartland dot bank. Great, it's a pleasure, Scott. I told you we run out of time before we run out of questions, but in fairness to the audience, we try to make sure we do this under thirty minutes so we get the meat. If we will out as quickly as possible to them. You've done a great job and once again you've exceeded my expectations. Thanks for joining us and thanks very much. And then all your listeners. You know I'm a product of the apple experience. So Ed was one of my instructors. Tommy had to sell and had a do sales management back in the day and I'm forever grateful. So, and thanks very much. I'm glad to be here. Call on me anytime. You're a kind man. I appreciate it's got a continued success to you and the heartland organization. Thanks a bunch and making a great day. Thank you for listening to the ED apple experience. Were more information on building a more sustainable, smarter and healthier business. visit www the eply groupcom for resources, tips and ED's latest blocks. That's the eply Eppley Groupcom. Plus, take a free assessment at the eply groupcom slash assessment to find out how you measure up as a highly skilled and accomplished manager and where to focus on improving your skills.

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