Are Your Lenders “Completely Typical and Unmemorable?”

 

The following is part one of three for a series of posts that will help you develop a clear and unique “message strategy” for every sales call.  By utilizing the following tools and prompts, your sales calls will make a stronger connection with your customer and therefore be more effective.

The messaging and positioning strategies I’ll be discussing are very advanced sales strategies.  Few commercial lenders even know about them, let alone know how to utilize them.  They are without a doubt incredibly useful in helping you differentiate yourself from your competitors.  The reality is advertisers have been using these highly effective messaging and positioning techniques and strategies for decades to sell billions of dollars’ worth of products and services.

Why it is important to have a strong message.

Approximately a decade ago, I was in Line A (remember Southwest’s old boarding system?).  I was chatting with a very smartly dressed business woman. We discussed business and when I told her of my new client, she replied, “Interesting. I had a couple of their lenders come out and meet with me a few months back.  Then again, I’ve been contacted by at the lenders from five different banks in the last six months.”

Intrigued, I asked her, “So, what was your experience meeting with these lenders?”  To which she replied, “The experience was completely typical and unmemorable.”  Then she added, “Don’t get me wrong, they were nice, knowledgeable friendly bankers.”

OUCH!  “Completely typical and unmemorable.”  Sometimes the truth hurts.  It is common for most sales people in any industry to make similar claims and statements when speaking to customers, but all the more reason for you to develop a strong message that will break through this monotony and make yourself memorable.  

19Messaging Rule #1: Differentiation Occurs By Behaving and Communicating Differently

Most every banker touts their bank’s customer service, responsiveness, and competitive rates as differentiators.  The problem is, so does every other banker, which only further commoditizes an already commoditized industry.  The first step you can take in the journey of learning how to message customers effectively is to become aware of the fact that much of what you’re saying to customers at the present time isn’t helping you differentiate yourself…it is actually hurting you!

We have some bank clients who developed almost story-like presentations about their bank.  These stories include statements such as “we’re family owned” or “we’ve been around for over 100 years” and the assumption is that these statements matter or are meaningful to the customer.  Notice I said the assumption is that the message is meaningful to or resonates with the recipient.  Now, if you’re calling on the owner of a family run business, stating that your bank is family-owned will very likely “resonate” with the prospect and position you favorably.  Likewise, if you’re calling on a company that has been in existence for over 100 years, stating your bank has been in existence for over 100 years will likely also position your favorably.  In these scenarios, the “messaging strategies” will likely be on point.  But to use that message with any other prospect other than the owner of a family run business or a 100 year old company, the message will likely have no value because it doesn’t resonate.  Said another way, the statement is just more noise in an already noisy market!  It’s the wrong messaging strategy for THAT prospect.  The lender’s positioning strategy was not aligned with the recipient of the message.

Since we’re not selling to robots, why would we think that by making the same claims and representations over and over and over to individuals would be an effective way to position ourselves as unique?   Why would we wing-it and make all sorts of assumptions about what will resonate to a prospect?  Lisa and I call this “pin-the-tail-on-the-donkey” customer messaging for obvious reasons. Are you ready to take the blindfold off?

20Messaging Rule #2:  You Never Get A Second Chance To Make A First Impression

Messaging customers effectively is both an art and a science.  It’s crucial to do it effectively, especially on an initial prospect call (your first in-person sales call) because it only takes a few minutes before a prospect forms an impression about you and your bank.  We’ve all heard the adage, “you never get a second chance to form a first impression.”   This couldn’t be more true than on an initial sales call.

To learn how to message customers effectively, we first must learn, understand and begin to utilize certain terminology:

Positioning – “Positioning” is a term and powerful strategy born out of the advertising industry. The definition and intent behind positioning is:

  • To make a positive and distinctive first impression based upon saying or doing things differently from how your competitors communicate or behave on an initial prospect call.
  • A marketing and communication strategy that aims to make a brand occupy a distinct position in a market, and in the mind of the customer relative to competing brands.
  • How you differentiate your product or service from that of your competitors and then determine which market niche to fill. Positioning helps establish your product’s or service’s identity within the eyes of the customer.
  • Positioning defines where your product or service stands in relation to others offering similar products and services in the marketplace.

Good positioning makes a product unique, forms an emotional connection with the customer literally within 30 seconds to a couple minutes of first contact with the prospect.  Good positioning also makes prospective customers strongly consider doing business with your company as a distinct benefit to them.  In a cluttered and noisy marketplace with lots of products and brands offering similar benefits, effective positioning:

  • Makes a brand or product stand out from the competition
  • Helps a company command higher pricing
  • Creates an emotional bond between a company and its customers
  • Creates affinity or attraction which helps draw customers to a particular company
  • Allows a product and its company to ride out bad times more easily

Well-known brands with effective customer messaging strategies:

Screen Shot 2017-02-16 at 1.27.33 PM

As it relates to messaging customers, it is critical to understand that a company’s positioning strategy is to design messages that will resonate and be interesting to a specific demographic of the market.  Said another way, a company’s messages are designed to attract the attention of the company’s ideal customer.

Action Item:

In preparation for my next blog, I want you to consider the following questions:

  1. Who are the ideal customers for the five companies identified above and what is their customer messaging strategy?
  2. What is the intent of your current messaging strategy?  
  3. Who is your ideal customer?
  4. Do you find yourself describing the bank in nearly identical ways to different people?
  5. Look at your bank’s website.  What message are customers receiving and is it distinctive?  (Look at your competitors’ sites to find out.)

For part 2 of our Effective Message Development series, we will address:

  • How to create affinity (an attractive force) that causes customers to want to do business with you
  • How to do research prior to a sales call that helps you design a customer messaging strategy
  • How to develop a customer messaging strategy that is unique for every sales call

Ray Adler

Ray Adler
CEO & President
BTI Growth Advisors, Inc.
760-720-9270
BtiGrowthAdvisors.com
SalesHoningAcademy.com

Your 30 Year Old Marketing Practices

Your Car Isn’t Thirty Years Old, Why Are Your Lenders Utilizing Marketing Strategies That Are?

4It’s probably a safe bet that the car you’re currently driving wasn’t made in 1987.  In the past 30 years, cars have improved a lot.  Fuel efficiency, emission reduction, technological advancements and safety features have improved dramatically.

However, when it comes to how lenders market and sell bank products and services, there has been little if any change over the past thirty years.  Let’s examine various trends that support the need for banks and lenders to evolve their thinking and strategies as it relates to marketing.

#1.  Technology Continues to Devalue the Role of the Sales Person

It’s like this in every highly commoditized industry.  Customers have grown very comfortable doing their own product and company research and making their own buying decision without the need for interacting with a sales person.  Cars, appliances, furniture, insurance policies and thousands of other commodity products can be purchased from the convenience of our homes.  And with services like Amazon Prime, your purchases arrive often within 18 to 24 hours.  The cold hard fact is that the internet, massive advancements in data mining, credit scoring and loan processing technologies continues to devalue the role of sales people.  Simply said, lenders like branches are becoming obsolete.

5Now, we’re not saying that there won’t be a role for lenders in the future of banking.  But we are saying that if steps aren’t taken adjust to this trend, customers will continue to favor pricing as the primary differentiator when all other factors are similar.  Part of the solution to combat this trend is to take steps to increase the value your lenders are able to deliver to customers by increasing their knowledge and expertise.  Lenders must become more knowledgeable on a much broader array of subjects beyond lending.  Developing niche industry expertise is one powerful way to raise the value you’re able to provide your customers as well as improve their ability to differentiate themselves from your competitors.

#2.  Your Competitors Are No Longer Just Banks

Online lending platforms are growing rapidly and gobbling market share at a feverish clip.  Your competitors are no longer the other 15 to 20 banks in your market.  Recent research documents that C&I lending tanked from a 9.0% annual rate in Q2 of 2016 to only 3.5% in Q3.  While the pending election likely played a factor is that decrease, the fact remains that nonbank lending sources are capturing your market share at an alarming rate.  These online lending platforms are growing in their sophistication as well as increasing the loan size they’re able to facilitate.

6To provide a bit more context to this issue, eCommerce has been steadily growing over the past five years. Total transaction volume hit $327 billion in 2016, up from $202 billion in 2011. More brick-and-mortar-focused retailers are stepping up their online game and increasing the percentage of their sales that come from online channels, and Web-only retailers have been growing at an impressive clip, too.  Retailers have spent these years honing the shopping experience on their websites. But just when they thought they knew their consumers, things are changing again.

One of the biggest impediments to changing and evolving with the times is the herd mentality or “group think” that exists in companies.  As an industry we must place a high value on and encourage divergent and disruptive ideas.  Senior executives who have been in banking thirty and forty years must tap into the insights that younger bank employees have to offer.  When was the last time your bank conducted an employee engagement survey or any type of survey?  It’s short-sighted to believe that financial performance means your bank is running smoothly.  Employees are an incredible untapped resource that can help your bank evolve and improve in order to stay relevant and competitive.  The ability to embrace change is giving certain banks a true competitive advantage.  The inability to change or to be in denial about the need to change is becoming more and more risky.  

#3 Not Changing Is Riskier Than Changing

7The rise of social media is shaking up things in surprising ways across the board. The emergence of mobile as a major shopping channel is putting new power into consumers’ hands. Customers expect to use all channels as though they are a single experience, requiring tight integration across those channels. And big data now makes it possible to gain deeper insight into consumers more than has ever before.  Other industries such as airlines, hospitality and retailers have been utilizing big data to drive tailored product and service offerings and revenues for over twenty years.  With few exceptions, the banking industry has only recently (within the last five years) started venturing into the world of big data and data mining.  Regional, business and community banks must explore these new technologies as they represent significant cost and time savings which translates into faster response times.

What does this mean for banks? Everything. It means the competition, which has already been fierce, won’t get any easier. It means there’s a huge opportunity to capture new market share—and a substantial risk of losing customers and market share to banks who can’t execute effective strategies that address social, mobile, and big data in addition to increasing the value proposition offered to business owners and corporate decision makers .

8#4. Changing Business-to-Business (B2B) Sales Trends

The era of selling in which we’ve long operated is dying. Significant shifts in the business-to-business (B2B) buying process have transformed selling as we know it. No longer will the “jack-of-all, master-of-none” shotgun marketing approach and a bloated database of COIs be enough for lenders to succeed.  One of your weightiest responsibilities as CEO, President or EVP of Commercial or Branch banking will be not only planning for the future but also anticipating it. 

The following are a couple of the sales trends affecting B2B sales.  Your bank and lenders need to understand these and begin to implement new strategies if you intend to remain competitive in the next three to five years:

  • Decision Makers Want More.  Competitive rates, responsiveness and excellent customer service used to provide companies with a competitive advantage.  That’s no longer the case.  These attributes are now a given and the bare minimum to compete.  Touting these to prospects no longer differentiates you from your competitors, it commoditizes you.  Your lenders must say and do things differently going forward if you hope to set your bank apart from your competitors.  Simply said, business owners and corporate decision makers are starting to look for “authorities” and “specialists” to provide a higher caliber of advisory services beyond the ability to facilitate a loan transaction.  The value proposition of the “generalist” is declining quickly.  Having a little knowledge on many different industries insures you’re positioned as a commodity.
  • It’s Only Getting Tougher To Get In Front of Decision Makers  If your lenders are having difficulty gaining access to decision-makers now, beware. It’s only going to get tougher to gain access to these key people in the foreseeable future. Time constraints mean prospects and customers are showing less interest in attending traditional face-to-face meetings with lenders. In addition, the buying process at many organizations is being standardized through the use of requests for proposals (RFPs) virtually making a “personal relationship” with key executives nearly impossible.  Customers are also increasingly choosing to use technology to manage purchase transactions rather than working with sales people directly. In fact, Gartner estimates that by 2020, customers will manage 85 percent of their purchasing transactions without talking to a human. 

Lenders will have to utilize new and unique ways to get their name in front of decision makers while positioning themselves as an authority.  Those opportunities do exist through writing articles, giving presentations and by raising your visibility and authority in market niches that play to the individual strengths of each lender.

The world of banking and sales does not change in a vacuum. There are signs of this change all around us.  Astute bank executives decipher these signs and adapt instead of clinging to what worked in the past but will no longer be successful in the future.  

Banks can no longer afford to rely primarily on the traditional COI referrals from real estate brokers, CPAs, insurance brokers and attorney for deal flow as they have for the past thirty years.  Telling customers your customer service is what sets you apart as most banks websites still tout only serves to commoditize your bank and the industry.  Ten years ago the claim was effective, today it’s just noise.

Extinction is what happens when an organism, organization or industry clings to what worked in the past beyond the point of needing to adapt. Many companies in every industry will face extinction over the next five years, but those that adapt will thrive in this new and evolving business and sales environment.

Ray Adler and his partner Lisa Bashor are transformational leaders in the banking industry.  With over 17 years and over 100 banks as clients, Ray and Lisa bring deep industry experience and valuable insights that help banks leaders, managers and employees adapt and break from tradition marketing and sales strategies.  The #1 reason banks engage Ray and Lisa is to help them develop and implement strategic, choreographed out-bound marketing and sales programs that work in conjunction with and greatly enhance a bank’s existing in-bound marketing efforts.

To learn about developing an out-bound marketing and sales program in your bank, contact Ray Adler at 760-720-9270 or email at ray@btigrowthadvisors.com

Ray Adler

Ray Adler
CEO & President
BTI Growth Advisors, Inc.
760-720-9270
BtiGrowthAdvisors.com
SalesHoningAcademy.com

What If CPAs and Real Estate Brokers Stopped Referring Deals To Your Lenders?

What Would Happen To The Growth of Your Bank If Real Estate Brokers and CPAs Stopped Feeding Your Lenders Deals?

7After 17 years and over 100 banks as clients, my partner Lisa and I continue to review dozens and dozens of lender marketing plans every year.  95% of these marketing plans have a section in them that reads as follows:

Referral Sources

Focus on those who can refer quality deals such as:

  • CPAs (With a few names listed)
  • Real Estate Brokers (With a few more names listed)
  • Attorneys (More names listed)
  • Insurance Brokers (More Names Listed)

Now, there is absolutely nothing wrong with cultivating referrals sources.  We all like referrals.  The problem is lenders have become too reliant on the actions of others for deal flow.  Furthermore, the business development strategies utilized by your lenders earlier in their careers to develop new business have gotten dull and in-effective.  This one factor, being overly reliant on third party referral sources, is one of the biggest (but not the only) reasons approximately 50% of all lenders fail to hit their annual sales goals.

Fantastic!  Your In-bound Marketing Efforts are Working…Sort Of!

“In-bound” marketing efforts are defined as the opportunities your network feeds you.  The deal flow from traditional COIs is the by-product of developing relationships with professional colleagues in your market.

We’ve worked with and coached many savvy lenders who have cultivated extraordinary relationships with extremely well-connected centers of influence (COIs).  These lenders are the envy of all the other lenders in your bank because of the quality and quantity of deal flow that their COIs provide.  These lenders produce, $15M to $20M or more like clockwork every year and the bulk of those deals usually come from four or five high profile, well-connected COIs.  These lenders should be congratulated because they have done a fantastic job identifying and developing mutually satisfying relationships with quality professionals who have a client base that matches well with their bank’s credit appetite and ideal customer profile.  This didn’t just happen.  It was developed over years.

The problem is this isn’t the way it works for most lenders.  For the majority of lenders, their “COIs” are a collection of professional colleagues and acquaintances most of whom have very diverse clientele.  Every lender has a few high quality COIs and then a number of COIs that are less ideal.  Because of that, the referrals these COIs provide are also a hodge-podge array of opportunities.  The consequences of having to sift through this mixed bag of referrals include:

  • Wasted time and energy meeting with poor quality prospects
  • Wasted internal resources when lenders work on, spread and submit marginal deals
  • Working on deals that are too small or are marginally profitable
  • Frustration when our efforts don’t convert to closed deals
  • Embarrassment of having  to turn down the prospect and then, having to tell your COI of the news
  • Not hitting sales goals as a result of investing too much time on low to poor quality prospects
  • Not receiving an annual bonus because of poor production

But What About Your Out-bound Marketing Efforts?

5“Out-bound” marketing efforts are defined as the new business opportunities your lenders create directly with the owners and senior executives of targeted companies in your market.

The majority of banks that we’ve worked with over the past 17 years have utilized varying types of out-bound marketing such as being an event sponsor, sponsoring a booth at an industry trade show or annual conference or advertising in a trade publication.  But that’s usually where most of a bank’s out-bound marketing efforts end.  There exists no choreographed, highly focused out-bound marketing where the bank’s marketing efforts and the sales efforts of lenders are working in unison to build market share.

This isn’t a discussion of good or bad, meaning referrals are bad and creating your own new business opportunities is good.  This is a discussion of how to make your bank’s out-bound business development efforts more productive, strategic and focused.

The business landscape continues to change, yet lenders continue to approach today’s rapidly evolving market with business development and sales strategies used for the past twenty to thirty years.  Most of us are not driving a car built in 1987 because technology and safety features have advanced significantly in the past thirty years.  Why as an industry would we rely so heavily on the outdated sales approached utilized well over thirty years ago?

How Does A Lender Produce $3.5M in 2015 and $10.5M By July 2016?

This is just one of dozens of real life examples where we’ve helped lenders become much more productive.  This is what can happen when a lender learns how to work smart, “play to their strengths” and apply more contemporary marketing and differentiation strategies.  Working harder gets you incremental productivity gains.  Working smarter gets you exponential gains in productivity.  Gains in productivity aren’t difficult to achieve provided you look at your market and your sales efforts with a different set of lenses.  There is nothing more valuable than the value of a “fresh perspective” to create viable new opportunities.

The biggest impediment to helping lenders and sales managers become more productive is their outdated thinking.  Nearly every lender in every State targets real estate brokers and CPAs as their primary source of deal flow.  How unoriginal!  The second impediment to improving lender productivity are senior executives don’t see the value in developing the single biggest asset any company has…its employees.  Talk about outdated thinking given today’s war for talent.  Your employees and the manner in which they advise your customers is the only thing that differentiates your bank from the twenty five other banks competing in your market.  

Ready to Hone Your Out-Bound Business Development Efforts?

For 17 years, Lisa and I have been dedicated to rebuilding the reputation of the banking industry, one banker at a time and one conversation at a time.  We enjoy sharing contemporary ideas, resources and tools that are consistent with today’s help bankers to perform better.

Help your lenders get a strong start by [wp_colorbox_media url=”#inline_content” type=”inline” hyperlink=”downloading my newest ebook”], Taking An Evolutionary Approach To Lender Marketing Plans – Leading Edge Strategies For Sharpening Lender Production.

It’s only 16 pages, but packed with modern insights, exercises and fresh perspectives designed to help lenders and their sales managers to work smarter and to learn how to become more productive.

If you’d like to discuss your bank’s current out-bound marketing efforts, please call me at 760-720-9270 or email me at ray@btigrowthadvisors.com

Lisa and I wish you much success in 2017!

Happy New Year!

Ray Adler

Ray Adler
CEO & President
BTI Growth Advisors, Inc.
760-720-9270
BtiGrowthAdvisors.com
SalesHoningAcademy.com

 

The Most Undisciplined Sales People On The Planet

Did you know that relationship managers are the most undisciplined, unfocused sales people on the planet?  It’s true! 

Before choosing to work exclusively with banks 17 years ago, I trained, coached and mentored  sales teams in many different industries including insurance, financial planning, pharmaceutical, professional services, automotive, healthcare, start-ups, manufacturing just to name a few.

Granted, sales people in many industries, by their very nature tend to shoot-from-the-hip.  I’ll give you that.  I’ve seen it over and over again.  Their focus is purely on “puttin’ up numbers.”  Cold-calling, smiling and dialing, you name it but they’re always racing through their days, weeks and months looking for deals.  The truth is, a high percentage of sales people are undisciplined and unfocused.  No wonder only five out of ten sales people in this country hit their annual sales goals.

What Caused Bankers To Become Undisciplined Sales Professionals?

There are two fundamental reasons bankers have become undisciplined in their sales efforts:

  1. Abundance of Demand – The demand for all forms of real estate credit increased year over year for 15 years in a row.  From 1993 to the depression in 2008, every year the demand for real estate credit increased.  From 2002 to 2007, the demand exploded with 50% per year hyper-growth.  When demand increases year over year for 15 years, then explodes for five years, a relationship manager doesn’t need focus, discipline, or a strategy to be successful.  Portfolio growth was easy.  You and your bank needed a good reputation and you had to be able to deliver what you promised while providing good service.  But 15 years of an ever improving tailwind enabled a large percentage of lenders to be successful…without focus, strategy or discipline.  However, we are in a very different market cycle and the business development and sales weaknesses of lenders and relationship managers is now highly exposed.
  2. Banks Have Invested Very Little In Training – The “Big Banks” used to be the universities of the industry 20 years ago.  The big banks made massive investments in training and developing employees at all levels for decades.  Leadership, management, supervisory, sales, customer service, team building and communication training in addition to all of the technical and job specific training were delivered annually to help bank employees become competent, worthy of promotions and to stay sharp. For decades, regional, business and community banks have reaped the benefits of employing relationship and branch managers trained by larger institutions.  Can you imagine the ROI on that?  The problem is the industry has reinvested very little of its profits back into creating smarter bankers and honing their sales skills…and it shows!

If you look at the trends impacting the banking industry, one can’t deny that the banker is quickly becoming an unnecessary component in the attainment of a commercial loan.  Given the two points discussed above…combined with the growth of online lending platforms, the banker continues to be devalued in the sales process.  If the only value a bank and its lenders can deliver to the market is the ability to underwrite and close a loan, technology can facilitate the same transaction at a fraction of the cost and in a fraction of the time.  What is an industry supposed to do when faced with a declining value proposition?

For the past seventeen years, we have worked hard to rebuild the reputation of the industry one banker at a time.  We have also bucked the many external and self-induced trends that have continued to devalue the role of the banker in the sales process.  The only way to fight these trends that continue to commoditize banking is to increase the value of the banker in the sales transaction and hone their sales strategies and skills.  Today’s banker has to become an authority in something other than banking, more well-rounded, more specialized, and better able to differentiate themselves from their competitors.

In short, today’s banker must become more focused, more disciplined and more strategic…about every aspect of the business development and sales processes.  The same level of discipline banks strive for in their credit decisions must be similarly be applied to their sales efforts.  The days of “winging-it” and being successful are long gone.  Using the same tired, old strategies to find new business opportunities as have been used for the past three decades by every other banker is not a recipe for success going forward.  We strongly believe in the future of banking and the role of the banker as an integral part of the sales process.  But we believe that to survive, bankers are going to have to be open to learning fresh ideas and new ways of thinking about and conducting the business of banking.

Learn Why More of Your Lenders Don’t Meet Their Annual Sales Goals

So let’s jump in and get to the heart of why more lenders don’t meet or exceed their annual sales goals. 

The #1 Reason

The #1 reason a substantial percentage of your lenders don’t hit their sales goals is because they are overly reliant on third party referrals as the primary source of their deal flow.  Said another way, they are too dependent on the actions of others for their new business opportunities.  In any given year, if the quality and quantity of referrals is good, a lender likely will hit or come close to hitting their annual goals.  If the flow or quality of referrals isn’t good that year, a lender likely will fall well short of their sales goals.  At the end of the day, luck more than anything else often is the determining factor in sales goal attainment.  Why would any lender WANT to rely on “luck” and the actions of others for something as important as hitting or exceeding their annual sales goal?  That makes no sense!

Now, there are a minority of lenders who have established great relationships with great referrals sources.  These relationships have been established over decades with referral sources that have a considerable transaction volume.  And for these lenders, every year they get plopped into a steady stream of high quality deals and as a result, meet or exceed their annual sales goals.  These lenders are the envy of every other lender in the bank and why wouldn’t they be?  They didn’t have to invest the months and years “developing a relationship” with the company owner or executive.  They didn’t have to establish their credibility or expertise with the company owner because they established that credibility and expertise with the referral source. As a result, the lender is able to leverage the relationship and credibility of the referral source and literally is dropped into an already underway transaction.  And hear me, this is great!!! 

But the scenario I described isn’t what a majority of lenders experience and it is the fundamental “strategy” most every lenders and relationship banker utilizes to source new deals.  By and large, the referrals that lenders solicit come from two primary sources, commercial real estate brokers and CPAs.  Certainly existing customers, attorneys and the occasional insurance broker provide lenders with referrals on occasion.  However, the majority of referrals come from commercial real estate brokers and CPAs and every banker is soliciting the same brokers and CPAs for referrals.

The Consequences of Being Too Dependent

#1. No Control – Let’s start with the obvious.  Your annual production rests in large part on the efforts of others, your referral sources.  That should make you very uncomfortable because you have little if any control over your destiny. 

#2. Poor Quality – You have little control over the quality of referrals you receive.  How many dozens of times were you delighted to receive a referral from a referral source only to find out upon meeting with the company owner, they were un-bankable?  Or maybe worse, you got their financials, found that they were “marginal” but because your pipeline was lite, you presented the credit and the deal was turned down.  So not only did you waste three plus hours driving and meeting with the prospect, you wasted another six to ten hours of the bank’s resources spreading financials and having the deal worked on by your underwriters.  Now imagine the drain on bank resources every week when lenders are working on low quality, marginal deals.

#3. Stiff Competition – Not that this happens all the time, but a lot of the time a lender is being referred into a deal that is being “shopped” where other institutions are also bidding on the deal.  This happens frequently with real estate deals.  Good news, you get a shot at a new piece of business.  Bad news, you’re going to give up net interest and non-interest income.

#4.   Margin Pressure – There are trade-offs for not having to invest the time necessary to develop and source your own deals and the trade-off is a loss of net and non-interest income.  Bidding wars create margin pressure pure and simple.

#5. Limited Differentiation – Because no time was spent developing a relationship with the lender and your bank, no loyalty or “relationship capital” was created.  Because you leveraged the relationship of your referral source, there was little if any time for you to get to know the vision, goals, and challenges of the customer.  The by-product of being “dropped-into” an existing transaction is that you positioned yourself as a commodity.  You had no time to differentiate yourself or your bank or to add value and because of that, typically pricing is the primary way we differentiate one supplier from another when all things are equal.

I’m going to reiterate what I said previously; there is nothing wrong or inherently bad about soliciting referrals from real estate brokers and CPAs as a strategy.  However, there are many other highly effective and newer ways to “attract” high quality new business.  AND, there are so many simple strategies lenders and relationship bankers can use to hone the quality of referrals they receive from their existing referral sources.    

success2Is Your Bank Ready To Hone Your Sales Strategies and Processes?

The only reason more of your lenders and relationship bankers aren’t meeting or exceeding their annual sales goals is their business development and sales strategies need honing!  You have good people, smart people!  They have the knowledge and experience, however, they’re using the same, tired one or two strategies to pursue business that every other banker is using.  The entire psychology of selling has changed as a result of the internet and social media.  Your lenders and relationship bankers haven’t changed…in two or three decades and that’s why more of them aren’t meeting or exceeding their annual sales goals. 

This could change…

“By implementing the tools and coaching provided by Ray and Lisa, I have hit my annual sales goals by July with a disciplined strategy of working smarter, not harder.”

Kyle C. Maguire
Vice President & Relationship Manager
American Business Bank

Here’s to your sales honing success!

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Your Competitor’s Marketing Plans Revealed!

Your Competitor’s Marketing Plans Revealed!

What if…

A healthy percentage of your lenders exceeded their annual production goals…by June 30th?

What if…

A healthy percentage of your lenders produced more than twice their annual sales goals annually without working any harder then they currently are working?

We’re not surprised by these results.  They are quite common for our clients.  We’re talking documented results! 

We’re accustom to seeing a $4M to $5M annual producer produce $8M to $10M with the same or less effort as it took to produce $5M.  We’ve watched $10M to $17M annual producers produce $25M, $30M or more with the same amount of energy as it took to produce $10M. 

They’ve doubled their production without working longer hours.

Here’s the honest truth, the sales activities of the majority of lenders are inefficient and moderately effective.  Your lenders are simply working way too hard for what they produce. 

And the problem isn’t interest rates, competition, or market conditions…it’s your lender’s outdated and antiquated marketing and sales approaches that are the problem!  They’ve been marketing bank products and services in exactly the same way for the past two to three decades.    

It’s that simple…and good news…it’s not that difficult, time consuming or costly to correct.  The cost of the solution is pennies in comparison to the cost “under-performing” lenders have on bank profits.  Yes, your “A-players” are under-performing. 

Your Competitor’s Marketing Plans Revealed!

In my last blog, I promised I would show you the exact marketing plan your competitors are using to source new business.  How valuable would that be?  Incredibly valuable.

For over 16 years, my partner Lisa and I have been modernizing and honing the sales strategies of commercial lenders and affecting positive cultural change by helping their banks become more market driven.

As you can imagine, we’ve witnessed first-hand, how thousands of commercial lenders across the country market, sell and speak about their bank’s products and services.  Before I share your competitor’s marketing plan, I want to share six of the more striking marketing similarities among commercial lenders in every State:

  1. They tend to be generalists – Most lenders know a little bit about a lot of different industries.  The old “jack of all trades…master of none” adage applies.  As a result, the “value-add” a lender brings to a prospective customer is greatly limited.  The typical lender’s marketing approach is “shallow and wide” as opposed to “narrow and deep” and accordingly they’ve positioned themselves as a commodity.  Now in rural and smaller markets, a narrow and deep marketing approach isn’t as feasible.  In those instances, differentiation can be created by a marketing approach that is more of a blended strategy we define as “narrower and deeper.”
  2. They sound alike – Lenders in every state use the same jargon, acronyms and buzz-words and make the same representations to prospects and customers as their competitors.  There are a ton of banks and bankers who still believe talking about their customer service makes them distinctive.  Take look at your own website and see if this is true about your bank.  As a result, your lenders sound like “talking brochures” when talking to prospects and customers and your bank has no discernable uniqueness.  And because of bullet #1 above, most lenders do little to tailor their conversations to their audience or to develop questions that are specific to the customer’s industry.  This results in further commoditization.
  3. They sell alike – 80% of lenders actually manage the sales process in exactly the same way as their competitors.  They behave the same way too.  The approach is very transaction-oriented and financial-package focused.  As a result, customer expectations of banks continues to decline because most every bank offers the same, traditional suite of personal and business credit, deposit and cash management solutions.  Practically every bank also touts their bankers as being “trusted advisors” and “consultants.”  It’s become similar to the customer service representation made by banks…but actual lender behaviors face-to-face with prospects and customers are anything but advisory or consultative.  This I promise!
  4. They limit their value to the customer – Most commercial lenders view themselves as experts in financing as if this makes them unique.  Just the opposite is true…being an expert in financing makes you a commodity.  This is the bare minimum expectation of lenders.  As a result, this gives your bank minimal if any competitive advantage.  Granted, on a one-off transaction where you can close quickly or structure a credit in a unique way to satisfy a borrower’s need does give your bank a competitive advantage.  But overall, being an “expert in financing” is part of a list of “standard” features expected of a bank.  Not many people are terribly interested in buying a car that only comes with the “standard” list of options.  But that’s the trend in banking.
  5. Over reliance on third party referrals – The primary way most bankers get new business is through referrals from commercial real estate brokers, CPAs and a few attorneys.  Customers have historically provided referrals too.  Essentially, most lenders want to be “dropped into” an already underway transaction where they can leverage already established relationships of other trusted advisors.  And, there’s nothing wrong with that with two exceptions, #1. Eight out of ten times, lenders are being dropped into a bidding war.  Bidding wars involving multiple banks competing for the same deal provide almost no opportunity to differentiate your bank from other banks competing for the same business, #2. Because of the newness of the relationship, the lender doesn’t have much of a connection with the borrower and no loyalty has been built.  The primary factor that distinguishes one bank from another in a bidding war is rates.  We call bidding wars a “red ocean” sales opportunity similar to the color of the ocean when frenzied sharks rip at a dead carcass.  What most bankers aren’t very good at is creating what we call “blue ocean” sales opportunities.  Blue ocean sales opportunities are opportunities where a prospective new loan or deposit customer selects their new bank without much if an interest in comparison shopping other banks and where rates aren’t in the top three considerations for choosing their next bank.  The bottom line is bankers rely predominantly on luck and the efforts of their “COIs” to fill their pipeline.  If that isn’t a scary proposition I don’t know what is?  If no referrals are received, a lender usually has a weak pipeline.  It’s that simple.
  6. Time wasted on poor quality prospects – As a result of point #5, a very high percentage of the referrals received by bankers are of poor to low quality.  This creates a whole host of ripple effects including:
    1. Time wasted driving to and meeting with prospects only to find out that they aren’t a match your bank’s credit and industry profile
    2. The awkwardness that is created when a banker has to tell his / her referral source that they can’t help the person who was referred
    3. Bankers who are behind on their goals and feeling pressure to produce will spend time on “long-shot” deals to pad their pipeline report and have something new to talk about at the Monday morning marketing meeting.  Now they’ve not only wasted their own time but also wasted the time of their credit analyst as well.

The marketing and sales behaviors described above have existed in banking for over 30 years!  So without further ado, I promised I would show you your competitor’s marketing plans so here they are!

This is a visual representation of the marketing plans used by your competitor’s lenders. 

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Now this is not what their lender’s written marketing plans say they’ll do to develop business. Nor is it what your lender’s written marketing plans say.  But, it is what they do!

But make no bones about it, the above diagram accurately depicts exactly how eight out of ten commercial lenders approach their markets.  Their marketing efforts lack an intelligent strategy and focus, and their sales efforts lack discernment, discipline and preparation.

Are there repercussions from such an unfocused, “red-ocean” approach to sales that rely too heavily on the efforts of “COIs” that with the best of intentions provide a lot of low to poor quality referrals?  Absolutely including but not limited to:

  • Over 50% of today’s commercial lenders don’t hit their annual sales goals. 
  • Lender marketing efforts are very “hit or miss” wasting time that could be put to better use
  • Being buried in renewals of small, unprofitable relationships all of whom want service
  • Lenders who sound and sell alike which creates market commoditization, price sensitivity and margin pressure

The honest truth is that the sales activities of the majority of your lenders are incredibly inefficient and marginally ineffective.  Your lenders are simply working way too hard for what they produce.

We’ve spent the past sixteen years showing commercial lenders of all experience levels how to be much more productive.

Click Here To Learn How To Help Your Lenders Become Much More Productive

Here’s to your marketing and sales success!

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Have Your Lenders Become Sales Dinosaurs?

Have Your Lenders Become Sales Dinosaurs?

So what did the Sales Dinosaur Assessment for Bank CEOs in my last email reveal about your bank?  What new insights did you have about how your bank needs to evolve?  The bank-assessment in my last blog asked bank CEOs and Presidents twelve questions designed to expose a small portion of the antiquated thinking that currently exists in your bank. 

Why should you care about “antiquated thinking”?

Because nothing stifles progress, creativity and innovation faster than old, familiar habitual ways of thinking.  Wait a minute! Did I just suggest that our thinking is habitual?  Yes I did!  Just like our behaviors are habitual, the ways in which we think are also habitual.

Our habits of thought are like blinders.  They obstruct our peripheral vision and in doing so prevent us from discovering new ways to hone our organization.  As bank leaders, are you cultivating a culture that encourages and rewards new ideas?  Do your managers understand how valuable employee perspectives are in the quest to improve the customer experience?  Or are your executives, managers and employees comfortable with the “status quo?”

Has Your Bank Become a Sales Dinosaur?  Yes!  That is the best possible answer.  It means you’re not in denial about the fact that your lenders, relationship and branch managers are pretty much saying and selling the exact same way as your competitors.  It means you realize your sale teams continue to use the same, tired old approaches to finding and closing business as they have for the past two and three decades.  Every banker is approaching the same commercial real estate brokers, CPAs and attorneys for referrals.  What could be less original than that?

This, the second, follow-on blog is a “self-assessment” for lenders and relationship managers to help them determine if they’ve also become sales dinosaurs.  You likely will find this assessment to be very revealing.

Have Your Lenders Become Sales Dinosaurs?

Sales-Assessment for Lenders and Relationship Managers

You have likely become a sales dinosaur if…

  1. You’re still working the same types of COIs as you have for the past 10 to 30+ years
  2. When you think of a COI, you think of a “high profile” person
  3. Half or more of your deal flow are referrals from real estate brokers, CPAs and attorneys
  4. Your pre-call planning consists of discussing your call in the car on the way to the sales call
  5. You rely on your years of experience and “wing-it” on sales calls
  6. You consider yourself a “generalist”
  7. You believe specializing in an industry limits your opportunities
  8. Your goal on an initial prospect call is to get a package
  9. You receive far more referrals than you give
  10. You look for and like “deals with hair” on them
  11. You bring in more real estate deals than C&I business
  12. You often find yourself competing with 3 to 5 other banks for a deal
  13. You use phrases like “relationship banking,” “personal relationships”, “customized solutions,” “we’re dedicated to the community” and “excellent customer service” when talking to prospects and customers

Looking in the mirror isn’t easy.  Confronting the truth is uncomfortable.  The more “yes” or “possibly” you had as answers to the questions above, the more likely it is that you’ve become a sales dinosaur.  If more than 50% of your answers were yes, you’re among a dying breed.

What’s the point of the sales assessment for lenders and relationship managers?  Awareness!  To make you aware that you and your bank are undifferentiated, commoditized and antiquated in your approach to marketing and sales!

Einstein said “you can’t solve a problem with the same thinking that created it.” 

As lenders, relationship and branch managers, it is imperative we understand and acknowledge we’ve commoditized yourselves due to lack of originality, lack of a defined strategy and lack of discipline.  As a result, every banker sounds and sells like every other banker in the market.

We all know the game is changing in banking; the

question is how are you going to change with the times?

Check out BTI Growth Advisors evolutionary, new website and resources.

Would it be valuable to see your competitor’s marketing plans?  Keep an eye out for my next blog in a couple weeks!  I am going to show you the exact marketing plan of all your competitors.

Best regards,

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Has Your Bank Become a Sales Dinosaur?

As you’ve seen from past blogs, the consistent theme of the blog content we produce focuses on helping bankers and banks evolve and become more progressive, innovative institutions.

The theme of my next two blogs is Has Your Bank Become a Sales Dinosaur?  This first blog is a “bank-assessment” designed to assist bank CEOs and Presidents to determine if their bank has become a sales dinosaur.

The second, follow-on blog in June will also be a “self-assessment” for lenders to help them determine if they’ve become a sales dinosaur.  You may find this assessment to be very revealing.

 

Has Your Bank Become a Sales Dinosaur?
Bank-Assessment for CEOs & Presidents

Your bank has likely become a sales dinosaur if…

  1. You still believe hiring seasoned lenders who promise to “bring over their book of business” works out favorably for your bank
  2. You believe the past production of a lender is a predictor of future production
  3. You believe a seasoned banker is an effective banker
  4. You believe a seasoned banker doesn’t need further training and development
  5. You believe your lenders are unique in the market
  6. You believe your lenders communicate and sell differently than your competitors
  7. You have lenders who met their sales goals their first year being employed at your bank but haven’t met their sales goals in their second and third years
  8. Your lenders rely heavily on referrals from real estate brokers, CPAs and attorneys for most of their deal flow
  9. Your lenders are still using the same strategies to find and close business as they have for the past decade or more
  10. Your lenders negotiate harder with your credit committee or credit administrator than they do with their customers
  11. Your bank has merged in the last several years and you believe you have a united and aligned sales culture
  12. You believe your bank has a united sales culture that’s consistently deployed in all regions and all offices

Looking in the mirror isn’t easy.  Confronting the truth is uncomfortable.  The more “yeses” or “possibly” you had as answers to the questions above, the more likely it is that your bank has become a sales dinosaur.  If more than 50% of your answers were “yeses,” you’re bank is among a dying breed.

What’s the point of the CEO / President bank assessment?  Awareness!  To make you aware that your bank and your lending teams are undifferentiated, commoditized and antiquated in your approach to marketing, sales and hiring!

Hall of Fame hockey player Wayne Gretzky said “I skate to where the puck is going, not where it’s been.”

As leaders in your bank (you can be a leader without having the title) it is imperative we understand where the proverbial “puck” is going in banking and skate in that direction.  We all know the game is changing in banking, the question is how are your employees and executives going to change with the times?

Keep an eye out for my next blog entitled, “Have Your Lenders Become Sales Dinosaurs?

Best regards,

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Developing Your Bank Leaders – Part Two

Hopefully my last blog on the difference between leadership and management piqued your interest.  If it didn’t, it should have.  Why do I say this?

Think about the executive management team of your bank.  What are the ages of your executives?  In many banks today, the executive management team averages 60 plus years of age.  Now think of your regional managers, what are their ages?  Again, the average age is likely 50 to 55 years of age.  This could easily turn into a discussion on the critical need for banks to invest more energy into developing tomorrow’s leaders as part of their succession planning efforts.  But it won’t!  In fact, I will be discussing this subject in future blogs so stay tuned!

Leadership vs. Management Further Distinguished

What is the difference between management and leadership? This is the question I started with in my last blog.  The subject is so vast, it bears continuing to explore and learn the differences so supervisors, managers and executives can consciously behave in optimal ways in any situation.  Idealistic I know, but certainly worth striving for.  The biggest difference between managers and leaders is the way they motivate and focus employees.

Simply said, leadership is a passion, management is a profession. While management is a title and a “job,” any employee in your bank can distinguish themselves as a leader regardless of their title, responsibilities or seniority.  Some of the best leaders I’ve met from over 25 years of senior level consulting don’t have the title.  But they do have the passion and the behaviors!

In A Very Traditional Sense… 

Managers Have Subordinates
By definition, managers have subordinates, leaders have followers.  The relationship between a manager and their subordinates is a traditional “hierarchy”.  Unless their title is given as a mark of seniority, a manager’s power over others is through formal authority.

Leaders Have Followers
Leaders do not have subordinates as managers do, they have followers and devotees.  True leaders have an ability to connect with both the hearts and minds of employees.  They understand a good employee will give you their mind, but to become a great employee, you have to find a way to connect with, and engage, the heart of an employee.  Effective leaders invest the time to develop authentic, meaningful relationships with employees.  The conversations these leaders have, transcend traditional work related subjects.  Creating an environment where employees feel safe to be real goes a long way to engaging the heart and converting employees into followers.

Managers Use a Dictatorial Management Style
Managers have a position of authority vested in them by the bank, and their subordinates work for them and largely do as they are told.  Human nature being what it is, most of us will do just enough to get the reward.  But we won’t do a whole lot more.  Employees will give a good manager a “solid day’s work” but at 5:02PM in the afternoon, they are out the door!  This management style is authoritarian or dictatorial in nature in that the manager tells or directs the subordinate what to do, and the subordinate does this because they have been promised a reward (at minimum their salary) for doing so.  A dictatorial management style doesn’t mean that a manager is rude, arrogant and disrespectful.  It simply refers to where the authority lies and how decisions get made.

Leaders Use a Democratic Leadership Style
Telling people what to do does not inspire them.  Often, it can have quite the opposite effect.  Leaders understand the power of creating an appealing vision where employees play an integral role in the creation of that vision and the decision making process.  Facilitating processes that create a far more engaged and passionate work force is a primary leadership goal.  A leader focuses on where a team, department or organization needs to go and strives to allow employees maximum say so and decision making authority throughout the process.  That’s where employee buy-in and engagement come from.

The Focus of a Manager
Managers are paid to get things done (they are subordinates too), often within tight time constraints. Thus, they naturally pass on this work focus to their subordinates.  Managers know (or should know) that employee discipline often mirrors manager discipline.  Scary thought, right?  To run an efficient and effective team or department that gets things done on time with a high degree of quality and very few mistakes is an art that most managers can improve on.  At least 75% of employee, team or departmental mistakes are linked to managerial and process shortcomings.  Successful managers rely on organizational structures, defined processes and a high degree of oversight to boost productivity.

The Focus of a Leader
Leaders on the other hand boost productivity through inspiration and investment…emotional investment.  Leaders are paid to develop, coach and mentor employees.  Leaders understand that their employees are one of the few things that differentiate their bank from their competitors.  For this reason, they are not afraid to invest time and financial resources to grow the capacity of their employees. Leaders understand that to be a world class organization, you have to develop world class employees.  For a bank filled with mostly C-Players and B-Players, financial performance and growth will be stymied.  Leaders know that employee growth is a strong contributor to bank growth and accordingly insure their bank leverages both internal and external resources to develop employees.

Managers Seek Reliability
“Running smoothly” is confirmation of a high functioning team or department for a manager.  It’s not enough to have the right players on the bus today; effective managers strive to make sure the right players are in the right seats on the bus.  Deviation from the standard is frowned on because let’s face it, if it’s not broken why fix it?  For an industry like banking, this kind of mindset and skill set is extremely valuable for the predictability and consistency needed when dealing with customer’s finances and to adhere to strict regulatory standards.

Leaders Seek Ideas and Innovation
Like the farmer who cultivates the soil and fertilizes their crops, today’s leaders need to be effective at cultivating the minds of employees in order to grow ideas.  The mind of employee is the fertile soil a leader needs to spawn innovative new ideas that lead to process improvement and improved service delivery.  Leaders know that innovation will never be birthed from a closed mind. They work hard to create an environment where employees are encouraged to think about how to streamline or optimize some aspect of the business.  In short, they strive to cultivate open-mindedness in their departments.  The lowest level employees are often the ones that have good ideas and perspectives on how to improve things in large part because they spend so much time interacting with customers.  Leaders know that a meaningful idea that could improve the business can come from any employee at any level on the bank  and that is why they are willing to make the emotional investment in employees at every level in the bank.In summary

This table summarizes the above ideas (and more) and gives a sense of the differences between being a leader and being a manager. This is, of course, an illustrative characterization.  There is a whole spectrum between either ends of these scales and it is the effective manager/leader that is able to flow within this range in an effort to maximize their effectiveness.

It could be said that leadership is a passion and management is a profession.  Leadership is about growth, humility and accomplishing lofty goals through shared vision, shared passions, shared decision-making and shared efforts.  Management is about effectiveness, efficiency and quality outputs.  To be clear, both are essential and equally necessary if a bank is going to grow and evolve with the times.

In conclusion, the many studies conducted on employee engagement (See Gallop) prove that there is a quantifiable and undeniable economic benefit to a company that is able to engage both the mind and heart of their employees.  Clearly both effective management and effective leadership are needed to maximize employee productivity.

As you can tell, I have a passion for this subject.  If you would like to discuss some management and leadership situation in your bank, please give me a call.  My personal cell number is 760-445-4980.

Here’s to your management and leadership success!

Developing Your Bank Leaders – Part One

In my next series of blogs, we will be focusing on a subject near and dear to my heart…leadership!

Much of our time as a company is focused on working with, developing and coaching leaders in banks.  For some executives, we’re working on succession issues and preparing them for their next promotion.  For others, they’ve already been promoted into a new leadership position and we’re helping them develop the mindset and skillsets to be effective in their new role.  Other times, we’re working with CEOs and Presidents helping them take their leadership skills to the next level.

Leadership” has been such a commonly used term in business for well over three decades.  Team leader, branch leader, department leader, and project leader are titles given to executives, managers and supervisors who at best understand only conceptually what leadership is.  Even more confusing is the difference between management and leadership.

Here’s the distinction: Management is an assignment.  Leadership is a choice!

Leadership and management must go hand in hand. They are not the same thing. But they are necessarily linked, and complementary. Any effort to separate the two is likely to cause more problems than it solves.

Still, much ink has been spent delineating the differences. The manager’s job is to plan, organize and coordinate. The leader’s job is to inspire and motivate. In his 1989 book “On Becoming a Leader,” Warren Bennis composed a list of the differences:

  • The manager administers; the leader innovates.
  • The manager is a copy; the leader is an original.
  • The manager maintains; the leader develops.
  • The manager focuses on systems and structure; the leader focuses on people.
  • The manager relies on control; the leader inspires trust.
  • The manager has a short-range view; the leader has a long-range perspective.
  • The manager asks how and when; the leader asks what and why.
  • The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
  • The manager imitates; the leader originates.
  • The manager accepts the status quo; the leader challenges it.
  • The manager is the classic good soldier; the leader is his or her own person.
  • The manager does things right; the leader does the right thing.

A very powerful question to consider is what percentage of your week is spent managing and what percentage is spent leading?  And are these the correct percentages?

Adapted From “The Wall Street Guide For Management”Leadership

Perhaps there was a time when the calling of the manager and that of the leader could be separated. A foreman in an industrial-era factory probably didn’t have to give much thought to what he was producing or to the people who were producing it. His or her job was to follow orders, organize the work, assign the right people to the necessary tasks, coordinate the results, and ensure the job got done as ordered. The focus was on efficiency.

But in the new economy, where value comes increasingly from the knowledge of people, and where workers are no longer undifferentiated cogs in an industrial machine, management and leadership are not easily separated. People look to their managers, not just to assign them a task, but to define for them a purpose. And managers must organize workers, not just to maximize efficiency, but to nurture skills, develop talent and inspire results.

The late management guru Peter Drucker was one of the first to recognize this truth, as he was to recognize so many other management truths. He identified the emergence of the “knowledge worker,” and the profound differences that would cause in the way business was organized.

With the rise of the knowledge worker, “one does not ‘manage’ people,” Mr. Drucker wrote. “The task is to lead people. And the goal is to make productive the specific strengths and knowledge of every individual.”

Over the next several blogs, we’ll be taking a more in depth look at leadership and the differences between leadership and management.

Keep an eye out!