Success Stories | By (Dima) Neil Berdiev
As commercial banking industry’s profit margins near retail grocery business, demand for performance at all levels of an organization becomes critical. It is vital to understand what best performers do and how they do it, and to apply that knowledge within your team. Below is a collection of the best practices from some of the best business developers in our business. This know-how can be easily applied in other industries.
1. Educators first and foremost
Best business developers are educators, whether they deal with clients or their colleagues, including credit and risk management professionals. These successful peers may be educating their clients about the bank’s products and services and how they can solve their problems. Or they may meet with their credit colleagues to familiarize them with how a particular industry or borrower operates.
2. Not the most important team member
The true success of a commercial bank lies in the ability of different teams to work well together, solve problems, and jointly and zealously overcome conflicts. Best teams have no revenue generators and cost centers, but everyone works toward common goals, one of which is becoming a strong profit center. High performing sales executives know well that they are only as good as their team’s weakest link.
3. Be a facilitator
Truly successful business developers are the glue that pulls together the business development and credit processes and helps make things happen. They help steer a deal through the hurdles of competitive situations or the difficult situations of a client’s intent to move the relationship. One of my former colleagues was always known for understanding what and why each team member needed something and that everyone had a job to do. As a result, he worked more closely than any other team member with credit colleagues to ensure that he had all the most relevant credit risk angles covered.
4. Don’t change the system in the middle of a deal
Problems arise on just about every deal at various points of the credit process. Perhaps the loan system does not work well, the credit policy is too stringent or outdated, or the credit team does not have sufficient resources to support relationship managers. Whatever the issues, successful commercial bankers know that complaining, expressing discontent, fighting or trying to change the process instead of getting the deal done is counterproductive.
5. Selling by focusing on credit
Some of the most successful business developers were first and foremost experienced credit people. At a minimum, sales executives with limited credit background pair themselves with experienced credit professionals to offer a strong balance to their sales background. By wearing a credit hat, top performers are able to truly understand the clients’ financial situation, what’s behind the numbers and how financing elements connect with operations, strategy and direction for the company.
6. Think several steps ahead
Accomplished business development professionals do not operate in today. They look at clients’ current needs and challenges, and they also take the time to understand where they are likely to be a year from now and how it will affect the banking relationship. Perhaps the client is already reaching the organization’s lending capacity. If that’s the case, their relationship managers are actively thinking what they will need to do to support the client in the next few years, if the plan is to grow. Some solutions may be in starting discussions with another commercial bank and potentially bringing it on in a club deal basis.
7. They are not your clients
It is easy to get caught in the riddle of who “owns” the clients, especially if you’ve had relationships with management teams for years or decades. The sense of ownership can even be stronger if you brought those clients to your current organization, and even more if they’ve been following you from organization to organization. It is not always easy to recognize that your employer’s name is on the paycheck, and it is your employer who will bear the loss, should something go wrong with the relationship.
8. If you can’t be hyper-organized, you are toast
The job of a relationship manager is a constant juggling of clients’ needs that can range from complex annual meetings to fire drills to daily administrative requests. If you have a few dozen accounts, the day of an established relationship manager may remind the screen of an air traffic controller with lots of things happening concurrently (without the risks of overseeing human lives in the air). Top performers know what’s happening at any given point in time, what needs to be done, when, where and how.
9. Proactive communication
Another quality of highly successful business development professionals is constant and proactive communication with various parties from clients to internal and external business partners. Many things can fall apart if you do not inform them of timelines and interim deadlines, what you and they will need to do and should expect, what the process is like and many more factors. Lack of proactive communication is similar to being stuck underground on a subway and having no information. You may not always appreciate the information but at least you know what to expect, having some ability to change the course of action and make alternative arrangements.
10. Ask for help
For those who like and need to be in control, and business developers are certainly in that category, asking for help is perhaps one of the hardest things to do. It is especially hard if your credit is not performing as expected. Yet the best in our field know that waiting and hoping that things will work themselves out is the strategy that is fraught with unpredictability and is contrary to being in charge. After a few times of trying to reach out and ask for help, it becomes easier and easier to ask.
Not meeting sales goals won’t kill your career, but bad credits will. If your organization is heavy into sales goals, sales incentives, performance management, and dealing with underperformance quickly, there is always a risk that you may lose your job for not meeting your sales goals. As long as you’ve had strong years, decline in sales performance can be carried by those better years for some time. What can absolutely kill a commercial banking career is a credit gone bad. ■
(Dima) Neil Berdiev is a managing partner and co-founder of DNB Advisory LLC, a Boston-based advisory firm. It provides advisory and on-demand credit services for commercial lenders. He may reached at dnb@dnbAdvisory.com or (617) 233-1405.