CEO Article: What Keeps You Up at Night?

I have had the fortune in over 30+ years of banking, software, and consulting to have met bankers from practically every state in the union. What I observed in that time is that a majority of bankers are overwhelmed with the daily tasks of running a bank or their own division, attracting new business, taking care of current customers, endless internal meetings and putting out fires that pop up out of the blue almost daily.
Very little time is left for real strategic thinking and planning.  Because there are so many challenges and demands to address on multiple fronts, the sheer size of the planning process can be daunting, causing either procrastination or paralysis in beginning the process.

I have always been a big believer of keeping things simple. It’s better to tackle the really  “important stuff” than to get one’s head wrapped around the axle, where it just keeps spinning and spinning, going nowhere but in circles. Because I sell software and consulting services to bankers, I have used one question over the years that I pose to prospects.  This question shines the spotlight on their real needs or fears in order to determine if I have a solution that might help. If I end up listening to an endless list of problems and challenges that appear to be scattered all over the board, I simply need to ask one question. “Mr. Banker, what really keeps you up at night?”

I am not implying that we all spend our nights sitting upright in bed sweating profusely with worry, but it is meant to help the respondent to hone their thinking to focus on the truly important problem they might be facing. In a majority of cases, the answer I hear turns out not to be a current problem, but fear or worry of a future event, that can cause one to lose sleep at night if it were to occur.

The question in and of itself is not new or original.  I am quite sure you have been asked this question at one time or another, but it’s one of my favorites. Why? The question forces one to pause and really focus on the one or two things that are important or worrisome. Fear is a strong, motivating factor for all of us.  If channeled properly, it is quite useful in planning and risk management. The responses I have received over the years have helped me to help others by eliminating the “noise” of daily problems and focus on what is really important.

For example, using an extreme example (I hope):  If your answer is that you fear global Armageddon, your planning might include building or purchasing an underground cave or missile silo.  You might stock food, water, and ammunition to last for a number of years until the disaster blows over.  I am not advocating that you need to plan for this, but certainly disaster and recovery planning for a localized disaster is required.

Bringing this closer to home, depending on your role within your bank or credit union, the answer may vary when asked what keep you up at night. I challenge each of you to answer this question To help you get started, let me help you with some examples of some answers you might respond to the self imposed question of “What keeps you up at night?”

  • “Farm real estate values have escalated dramatically over the last decade and I am concerned if the values declined by 25% to 40% in a short period of time.”
  • “We keep losing customers to the larger organizations due to their stronger technology and product offerings for their customers.”
  • “The recent recession has caused interest rates to fall to historic lows for an extended period of time. I fear the impact to our bank’s profits if rates rise suddenly and rapidly.”
  • “The extended injection by the Fed of liquidity into the financial system could result in runaway inflation that cannot be contained.”
  • “Our local economy is too dependent on one company for a majority of jobs. If they close or move elsewhere, the impact on the local community would be devastating.”

I think you get the picture. Once you have determined your own answer to this question, then you can begin the planning process.  It might lead to implementing a revised set of underwriting policies to contain risk, increased level of stress testing or asset/liability management review, or any number of changes in polices or operating plans to address a current problem, or future anticipated event from having a negative impact on your institution.

Thank you for your business and continued support.

Duane Lankard

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