Return to Home

This Land of Strangers - Robert E Hall

This Land of Strangers

"..the most important book of the decade." — Richard Boyatzis, co-author of best seller Primal Leadership

Relationships, in all their varied forms, have been the lifetime study of Robert Hall. He brings a rare combination of experience as a researcher, consultant, writer, teacher and CEO in dealing with the real-world relationship challenges of modern organizations. When coupled with a decade of hands-on experience in the gritty world of inner-city homeless families it translates into a tapestry of vivid stories, well-researched and oft startling facts, and strategic insights that weave together the yet untold narrative of society's gravest risk and most stellar opportunity.

Big Bank Blowback: Religious and Political Fervor for Small and Local

Religious leaders and pastors from around the country called to say that they, too, were ready to take their money out of the big banks … and instead invest according to their values, by putting money into more local and community-based institutions. – Reverend Jim Wallis, advocate for Move Your Money, Washington Post January 3, 2010

• • •

Big government, big business, big unions, big banks – big trouble. In recent weeks we have seen a new chapter unfold – a market movement has erupted against large banks. Thousands of people have taken a pledge to move their money.

New York City mayor Mike Bloomberg announced moving $25 million of municipal tax dollars to neighborhood credit unions. A New Mexico state representative proposed legislation to move the state’s $1.4 billion dollars from a large bank to local banks and credit unions. The governor expressed support. The liberal Internet newspaper Huffington Post provided a website –www.moveyourmoney.info – where you can enter your zip code and it will provide a list of local banks, prescreened for soundness by the group Institutional Risk Analytics.

Viral YouTube videos show people closing their accounts at big banks and moving to smaller banks. Endless online testimonials share how cleansed, joyful, and morally righteous people feel about making this move. It’s somewhere between a liberal civil rights march, a conservative tea party, and a women’s rights bra burning. Perhaps “marteabra” captures the spirit of it.

In many respects this flight from bigness is just the next chapter in an ongoing saga I’ve recorded over its lifecycle. According to theFDIC’s Statistics on Depository Institutions Report, in the second quarter of 2009, U.S. banks with less than $10 billion in assets gained 2.35% in total deposits while those with more than $10 billion in assets lost 1.28%. Transaction accounts were also up 4.18% at the smaller institutions while down nearly 3.83% at the larger ones. Demand deposits, mortgage loans and other types of lending activity all reflected similar trends.

Regardless of where you come down on this issue and whether this next round catches fire or fizzles, size flight is a force to be reckoned with and is but a part of a larger pattern. Peggy Noonan at The Wall Street Journal says we are living in the age of breakup – of collapsed and collapsing institutions. Over two thirds of polled citizens think we are headed in the wrong direction. According to Gallup, approval of big government and big unions has plummeted. A strong populist political and religious gale is gaining force and has now altered its course to focus on the business world, especially large banks.

Just as politicians scramble to adjust to this shift, signaled by the upset win of Scott Brown in Massachusetts (filling the late Ted Kennedy’s Senate seat), corporations and especially banks must now assess how these changes and this movement impact their brand, strategic direction and customer and market game plan. As always it is fraught with potential opportunity and peril.

One good place to start is to better understand the market. While there are many, many viewpoints in the marketplace, it would be a mistake to ignore what Jim Wallis, the Move Your Money advocate, advises: I hope local congregations and national denominations alike will begin reflecting on where they keep their money and how their investments reflect their faith. I envision congregations creating checklists to evaluate who they do business with, and national church bodies considering where they should invest their pension funds. We have been asking the wrong question: When will the financial crisis end? The right question is: How will it change us? This could be a moment to reexamine the ways we measure success, do business and live our lives …

For every person who joins the tea parties, Jim Wallis or takes the pledge at Huffington post, there will be many who will sympathize with some part of their sentiment. The banking industry must also ask the question: How will it change us? There’s never been a better time to think global but to act local.

The knee-jerk response is to tilt the advertising message to a more local, populist bent. For truly local banks that may help but the local market probably already perceives them that way. For mid to larger banks, changing the advertising will not be enough. They have a decision to make. Are they going to be “more local and community-based” in their service, management, decisions, and lending of locally gathered deposits or not? If so, it is time to revisit all of those local bank names, titles, boards, credit authorities and other structures we have spent the past two decades getting rid of? Revenue growth may depend on being more like First National Bank of Local and less like Bank of the Country.

The chief scientist at Accenture makes a valuable distinction: “Scale is not the same as big. The dinosaurs were big, the internet has scale.” Small and local are gaining revenue scale.

(Column appeared originally in ABA Bank Marketing magazine – March 2010)

By ROBERT E. HALL

Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2010

Leave a Reply

Your email address will not be published. Required fields are marked *

Article No Comments