Creating a Values-Based Bank

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This is a podcast episode titled, Creating a Values-Based Bank. The summary for this episode is: <p>In this episode, Dart Bank President and CEO, Bill Hufnagel, joins Expert Insights' host, Joe Welu, to share his vision for Dart Bank and how he is leading the bank to be values-based and high tech, high touch. </p>
Episode overview
00:56 MIN
Bill Hufnagel's Vision
01:10 MIN
Building the Team and Culture
01:51 MIN
Structuring Dart Bank Staff for Success
02:21 MIN
Leading with an Entrepreneurial Spirit
01:12 MIN
Building a Relationship Business
01:53 MIN
Empowering Personalized Customer Communication
01:49 MIN
A great value system and taking care of customers
03:10 MIN
Quality Communications
00:42 MIN
Providing a modern experience as a community bank that is embracing technology
02:02 MIN
Vision and Values that Translate into Positive Business Results
01:55 MIN

Speaker 1: Welcome to the Expert Insights podcast. Each week, we sit down with executives and leaders in financial services to discuss industry trends, challenges, and strategies, creating a playbook that upcoming leaders can follow to drive revenue and find their own success in the market.

Joe Welu : Hello, everyone, Joe Welu here. Another episode of Expert Insights, where we talk about growth for modern banks and lenders, customer loyalty, and all of the topics that are really important to the modern banking and lending industry. My guest today, super excited to have him with us, is Bill Hufnagel, President and CEO of Dart Bank. Bill's got an incredible background. Bill began his career at First National Bank of America in'94 as a regional investment manager.'99 he co- founded Providence Mortgage Company, served as President and CEO. And then in 2009, the group joined forces with Summit Bank, and in 2014, the team joined Dart Bank to which Bill became president and Chief Executive Officer in 2018. Bill has been widely recognized by the Community Bankers Association of Michigan and was awarded the Best Community Banking award for 2021. So let's get into it. Bill, thanks much for joining me today.

Bill Hufnagel: Hey, thank you, Joe. I'm super excited to be on the show and appreciate you having me on.

Joe Welu : Yeah. So Bill, one of the things I really want to get into today is how you created a vision for what you believed a modern bank should be like and then you really started to make that vision reality. But talk to me a little bit about how you formed that vision, what that vision looks like.

Bill Hufnagel: One of the things that we looked at is first of all, I was able to put a good team around me. So I had a vision of what I thought, but being able to have a great team of people around me, and especially, I looked at my senior leadership team and really looked at that. And then as we've come up through the business in banking and through mortgage company, having owned our own business, we felt we were a little bit more entrepreneurial than we are just true bankers. And it sets a little different way of looking at things and we felt there was a better way to bank people and just a better way to take care of people and to serve our customers and to do those types of things. So that was kind of the vision that we had and we didn't really see it in the marketplace. We didn't see somebody that was out there and really just doing a great job of serving their clients, taking care of them, and being more... Kind of one of our values is forward thinking, kind of being more forward thinking with what we do.

Joe Welu : Yeah. So you guys are always thinking about really where things are going and how you can really stay ahead of the trends and better take care of your customers.

Bill Hufnagel: Yeah, it's how do we utilize technology. We utilize a lot of the things out there in order to just serve the clients and serve them the way they want to be served. And I think that's rapidly changing with how people do everything, how they shop for everything else, so we assume banking would be the same way.

Joe Welu : Yeah, that makes sense. So part of you implementing your vision was really about... I mean, it's a people business, right?

Bill Hufnagel: Right.

Joe Welu : At the end of the day, you got people internally that are taking care of other people in a lot of cases. Walk me through your philosophy, and even a little bit about your methodology, for how you think about building the right team and creating the culture that you want.

Bill Hufnagel: All right. Well one of the things that we did is we instituted, I don't know if you've heard of EOS system.

Joe Welu : I have. Yeah, actually.

Bill Hufnagel: Yeah. So it's a kind of a jump for me and something a little bit different. So we kind of put that system into place. We used Tom. I had a guy come in, Tom Giberson, who is just brilliant and had us help us with it because I think what we've done is leaned on other professionals. I think that's been a key part of our success. And so we really looked at that and said, okay, what do we have to do first? First was setting up our core values, making sure we have the values that are set for the entire bank and the entire company. Then we looked at, okay, what's our purpose. What's that going to be? And then what's our niche? And we've really established those things and then part of that process is really making sure we have the right people in the company. Making sure the right people, they get it, they want, it and they have the ability to do it. And those are going to be the key things that we did for it because I think a lot of times your great people, you almost end up putting more on them because they're great and they do always do a great job.

Joe Welu : Yeah.

Bill Hufnagel: But that's not necessarily fair to them, if you're letting other people stay around maybe that aren't as great. And so we've really-

Joe Welu : So true, right?

Bill Hufnagel: Yeah.

Joe Welu : So true.

Bill Hufnagel: And so we looked at the company and we made the commitment that, hey, we're going to do the things that we have to do to make sure that we just have great people. And that includes investing in them, training them, paying them, and then also holding them accountable to just do a great job and then giving them a lot of freedom in return. Something as simple as dress for your day, kind of got the dress code, a lot of things you wouldn't think the pandemic would be helpful, but it was. We're able to institute some of those things that we didn't have before and maybe some of the flexibility from where you work and some of those things and I think that was a key part of it.

Joe Welu : Yeah, that makes sense. So during the process, so many organizations that are built, maybe they don't always have the right structure in place to really enable teams to function, even if you do have some of the right people, if you don't have the right kind of process and structure in place. Walk me through just a little bit about kind of what... In your process, did you identify really gaps where you felt there were silos or where you needed to kind of, hey, rip it down to the studs a little bit and kind of re- engineer how the organization was structured?

Bill Hufnagel: Yeah. I mean, the one thing is we're a 100 year old bank. With that is great, we've been around for 100 years, but with that get some things that maybe aren't the best way to do things. And one of the things, one of my hated things is it's just the way we've always done it. And I'm fine with that, if it's the best way to still be doing it. But if it's not let's do something different. So we did. With that system, we kind of broke down the entire organization and that's fine, but what the system let us do is communicate up and down what we're doing. So we're holding meetings and we're holding people and we're keeping the whole organization informed of what's going on, let them know what is happening. And we had a ton of gaps and we had things were in places that they didn't really belong and people managing areas that didn't fit with what they needed. And so we've really had to break that down and move ome things, whether it's IT, and we talk about technology is such an important part of it, maybe moving that and that's something that directly reports to me now because it's something that is just it's that key to what we do. And then moved managers into place that maybe weren't managers before. And yeah, we had a lot of things that we did and shuffling that we did to make sure that we're able to fill those gaps, put the right people in place, and then empower those people to run their divisions, make decisions, and be better.

Joe Welu : No, that sounds great. I mean, when you think about kind of values for a second, kind of walk me through what's unique and kind of your secret sauce, in terms of the values that you guys have as an organization.

Bill Hufnagel: Yeah. So our values are pretty straightforward, I think, in values that you'd want in an organization. But integrity, what is really just going to be a core one, you have to have integrity in everything you do.

Joe Welu : Of course.

Bill Hufnagel: And I think that's really going to be important, especially as a leader. If I'm going to make changes, if I'm going to do things, that integrity has to be there. They have to trust what I'm doing. Then it's going to be engaged. And what we've done, is an example would be we set up a case inaudible. So our profit sharing now is paid in the form of Dart Bank stock.

Joe Welu : That's smart. I like that.

Bill Hufnagel: And because... It's an owner's mentality. If you own something, you crosstalk-

Joe Welu : Totally different mentality.

Bill Hufnagel: Yeah, so that kind of goes back to that entrepreneurial spirit. So I think all of our employees are now owners of the bank and so now they treat it differently. And so that makes for more engaged employee and it's kind of that positive attitude to make sure that you're really engaged in what you're doing. Then we're forward thinking. I wanted innovative but I got outvoted. They said banks can't be innovative. So I wanted forward thinking, and it's problem solver, proactive, how do we... I think, banks... And a lot of people have us say, it's just no first. And it's like, ours has to be, well, no, how can we make that work? How can we get this taken care of for them? How can we do things differently?

Joe Welu : Isn't that so true though, how so many people, and we see this in companies that we work with, but they see the obstacle, right?

Bill Hufnagel: Right.

Joe Welu : If you talk about, hey, here's how we want the customer experience to be, and they give you 14 reasons why it's not possible. Right?

Bill Hufnagel: Right.

Joe Welu : So what you're describing to me is what you really drive into your organization is bring me how it might be possible and bring me your ideas on how to make things happen. Is that fair?

Bill Hufnagel: Yeah, that's exactly it. And if they do those things, then I think we're going to have a lot more satisfied customers. It's a pretty small world. You get those people talking and telling other people, it works. Then the last one is really caring and that's just about relationships and also community. We're a community bank so taking care of the community we serve, but I think it goes a little bit deeper than that. It's just where it's a relationship business, life's a relationship business. So the more we take care of each other and care for each other, everything's going to fall into place. And I think that's where you really just build a nice, strong culture. So the core values were a key part of it. And people really have to believe in those and want to be part of that. And what I've told people is if you believe in that, you want to be part of that, it's going to be one of the best places you've ever worked. If you don't, it's going to be a pretty miserable existence for you and you're not going to last very long inaudible.

Joe Welu : And it's so true. And I think, one of the things I've learned over of the last 10 years in building our company is that you have to really be mindful about hiring for the right types of people. Right?

Bill Hufnagel: Right.

Joe Welu : And if you're not, it's problematic. So it's really, really great perspective. So from what I know about you guys, and you mentioned relationships and how important those relationships are, from what I know about your organization is that you think about building really lifelong relationships with your customers. Is that an accurate way to state that?

Bill Hufnagel: Yeah. Yep. And yeah, with all of our customers, and employees too, but our customers also. It's making sure that we can have that lifelong relationship with them and that they're going to look to us as the expert that they can count on and be there with them for the long term.

Joe Welu : You want to be that trusted financial partner-

Bill Hufnagel: For sure.

Joe Welu : For all of those different needs that they have. Yeah. So if you think about... You have great value system, great vision for the organization, you've put the people in the right places, then as you look to really translating all of that into how you take care of a customer, do you have any insights for how you have managed to really take, for example, high quality communication with customers and how do you got people that are empowered, but how do you translate that into taking care of a bunch of customers and any key insights or progress you've made there?

Bill Hufnagel: Yeah. And I think one of the things that we did early... I mean, we have great sales people and they're great communicators and that's what they're good at doing, but what a salesperson usually lacks maybe is sometimes the follow up and making sure we stay in touch on. So that's where the relationship that we have with you guys and have with Total Expert is kind of a key part of what we do because it allows us to stay in front of the people and to automate some things and making sure that we're taking care of them and communicating with them through processes. And not only through that process, but after the process and letting them know what's going on. And just a lot of time, it's just being in front of them because when they need to make a decision, they need help, they're like," Okay, go Dart Bank." And so that's going to be the key thing that we've done. And that's where the relationship with you guys has just been a key part for us.

Joe Welu : Thank you.

Bill Hufnagel: And I'm really excited because it doesn't just touch one area. It's going to touch every area of the bank for us. And that was a key part of what we looked for when we looked for a partner. It's not just we're mortgage part, but it's not just mortgages. We do commercial, we do everything. So you guys, it's a key partnership for us.

Joe Welu : It's an exciting partnership for us as well. So super grateful to have that opportunity and look forward to all the things that I know we can work on together this year.

Bill Hufnagel: For sure.

Joe Welu : As I think about really the customer relationships, right? And we've done some research, I've read a lot of research, and I just want to see if you agree with me that, and it sounds like you do. But the quality of the communication between you, your organization, and your people that have that customer facing responsibility, the quality of that communication really heavily influences how strong those customer relationships are. Would you agree with that?

Bill Hufnagel: I definitely agree. And I think what we're seeing is our surveys from our customers will reinforce that for us.

Joe Welu : Yeah.

Bill Hufnagel: So we can tell when the communication's good in how they rate what level of service they've gotten. And then if it's not as good, you're going to see that too.

Joe Welu : It seems overly simple, right? And I think in business, it gets complex in a hurry, when you think about all the touch points. But you think about why do relationships break down in the first place? Take customer relationships out of it but it's generally communication. And we see that across the board, as one of the biggest gaps organizations have, with really customer relationships and customer loyalty is the way they communicate at scale, and not necessarily treating or understanding a specific customer and being able to communicate with them in a one- to- one base. And you guys have a focus around high tech and high touch, right?

Bill Hufnagel: Correct.

Joe Welu : So you want to provide modern experience. Walk me through a little bit about that priority for you and how that's evolving, would just love to hear how you're thinking about that.

Bill Hufnagel: I think as community banks, and banking in general, was kind of a late adopter of technology. So they'd wait until the technology was out there. And then if I, being a community bank, we're five years later that we're finally coming in and offering that technology, and looked at it and go, we can't be that. I mean, every company is a technology company for the most part. And then you have a different thing that's using that technology, maybe your service you're selling. So we figured we've got to be more at the tip of the spear. So we've really needed be an early adopter of technology and utilize that technology. The great thing about being the size we are, we're small enough where we can institute some of that technology in there at more of a rapid pace and be able to get that out to our customers. So we've really done that. That's been a key thing that we've done is instituted a lot of the technology. And then now the key part is how do we utilize it and make sure that we have the talent in place to actually use the systems and get them into our daily process. And then with the ultimate goal of really just make sure we take care of our clients and make sure we have a great customer experience. Because our niche is fast and reliable relationship banking. So in order to be fast and reliable, you have to use that technology and you have-

Joe Welu : Yeah. There's really not another option, is there?

Bill Hufnagel: No, I mean, you just can't throw enough people at things to make it that fast. So it's going to be key to have that technology in place.

Joe Welu : Yeah. Yeah. As you think about kind of checking the pulse of the customers and how they're feeling about the services, so you guys are pretty proactive in that? You're doing surveys out to the customer base?

Bill Hufnagel: Yeah. And we just instituted a new one that we're doing to make sure that we're getting it and then getting out. Because everybody, kind of the first thing they do, they go to Google. They check those things. So we've just put something in place now that really is kind of ramped that up to try to get more of that feedback in and more of it out onto the websites and more into Google to get feedback on, both as individuals and the bank itself.

Joe Welu : Yeah. So I want to just take a step back for a moment. Because I think it's one thing to talk about vision and being values based organization, and then it's another to actually see that translating into positive business results and growth. Right?

Bill Hufnagel: Right.

Joe Welu : And you've been able to make that turn. Walk me through just a little bit of some of the impact that you guys have seen and just the mindset around the vision and the culture and all of those things. How's that translated into the results?

Bill Hufnagel: One of the things that I think where we saw it is anybody can say it. Every company has values.

Joe Welu : Totally, yeah.

Bill Hufnagel: Everybody says they're going to do a great job for the customers. It's just what you have to do. I mean, that's just part of it.

Joe Welu : Right.

Bill Hufnagel: Where I think we're fortunate, or unfortunate, we had a pandemic come in. So for us, the decision making process was very easy because we went to our values and this is just what we do. So we did things differently. We protected our people, but we never closed our lobbies. And we kept them open because I always told people, I'll be there for you when you need us. And that was the time that they needed us and we have their money. You lock your doors, people get a little bit nervous. So we kept our doors open. We protected our people. I came into work every day. We were out in the lobbies, we were greeting people. I was safe. We had our plastic shields up. We had our distancing, we'd had everything in place, but we stayed open. And then they had the PPP loans come in for the small businesses. And we attacked that. And we worked around the clock. We had people working all weekend, 24 hours a day, making sure we gave those customer as their loans. And we told all of our employees they deserve this. We've been in business. They need this money. We're saving people. We're making a difference. We are critical. And then our people got a sense of pride because they-

Joe Welu : Oh, totally.

Bill Hufnagel: Stood in the face of adversity and they delivered and that changed our culture. And now people are like," Well, I like winning. That feels good. I like doing great things."

Joe Welu : Winning feels good, right?

Bill Hufnagel: Yeah.

Joe Welu : I love that story.

Bill Hufnagel: Yeah. So we don't apologize for it. So then now you're seeing our profitability and everything just soar because of what we did then and all these people take great pride in it. So that's been, I think... An unfortunate time, but probably something that has changed the face of this bank, and that will hopefully propel us for the next 100 years, is just that attitude and inaudible.

Joe Welu : I think, my key takeaway from that story, and congratulations, I mean, that's-

Bill Hufnagel: Oh, thank you.

Joe Welu : Great outcome. You guys had a ton of impact for all of the people that need that money. Right? But if you didn't have that culture in place and the mindset and the vision in place first, it doesn't feel like you probably are able to execute nearly as well. Would you agree?

Bill Hufnagel: Oh, yeah. Yep. If we hadn't... Fortunately, it wasn't... If we hadn't put some of the things in place that we had, I don't think we've been able to do it.

Joe Welu : Yeah.

Bill Hufnagel: But we said it, and everybody kind of took a breath and then we just pushed forward, and luckily the people responded well. Thank God everybody stayed safe and healthy. That was a big part of it. So we were fortunate there. But then we were able to deliver on it and yeah, it was, like I said, it was a really good... During a difficult time, it's a good time. And that's usually when company things are made and things happen. I always say character's easy when things are going well, but it really shows up during difficult times.

Joe Welu : And absolutely true. I know we've seen that. I've seen that personally in all my experiences in building companies. And well, Bill, congratulations on all the success, first of all, and thank you for the time today. Really amazed at what you guys have been able to do in the community bank level, which is not always easy to innovate and be forward thinking. So well done and look forward to staying in touch with you.

Bill Hufnagel: I appreciate it. Thanks for having me on today, Joe, and I wish you all the best too, in the rest of the year.

Speaker 1: Thanks for listen. Be sure to subscribe for new episodes each week and to learn how the Total Expert platform, purpose built for financial services, can help your company drive three times growth and double customer loyalty and retention, visit totalexpert. com.

DESCRIPTION

In this episode, Dart Bank President and CEO, Bill Hufnagel, joins Expert Insights' host, Joe Welu, to share his vision for Dart Bank and how he is leading the bank to be values-based and high tech, high touch.

Today's Host

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Joe Welu

|Founder & CEO, Total Expert

Today's Guests

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Bill Hufnagel

|President/CEO, Dart Bank