A bank CEO’s lament
A bank CEO recently mentioned a frustrating challenge: bank employees who are desperate for an A or A+ in their work, but what they deliver isn’t an A for the bank as a whole.
Maybe it’s legal counsel being slow to sign off on a material contract because they are bogged down with minutiae. “Give me your five material concerns and we’ll deal with them,” the CEO pleads. “Don’t hold it up for weeks because of dozens of nitpicky items!” But the attorney plods along, proud of his commitment to pristine agreements (an A from his perspective); meanwhile, the bank’s ability to proceed rapidly and nimbly suffers (not an A for the bank).
Maybe it’s somebody in the compliance function focused on keeping the bank “out of jail” with the regulators. But in the process of protecting the bank (and its customers and employees), the compliance professional boxes the management team in more restrictively than is necessary. The compliance professional overlooks areas where the bank and its management team have legitimate (and compliant) flexibility and insists on the most stringent outcome possible. It’s an A from her perspective: “There’s no way we’ll even brush up against the fringes of being in compliance jail!” Meanwhile, the bank misses an opportunity to roll out an innovative (and compliant) new product or service – not an A for the bank.
And…
Other examples I’ve seen:
- A Finance professional provides data to management with extreme and meaningless precision: “Earnings were $3,216,967.43 for the month,” he announces, with a clear note of pride that he knows where the company is to the penny, though he may be oblivious to the significance of the number and whether what he reports is useful for decision makers. And his insistence on the A of hyper-precision can actually make it harder for decision makers to identify and focus on the relevance and implications of what he reports.
- A salesperson pushes hard to close sales while committing the company to a level of operational delivery (time, features, quality) that it cannot meet practically and profitably.1
- A bank lenders grows her loan portfolios aggressively – perhaps to meet production targets (likely linked to compensation outcomes2) – while paying too little attention to the creditworthiness of the borrowers, setting the bank up for potentially serious (and seriously sub-A) outcomes later.
Underlying factors
I’m aware I’ve created caricatures here, playing to common and unflattering stereotypes. But stereotypes often reflect common aspects of actual, pervasive human behaviors. And I don’t intend here to embarrass anyone or demean any professional field. Nor do I intend to impute any bad motives.
But this sort of behavior is common, and it happens for a reason – and we should think about why.
Two significant underlying factors come to mind:
- Inappropriate incentives
We tend to do more of what gets us what we value. If I’m motivated by financial gain, I’ll push hard to produce loans if that’s how my incentive compensation is computed (and I’ll naturally not pay as much attention to other important factors – like creditworthiness – that don’t factor into my pay).
But even non-financial incentives come into play, including professional pride, peer pressure, perceptions about how the top performers in my field do things, or my sense of worth in delivering things that meet my personal standards for excellence.
- Lack of clarity about what is important to the company as a whole
My self-defined “excellence” can actually be sub-optimal for the whole company. I need to know what A looks like for all of us working together. And I need to be willing to be flexible (within the true and not simply preferred boundaries of my area of professional expertise) when my flexibility contributes to the good of the whole.3
Yet professionals often live trapped in silos which also function as echo chambers: all I think about is my area of responsibility, and the voices around me live in and focus on the same narrow slice of reality. What I need is to see how my professional field and expertise relate to and affect the whole.
A practical example
At the bank where I served as CFO, we had two major changes in accounting principles hit at roughly the same time. One related to a massive and long-awaited revision regarding how to account for leases. The other was more narrowly focused – estimating bank credit losses – but was massive for our bank and the entire banking industry. As Finance professionals committed to excellence, it was tempting to seek to deliver A+ (or at least A) outcomes on both topics: robust procedures, new state-of-the-art software, and top talent assigned to make it happen. And that’s exactly what we did for the credit loss rule changes. But we did so because anything less than an A there would have been a serious problem for the bank as a whole (and not just for our sense of professional pride).
Lease accounting? This was a big deal in many other companies (and even some other banks). But it wasn’t a big deal for our bank: not that many leases to deal with, and the financial effects were not material. So we didn’t stress about delivering an A here; a low C (from a Finance perspective) actually was an A for the bank. We framed out appropriate bare-bones processes and implemented a bare-bones software solution. Had we sought to deliver the same kind of outcome as we had to for the credit loss rules, we would have been wasting the bank’s resources (time, energy, attention, funds – all of which are scarce by definition).
It’s something to think about
As steward leaders, let’s watch out for this dynamic in ourselves and in our teams. Let’s pay attention to incentives (financial and otherwise) that can yield non-optimal outcomes for the whole. And let’s always frame what success looks like (within the boundaries of ethics etc.) from the perspective of what’s best for the whole. As a steward, it’s not about me anyway. It’s not about whether I’m making A’s; it’s about where my contribution and the contribution of my team are helping the company make A’s.
Eric R. Alexander
September 2025
No A.I was employed (or harmed) in the creation of this content.
© 2025, Six Arrows Consulting. All rights reserved.
1 I’ve been on the receiving end of this: technology firms I’ve encountered blithely promise lots of nifty features, many of which aren’t as described and/or (usually “or”) are not even available yet. But my frustrating experiences haven’t only been with software providers: An HR-related third party administrator failed spectacularly and repeatedly to live up to expectations (and promises!), seriously harming (a) their relationship with us, (b) their reputation (unhappy customers have a tendency to talk – and tweet, text, blog, rant – about unhappy outcomes), and, most significantly, (c) our employees (to varying degrees). The sales folks in all of these instances probably felt they deserved A’s for their work; their firms earned C’s and below.
2 It’s fun when our A’s come denominated in dollars and end up in our personal bank accounts.
3 This does not excuse anything unsafe, underhanded, illegal, unethical, and so forth. I have a responsibility to know where the true boundaries are, and to make sure management understands them too. But I don’t help the company by imposing my own, more restrictive view of what is proper and allowed.