Building an Innovative Community Bank with Steve Schnall, CEO of Quontic Bank
This week, we sit down with Steve Schnall, CEO and founder of Quontic Bank in New York City. He founded the bank in 2009
and has transformed the bank into a profitable, well-capitalized, philanthropic, digital financial institution which does business in all 50 states. We discuss innovative, bitcoin, and what kind of culture it takes to fully embrace innovation.
Intro:Helping community bankers grow themselves, their team and their profits. This is The Community Bank podcast.
Caleb Stevens: Well, Hey everybody. And welcome to episode 30 of The Community Bank podcast. Thanks for joining the conversation today. I’m your host, Caleb Stevens joined by Tom Fitzgerald. I’m starting to call you Tom, our economist in residence. I think that’s how you say it. Economist in residence.
Tom Fitzgerald: Economists because no one else wants the job mom, possibly.
Caleb Stevens: You’ve got a lot to write about lately and I know you’re really head of strategy and research and you work with our bond guys, but I feel like what people often know you most for because of your market update you put out two, three times a week is the economic side of things.
Tom Fitzgerald: Right.
Caleb Stevens: So, give us an update. What’s going on with the economy? What’s going on with the fed? And then we’re excited to play our feature conversation today with Steve Schnoll of Quantic Bank. But first give us an economic update?
Tom Fitzgerald: Sure thing, Caleb. Well, it’s sort of the case everybody wants to know rates, you know, rates are going up and kind of how high are they going to go? So, we’ve you know, the month of February the tenure Rose about 40, 45 basis points and it really has been rising since August, but that was more of a slow, almost imperceptible increase, but everybody stood up and took notice in February that rates were definitely moving higher and the momentum was getting there. As we go to record this, we’re at 150 on the, on the 10 year. And so, think about that way. We began February at about 1%. So, a big move relatively speaking. Also, as we record Fed chair Powell was doing a Q&A with the wall street journal today where he basically was as dovish as he ever was and this was his last appearance before they go into a quiet period before the March 17th FOMC meeting. So, like I said, he was as dovish as he has ever was. And he was asked about quantitative easing, given the fact that long rates have risen. Would they start buying some more bonds on the long end to kind of temper that? And he really just said, you know, they don’t see that on the near-term horizon. And so that’s created a little bit more of a backup in the long end yields, but you know, I think when we get to that March 17th meeting, we’re going to hear and see a lot more about, you know, possibly the quantitative easing and becoming a little bit more prevalent if those rates continue to back up because the fed does not want to see the rates move to the point where it does start to damage some of the interest rate sensitive sectors, like the housing market that has been just very red hot in the last year. So, kind of keep that on the front burner there, you know, as the FOMC meeting approaches on March 17th and kind of see where rates are heading, as we move into that meeting, it may influence what the Fed does as they come out with their forecast and the press conference that Powell traditionally after those meetings.
Caleb Stevens: And we’ve got the jobs numbers coming out here in just a couple of days. By the time this show gets released, it’ll be after those job numbers. But any thoughts on what we might can expect for that release?
Tom Fitzgerald: Well, it’s fun…
Caleb Stevens: And people are going to look back at you now and say, we’ll tell them you’re either totally wrong, or right. So, let’s see how good your crystal ball is, right now.
Tom Fitzgerald: How good was he. If you think about the January numbers were just slightly positive, I think 49,000, something like that and then December number was negative. So, the forecast for February is better. They’re looking at almost like 200,000 jobs being the expectation. And you know, I’ll say we do a little bit better than that, just because some of the economic numbers have been better than they have been recently and they haven’t been bad recently. It’s just, I think there’s momentum building. So, we could do something North of 200,000. So, there’s your forecast, we’ll see what happens, but just keep in mind that even if we were doing 200,000 a month, that’s kind of rounded up on a year’s basis, that’s two and a half million new jobs. We’re still 10 million jobs down from where we were pre pandemic. So, you’re talking about, you know, a two and a half, you know, year type grind to get back to the jobs we lost in that two-month period last year. So, it’s going to be a, and that’s why the fed basically says, you know, we are going to be low for longer because we want to get that job market, back to where it was full employment and that’s just going to be a, I think, a multi-year process.
Caleb Stevens: : Hmm. Good stuff, Tom. So, I’m really excited for the interview we’re going to play today. Because we talked to Steve Schnoll, CEO and founder of Quantic bank in New York city. And we had Patrick Cellzon on this show. I don’t know, it was probably our third or fourth show and you and Eric were interviewing him. And you were, you guys were kind of like a fish out of water talking about all the things that they were doing. But Steve is an awesome guy, really passionate about innovation, about culture, about serving groups of people who are under-banked and underserved. And so, I thought this was an awesome conversation all about what does it look like to become an innovative digital bank? They’re not that big. And so, it’s easy to think, well, you know, my bank’s not that big, so can we really become innovative? Do we have the budget? Do we have what it takes to do things that are out of the box, stay ahead of the curve on technology. And they’re a great example of that. Yes, you absolutely can if you have the right people, the right culture, the right strategy. And so, I thought that was a great conversation.
Caleb Stevens: Yeah. I think, yeah, he talked about how he’d got this bank charter and it was in a, you know, kind of a low-income area and he knew if he was going to really expand that bank, you know, grow it in size, kind of create the type of banking franchise that he wanted to create, it was going to have to be done in more of a digital platform and more of an innovative way. So, I think, yeah, he really has some interesting thoughts and ideas on how to do some of that type of banking.
Caleb Stevens: Good deal. What were you excited to play this interview for you guys right now? And by the way, this is our final show under the name CenterState correspondent division. After this show starting on March 15th, we will have rebranded to South State correspondent division. Our bank at large South State Bank, will be converting in May, I guess, Interstate and South State, but our division specifically, it’ll be rebranding to South State on March 15th. So super excited about that. If you see our logo change a little bit, if you see the name change, don’t freak out, Tom and I are still here. Eric’s still here. Everything is running as normal, but we’re excited to be operating under our new brand and our new name. So be on the lookout for that. But in the meantime, here’s our conversation with Steve Schnoll.
Caleb Stevens: Well, Steve, thanks for hopping on the podcast today. It’s good to see you. How are you doing up in New York?
Steve Schnoll: I’m doing great. Happy to be here.
Caleb Stevens: Give us a little bit of your background how you got into banking and then tell us all about Quantic bank, what you guys do up in New York with Quantic?
Steve Schnoll: Sure. So, I’ll make a long story short. I spent pretty much all of my professional career in mortgage finance. Started a mortgage company you know, one man shops out of my apartment, grew it to a thousand person what ultimately became a publicly traded mortgage REIT and National Mortgage Banker. Exited that business in 2007 just ahead of the credit crisis. And you know, sort sat on the sidelines for a little while, figuring out what my next play would be. Got involved in some other industries, real estate and fitness clubs and that kind of thing. But ultimately, what I was seeing, what everyone was seeing throughout this credit crisis is that as the banks were contracting and failing and consolidating, and that Dodd-Frank legislation took place. It became increasingly more difficult for a lot of credit worthy would be homeowners to obtain mortgage financing. And I saw an opportunity to step back into the mortgage finance realm and serve a niche audience that was being under-banked and overlooked, but it was clear to me given some of the byproducts of the, you know, the credit crisis that we were going through that a bank charter would be a much better venue within which to establish a business lending to underbanked homeowners.
So, you know, mortgage companies are always dependent on warehouse lines of credit, and that was, you know, something they all lost during the credit crisis. But also, running a bank seemed to me just to be a little bit more intellectually interesting. I had never worked for a bank or certainly owned one. And it was an opportunity for me to learn a few new tricks, bring my existing skill set into a bank charter and then develop from there. So, I went shopping for a bank found a tiny little beat-up thrift in great neck, long Island, which was under a cease-and-desist order had 20 million in assets and was literally to disappear. So, we saved that bank. Audit, recapitalized it. Moved it to New York city. And so, we had one branch and set our lending division inside the branch and where we really struggled, figuring things out, it was how to grow a viable depository and I have no background in that. And that’s where we struggled, but that’s what really led to the evolution of what Quantic is today.
Tom Fitzgerald: Can you speak a little bit about that creative process? Because I’m always intrigued by, we talked to somebody like yourself, that’s you know, entrepreneur, very creative type that, you know, speaking from someone who’s not that creative. What was that? Was there a spark, was there a vision that got you into it? It was a more, just a case of, of happenstance. And from that perspective, as it became a reality, does that vision, do you still have the same vision or sort of shifted as your kind of that journey along with Quantic has continued?
Steve Schnoll: Well, we get to apply creativity to various facets of the bank. What we do in the mortgage lending area it’s unique in that most of the loans we make are to low-income household’s minority, you know, people of color immigrants, gig economy workers, and the like that are not necessarily able to qualify under the rigid Dodd-Frank income documentation guideline. So, we were really sort of very special function there. And the creativity in that respect is really just to figure out better ways to penetrate that market and make more loans to more of a low-income household. But on the bank side, on the depository side initially frankly we lacked creativity. We looked like most other community banks, but worse in that we had one branch and no real strategy. And so sure people walked in the door to open accounts, or we had business development, people who had gone and tried to bring in accounts, but that was a slow and arduous task and it didn’t happen fast enough for us.
And so ultimately, we started to rely a little too heavily on broker deposits and listing service deposits and FHLB borrowings. And you know, from a balance sheet management standpoint that was easy to do and the cost of funds was low enough. And our asset yields were high enough that we still had a great spread, but we weren’t building franchise value. We weren’t building a core customer base. And most importantly, we weren’t satisfying our regulators because as you know listing service and broker deposits are kind of the boogeyman from regulatory perspective. So, I would say we feel like a startup today. You know, I’d say the bank started two years ago. It was largely around the time you mentioned you met Patrick Cells my chief innovation officer. It was large at the time that he and I teamed up where we had to really figure out who we’re going to be, how we’re going to evolve from a traditional brick and mortar community bank to be able to really amass enough core retail depositors to actually have a viable franchise. And it became really clear. It was clear to me when I bought it bank, I thought brick and mortar bank branching was going to be a dead model. And I think ultimately from the consumer’s perspective, commercial banking is different, but we’re a consumer bank. And probably from the consumer standpoint, this is a true statement. Everybody’s got a bank in their pocket on their mobile app and online banking, and you’ve got all the Fintechs. I thought people weren’t going to use branches anymore, so I didn’t open it. And I was right, but I was early. So, I was wrong in the beginning.
Caleb Stevens: Yeah. I was going to ask you just real quick, what was the landscape like 10 years ago, 12 years ago when you were starting? And I’m sure it was a lot different now than it was today.
Steve Schnoll: Back in the old days.
Tom Fitzgerald: Yeah. That’s right.
Steve Schnoll: Well, you know, 10 years ago, mobile banking and online banking existed, but they were, it was kind of V1 of mobile banking and, you know, a lot of people had it, but it wasn’t the be all and end all people still use the branch. It would probably all be online banking more than mobile. And so, we weren’t reinventing anything by, you know, having these technologies. So, I’d say for the 10 years leading up to maybe two years ago you did see an evolution towards more digital banking. And some of the FinTech started to come in like the chimes and then 26 is, and Mondo’s and all those guys, but for us we just looked like a community bank and we had to figure out, as I was saying, you know, who are we going to be now? Now we know that brick and mortar branching is not going to be our solution because if we want to replace all of those less favorable deposit types with retail customers, opening a brick-and-mortar retail branch. “A” It’s going to take way too long. “B” It’s going to be too expensive and “C” will probably its past it’s useful life. So really making a concerted effort to become a digital bank was where it was at for us. And that is where we had to get creative because we didn’t really have the skillset in-house, we didn’t have full stack developers. We didn’t have people that understood SEO, SEM, online chats you know, measuring and all the metrics around how to figure out if your marketing efforts are effective and is your cost per acquisition proper and are you serving the customer right from a customer. So complete overhaul of how we do everything. And that’s where, you know, it’s a segue to culture because we had to change the way we acted and behaved before we can really change the way the bank worked.
Tom Fitzgerald: I wanted to ask you to Steven about the diversity of your clientele. And I wonder if that was part of the, just the nature of where the bank, your initial bank was located, or was this really a vision that was driving you to one of bank, say the under-banked or the low-income client, as well as just the diversity of the client that came in the door? Was that a vision that you had from the beginning? Or was it more a matter of this is our client base. We have to work with them?
Steve Schnoll: Great question. It was both. So, the vision initially was to try to fill the niches that were left unfilled in the wake of the credit crisis in Dodd-Frank. But because when we moved the bank to New York city, when I say New York city, in fact, we moved it to a story of Queens first. The bank was just too small to come to Manhattan, which is where I lived for so many years and where my circle of influence was. So, a story of Queens, is first stop, and my chief lending officer and one of the co-founders George Lazorita’s lives in a story and had a, a pretty robust network there and so it made sense to start there. And as a product of being in a Historia, Queens is the most ethnically diverse place in the country. Our customers naturally then we’re as diverse as the community and a lot of these customers, these, you know, small business owners, bodega owners, restaurant owners, Uber drivers, taxi drivers later to become over drivers. You know, a lot of them were difficult to bank because they didn’t you know, they didn’t have the documentation, they didn’t have the traditional W2, 2W2’s and two pay stubs that were really what everybody else was looking for to make a home loan, so we adapted. Part of our DNA is adaptation, which is why we call ourselves the adaptive digital bank. But everything we do is to adapt to the needs or on the lending side to the unique needs and circumstances of our customers. And on the deposit side to build adaptive products that speak to passions of our customers, like our Bitcoin rewards checking product. So, we started serving this market. We became very adept at it. And ultimately, we applied to the CDFI, which is a division of the US treasury to become a certified community development financial institution and that’s a big part of who we are now. Fewer than 2% of banks in the country are CDFIs and it’s what makes us a mission oriented financial institution that’s really focused on lending to under-banked or low-income households in our case. And we use the deposits we generate on the digital banking side to fund those loans done in the shares.
Tom Fitzgerald: Very good.
Caleb Stevens: Well, Steve, I feel like over the past 12 months, I’ve read more articles about, Quantic. Heard you guys in the media, in the news, on LinkedIn, all over the place. Talk about some of your recent initiatives that you feel like have set you guys apart as a more innovative, adaptive digital bank that you guys have become. Tell us, what are some of the things you guys are up to?
Steve Schnoll: So, we’ve done a few things. I’d say one of the major initiatives was it as an internal initiative that wouldn’t obvious to the customer and the outside world. But one of the things we realized when we wanted to make this conversion to a digital bank and really just to grow and scale was that we really didn’t have a good control over our data. And we found that we have a core operating system. We have a loan operating software, variety of other tools that we use to service our customers and run our business. But we didn’t have some of these systems don’t talk well to each other. There was no API connectivity. We didn’t have robust, usable, actionable reporting. So, what we set out to do first is build what we call a Quantic works. And it’s a SQL cloud-based database that taps into the APIs of our existing core data servers, the core operating system, the Los extracts the data on a real-time basis and enables us to then develop reporting that are custom to the needs of each department head and to the board management, the regulators, so that now we have a much more robust, usable set of actionable real-time data. That was a pretty major undertaking for us, took us a couple of years spent a bunch of money on it, but it’s proving to be invaluable. Especially with things like the CDFI in order to be eligible, to remain a CDFI, you have to demonstrate that at least 60% of the loans you make are to your target markets.
And in our case, our target markets are one of 1600 low-income census tracks in and around New York. And the second target market we have is low-income households nationally. So, in order to determine eligibility, every municipality has a different area median income, and then that differs by household size. How to match up our data to each municipalities AMI information was a task that took hundreds of hours. How to match up all the census tracks of where our borrowers are purchasing property or refinancing property to the CDF buys, low-income census tract map took hours and hours and hours. And it was just mind bending. And we never knew where we stood until the end of the year when we ran the report. And so, we said, let’s solve for this. Let’s build a database that is a smart database use a little AI to do some predictive things and figure out in real time if we’re eligible and where we’re eligible, what products help us hurt us in determining eligibility. What geographies, what channels? And so, data is proving to be King, so that Quantic works. Project was huge for us. Another thing we’ve done that is a first, as you may have read about or seen is, we’ve launched a Bitcoin rewards checking product.
And that was really a manifestation of just a personal passion that I have around crypto. And Patrick who you’ve met you know, he and I got to talking one day and he was helping us evolve some of our digital marketing strategies and we both love crypto. And we ultimately, before we did anything, we ended up starting an Ethereum mining operation, which is a whole another, crazy journey. But we were just scratching your head saying, how can a bank? How can a community bank engage in a, or develop a product that involves Bitcoin? Because this is something that, you know, this is only a few years ago, less than three years ago. We thought we would start to take on more prominence, you know more mind share as it evolved and became more, you know, accepted on a widespread basis. And so, at the time, and still, you know, banks don’t really own cryptocurrency. It doesn’t sit on bank’s balance sheets, but and this is even before the comptroller of the currency came out and said, it’s okay for banks to custody crypto.
Steve Schnoll: So, we had to come up with a product that engaged people in Bitcoin but was something that wouldn’t run afoul of any regulatory constructs. And so, we worked very closely with the OCC on this. We came up with this Bitcoin rewards checking and the thesis was “A” we want to drive core low cost or no cost, sticky transaction accounts and deposits. And how do we do that in a field that’s becoming increasingly more crowded online? Have a differentiator. So, here’s something we’re passionate about it’s a differentiator. And it’s something we thought would be really important in the future. And so, people are interested. We did a number of surveys, you know, surveyed thousands and thousands of consumers. And as it turns out, most consumers were interested in Bitcoin would own it. Didn’t know how to get it. Didn’t understand the risks. Thought it was volatile. Maybe didn’t have the resources. And we said, Hey, why don’t we give Bitcoin away? Why don’t we reward people for doing for us, but we need giving us deposits and using our debit cards.
So, we are an interchange and whatever we run on the interchange we’ll give away in the form of Bitcoin rewards. So that was the Genesis of it. And it took us a couple of years to get it together and get it to the place where we felt the regulators would be comfortable. They don’t approve products like this, but they were able to give us some invaluable feedback and ask us the right questions and push us to make sure that we have all of our ducks in a row. And so that’s a big part of our story today, not Bitcoin rewards checking per se, but it does hold us out as an innovative community bank that’s now a national player that’s trying to continuously develop innovative and cool products. We’ve got another one coming out in the fall. We’re going to be the first to have a wearable debit card ring. And you know, that’s probably three, four months away from that. And we’re really excited about that. And that’s not going to be for everybody, but in the days of, yeah, it looks kind of like that, you know. I actually wore one. It was just funny, Patrick and I, we would go to meetings and we’d both be wearing them and he’s like, I like how your rings matches.
Caleb Stevens: And I’m holding up my wedding ring for the folks listening. We’re on a zoom call and I’m holding up my wedding ring for Steve to see it. And I’m like, you can pay with a ring. That’s pretty crazy.
Tom Fitzgerald: The latest and greatest.
Steve Schnoll: Yeah. So, especially in COVID, people don’t want to touch anything. So, you know, you have a contact plus, I mean, there’s a lot of contact with now, but just one of the many things you’re going to see that we start to bring out on the deposit side that are innovative and digital,
Tom Fitzgerald: Let’s, kind of go down that Bitcoin road a little bit more because you obviously made that journey. And I’m sure there’s some community bankers that are listening that are kind of considering maybe dabbling in it or getting involved in it. Do you have any advice for them? Some of them may be avoiding some of the pitfalls that you did early on? Is there some guidance you can give to them as they can kind of consider? Is this something we want to get into?
Steve Schnoll: I predict that within the coming year or so, you’re going to see some third-party solutions that enable banks to more easily get into offering products that involve cryptocurrency. So, our Bitcoin rewards checking product was a massive build and it was a pretty significant collaboration with a firm called My Dig, which I think is probably the dominant custodial player. And they’re doing a lot of really interesting things in and around Bitcoin, but we worked really hard to build this product. There’s a lot of moving parts to it. And I think that it’ll be easier in the coming year or so for “A” for banks to be able to have a product like this, but also, I think that consumers want to own Bitcoin, especially now it’s been in the news. You know, it’s always in the news when the price is skyrocketing and then when it plummets and falls out of favor, nobody talks about it anymore. But I think that it holds a unique place in today’s economy because we have a situation here where, you know, our government is about to complete printing $6 trillion in new money. And from a historical perspective, anytime a government has inflated the money supply by such an extreme amount. It really hasn’t boded well for that currency. And so, and I’m not alone in my concern that, you know, this, I think the economy is going to be great this year. There’s all the stimulus coming in and interest rates are low, but ultimately inflating the currency like that, you know, typically isn’t very sustainable.
So, you start to see institutions now moving in small percentages of their liquid reserves into Bitcoin. You saw mass mutual, bought Bitcoin and square bought Bitcoin and obviously Elon Musk and micro strategies. So, I think you’re going to see more and more institutions start to allocate towards it as an asset class. And I think consumers need in on that because there’s a widening gap between the top 1% and everybody else. And if this economy does suffer a downturn or if the does devalue, then the people that don’t have much are going to have less and Bitcoin is an accessible way for everybody to share in what is an asset class that could very well prove to be a very resilient store of wealth. So, surveys have been done of the consumer and most consumers don’t really know where to get Bitcoin or don’t trust the exchanges because they’ve heard stories about what happened with Mt Fox or other hacks, but once banks start offering customers, the ability to buy and sell big point, I think people will trust it far more. And I think those solutions are coming, I think, within the next year or so, you’re going to start to see banks. I mean, even you saw BNY Mellon announced that they’re offering custodial Bitcoin services to its customers. I don’t think they announced that they’re offering buy, but it’s all coming. And at that point the short answer to my long answer is, don’t try to build this stuff yourself. It’s too expensive and arduous, there will be solutions coming out, but when they do embrace them, because if you don’t, you know, I mean, I’m not saying Bitcoin’s the be all and end all it’s a thing. But I think if you want to remain relevant, you’re going to have to be able to offer some of these things that your competitors are offering.
Tom Fitzgerald: Yeah. And I think you’re right. And I think the younger generation is already embracing it a lot. I mean, you look at a lot of the money apps like cash app and some of those similar apps, they give you the opportunity to buy the Bitcoin and put it in your account and just treat it like you said, like, you know, I’ve got my dollar account here and I’ve got my Bitcoin account here. And like I said, those apps give you that ability just to kind of buy and sell and send it to somebody else very easily. And so that younger generation, I think is just, you know, they’re going to be very comfortable with it as they continue to, you know, mature and grow. So, I think like you said, you know, it’s coming to the banking environment, you know, the banking world, whether, you know, whether we want it or not. So be prepared.
Steve Schnoll: You raise a great point about how the FinTech’s are disintermediating the banks. They’re chipping away at all the products and services that were historically just bank products and services. And, you know, now you can borrow money from non-banks, especially for small businesses and consumers. And, you know, you mentioned the cash app where you can have Bitcoin and money. So banking is changing and it’s not, it’s not easy to recognize as a community banker. And when I say community banker, you guys realize like 5,000 of the 6,000 banks are…
Tom Fitzgerald: Community Banks.
Steve Schnoll: Community banks. So, it’s virtually all of us, and it’s not easy to figure out what you should have on your roadmap, but you can’t put your head in the sand either. And think that, you know, your brick-and-mortar franchise, unless you’re in a rural where, you know, people just, I don’t even know of a place where people are not going to use technology eventually. So difficult decisions need to be had at the board and management bubbles and figure out what the journey is supposed to look like.
Caleb Stevens: Yeah. Well, Steve, let’s end on this. Something you touched on a few minutes ago, culture. You’re talking about wearable payment devices. You’re talking about Bitcoin. How do you create a culture inside your bank that fosters these kinds of changes in this sort of innovation? Because I would imagine a lot of our listeners are saying, wow, we’d love to get there one day where you guys are. But it can’t just start with one person it’s got to be, it’s kind of got to take root in your whole organization. So, talk about how have you crafted a culture that embraces innovation?
Steve Schnoll: Sure. Well, we, you know, we’ve all heard, you know, culture eats strategy for breakfast, you know, and ultimately, I think everybody understands that culture is important, but it’s lip service more than actionable change. And when we started to do all this stuff, you know, not that there was resistance, but it was just unfamiliarity. And so, we had to really get everybody speaking the same language for starters. And so, I’m a big fan of Pat Lencioni. You know, we at the advantage, for instance. So, we took some pages from his playbook and ask these six questions. You know, who are we? Why do we exist? You know. What are the things we’re supposed to be doing? What are our core values? What’s important right now? And, and so on. And when we sat together as a management team and started answering these questions, and we had an offsite where we sat together for two days and started asking these questions and then figuring out our core values. This was the starting gate. You know, this was the starting gate of beginning to develop culture, get everybody aligned on the mission, aligned on what’s most important now. And when it came to the core values, we, you know, everybody’s got core values, like integrity and hard work and team, you know, those are sort of a ticket to admission. If you don’t have those, you don’t belong here.
Core values need to be values that really resonate with your operation and everybody’s different. But we came up with four core values that really helped us to start to effectuate a change in the culture. And it started with know the goal. That was our first one. Know, the goal, everybody needs to understand where we’re going, not just on the big picture, but even in a meeting like, Hey, we start getting lost in the weeds. Somebody will say, stop let’s know the goal. What are we supposed to be doing right now? Progress, not perfection is the next one. Some of the things we’re trying are really hard and rather than letting people get you know, stressed out or disenchanted with an initiative, we say, look, we don’t have to get this perfect. We just have to make progress towards the goal. If we all know what the goal is. And it takes some of the stress off with people to know, Hey, we can make mistakes as long as we’re making progress. And then which leads to the third one, try it on. You know, we’ve tried new technology that was a disaster. And you know, when that happens, people are afraid to make a decision to do something new because you know, the last thing we did might not have worked out. So, we say, look, we’re, we’ll be in a meeting or a conversation. And some of them will express resistance to an idea and somebody else might say, Hey, just, let’s try it on. See if it works. If it doesn’t fit, if it doesn’t work, we take it off. And the last one was just to add some levity to it all is say cheese and just make sure that, you know, if people are sitting on a zoom call with a grimace on their face, because they’re stressed out or tired or whatever, is it, Hey, say cheese. And everybody smiles when somebody says that it’s goofy and silly, but it does resonate. And so, we live these things.
We talked part of our vernacular. We talk about them all the time. But it’s more than that. It’s talent development. It’s making sure that you recruit the right people. It making sure that people are onboarded and indoctrinated to the culture and the mission of the company before you sit them at their desk and put them to work. It’s making sure that there’s ongoing training and support. It’s making sure that there’s leadership development. So, you have emerging leaders that you can cultivate. You have people who are already are leaders, but who may not actually be good leaders because they’ve never been taught to be a leader. And then you have leaders of leaders. And so, we’re building a structure of, you know, this discipline around helping to really train and cultivate leaders so that people know they have a succession plan and they know that there’s upward mobility if they desire it. And then the last to build the culture, this has gone, this is probably the biggest move was giving KPIs to every employee in the organization. And we found that while everybody likes to be paid well, what’s more important to most people is to make sure that they are valued, that their voices heard, that they feel that they’re part of something or that they understand what it is they’re supposed to do every day.
And so, by building KPIs and giving each employee three or four metrics upon which, their performance will be measured, you can give them feedback quickly and then compensate them for achieving the goals that are consistent with what the company wants them to be doing. And that adds job satisfaction, which goes to culture. All of these are unique subjects that you could probably spend two hours talking on any one of them, but all together, it adds up to a place that we know we’re trying to build what we refer to as a destination employer. And if we talk about culture a lot, and then we don’t deliver it well, then we’re hypocrites. So, we have to deliver it. And we work really hard at it, and we’re not perfect at it. And if my employees hear this and think I’m full of it, then I’ve got work to do. But I think with most people, you know what I’m saying should resonate because I think we’re doing a decent job at it.
Caleb Stevens: Well, if folks want to get in touch with you, Steve, or learn more about Quantic, how can they find you guys?
Steve Schnoll: We’re at quantic.com. And I think my contact information is there.
Caleb Stevens: We appreciate your time. This has been really rich, really dense discussions. And like you said, we could probably spend an hour on all the different subjects we touched on. So, I’m excited for you guys and that we appreciate your time. Thanks again.
Tom Fitzgerald: Thanks man.
Steve Schnoll: My pleasure. Nice talking to you guys.
This week, we change it up and talk some football with Mark Richt. Coach Richt is the former head football coach of the University of Georgia Bulldogs and University of Miami Hurricanes, and a longtime assistant coach for the Florida State University Seminoles. He is currently a football analyst for the ACC Network. Mark and his…
This week we sit down with Ballard Cassady, CEO of the Kentucky Bankers Association. We get his thoughts on regulation, headwinds facing the industry, and what it takes to run a successful community bank in today’s environment. The views, information, or opinions expressed during this show are solely those of the participants involved and do…
This week we feature a special conversation with Tom Michaud, CEO of KBW. Under Tom’s leadership, KBW has become the nation’s premier investment bank to the financial services industry. The company is routinely recognized for its leadership in mergers & acquisitions, capital raising, and equity research. Tom maintains strong personal relationships with leading industry executives,…
This week we have the pleasure of speaking with Dee Ann Turner, former VP of Talent for Chick-fil-A. Dee Ann was instrumental in building and growing Chick-fil-A’s well-known culture and talent systems, responsible for selecting thousands of Chick-fil-A franchisees and corporate staff members. Under her leadership, Chick-fil-A enjoyed industry-leading employee engagement scores and became known for…
This week is all about balance sheet management, inflation fears, and the continued excess liquidity. Tom sits down with Chad McKeithen and Andrew Norrid from our broker-dealer (Duncan-Williams) to make sense of it all. The views, information, or opinions expressed during this show are solely those of the participants involved and do not necessarily represent…
This week we sit down with Lon Langston, founder of the Engaged Banker Experience. We discuss culture, leadership, and the cost of low engagement. Lon has been studying and practically applying management and leadership since college. In 2010, he began to study behavioral economics. Over time, that expanded to all behavioral science, including the neurology…