Strategic Planning (Pt. 2) with Bert Purdy, Partner at FORVIS
This week we are doing a deeper dive into strategic planning with Bert Purdy. Bert is a Partner at FORVIS and serves community banks around the country.
The views, information, or opinions expressed during this show are solely those of the participants involved and do not necessarily represent those of SouthState Bank and its employees.
Caleb Stevens: Well, hey everybody and welcome back to the Community Bank podcast. I’m Caleb Stevens. Thanks for joining the conversation today, and this episode, we are diving in again into Strategic Planning. Last week I spoke with Steve Young, our chief strategy officer here at SouthState, and we talked about how we at SouthState approach Strategic Planning. And we’re going to dive a little deeper into the nitty gritty with Bert Purdy. He does strategic planning for community banks, he is also a partner at Forbus, which is an accounting firm that does a lot of great work with community banks. And Bert and I dive into more specifically, how do you create a strategic plan. What’s the value of a strategic plan? Even down to your mission statement as a bank, how do you make sure these plans is portable and can be disseminated across the entire organization? All good things that we dive into, and I hope it will be beneficial to you and your team as we move into next year. So, here’s my discussion with Mr. Bert Purdy. Well, Bert Purdy, thanks for hopping back on the podcast today. It is great to be speaking with you. I think we had you on sometime last year, I believe. And so, it’s good to have you back, catch us up on what’s been going on in your world.
Bert Purdy: Oh, thank you, Caleb, it’s a pleasure to be here. Well, the banking world is in a different state than it was when we were talking the last time, so things have changed dramatically. And personally, our firm has gone through a merger of equals, it used to be B K D and we merged with D H G down in your neck of the woods and became Forbus. And so, that integration is ongoing but very exciting. So, we have a lot going on.
Caleb Stevens: Well, you are a self-described accountant who does not like numbers and you might be the only accountant that I know that describes himself that way. Most accountants, I meet love numbers, and love talking about statistics and balance sheets and P&L. What do you mean by that? I’ve always been kind of struck by that. You got a great personality, you’re a good speaker, and you got a great following on LinkedIn. Just kind of give us a snapshot kind of how you think about being an accountant, but also knowing that there’s more to it than just the numbers.
Bert Purdy: So, I used to really enjoy the numbers, that’s why I went into accounting. And then discovering that public accounting is a people profession, and then learning that I enjoy training and talking with people and learning about culture and strategy, that’s where I have positioned myself in the latter part of my career. So, while I still am an audit partner and am good at the numbers, it’s not that I’m not good at it’s just the numbers aren’t what drive me on a day-to-day basis. It’s really working with my clients and their strategy and execution is the exciting part.
Caleb Stevens: Like what Albert Einstein said back in the day, not everything that counts can be counted. Sometimes we try to boil life down to numbers on a spreadsheet and while numbers are important, data important. It’s not always that clear-cut and that simple.
Bert Purdy: Right? And it’s a people profession and so is banking. And so, that’s where I really enjoy what I do, is working with my clients and helping them help their clients.
Caleb Stevens: So, did you sort of stumble into bank accounting? Did you kind of know that’s what you wanted to do coming out of school? Kind of talk about how you got into what you do.
Bert Purdy: Well, it was because of a mentor. One of the partners in my office led the banking practice for our entire firm, and after working with him on just one job and seeing the respect that he had from his peers and the staff and his clients just made it so I wanted to be like him. His name wasn’t Mike, but I want to be like Mike basically, and I modeled my career after him in the way I dressed, acted, and work ethic, and it’s paid off now. He and I are completely different, he is an accountant who loves the numbers, and he also likes the people side, and that’s why he was so successful. But we’re different, but I was able to model myself after him. And then fell in love with banking because of that.
Caleb Stevens: Well, that’s a good lesson I think for some of the younger leaders and bankers listening is A, the value of mentors, and B, you may not know you enjoy something until somebody gives you some encouragement to try it. Sometimes your passion follows proficiency and getting good at something. Sometimes we sit around and think, I got to discover my passion, but we sit around until we think we can find it versus maybe go try some things, maybe listen to a mentor or two and you may find your passion that way.
Bert Purdy: And he’s actually the one of the people who pushed me out of the numbers and into speaking and being comfortable in front of people. I remember we were at a board meeting early in my career and I thought, oh, I’ll just sit and just be there, but he’ll do all the talking and just 10 minutes in he said, ”Bert, why don’t you cover this?” And I was not ready, but he knew that I could do it. And so, after that point, I learned always to go into a meeting prepared for anything and not just expect to sit there. And that really made me come out of my shell per se and get more comfortable in front of people.
Caleb Stevens: Yeah. Well, that’s obviously created a lot of extra value for you, not just being somebody who can audit banks and look at their financials, but also speak, help them think through strategy, the big picture of what they’re trying to accomplish, and I think that’s a good segue into strategic planning, which is an area that I know you’re really passionate about. We had you back on, I guess it was sometime last year or the year before. And back then I think rates were at zero, and banks had liquidity out of their ears. People were saying the fed’s not going to raise rates for years and years. And man, have times have changed, and with that, certainly, your strategic plan is going to need to adjust to the times and to the environment that we’re in. Talk about kind of what you’ve seen over the past couple of years as far as the environment shifting and any broad strokes as far as what do you think that means for strategic planning for next year.
Bert Purdy: So, strategic planning sort of went on a hiatus there for two years because in 2020, 2021 banks were very reactionary with P P P. And so, I did some strategic plans in 2019, early 2020, and basically, they sat on the shelf for a while. And so, in 2022 I’ve been hot and heavy with doing strategic planning again. But the thing is, the environment may be different, and the risks are a little different, but planning for the future is really no different, and what I have seen this year working with my community bank clients in this is it’s setting the foundation as the number one priority. And when I talk about the foundation, it’s the foundation of the culture, the mission, the purpose of the organization, and getting employees then to buy into what that is because we can set all the goals in the world, but if it’s the employees who achieve those goals, so unless they really find that purpose and meaning in what they do, then the goals are useless.
So, that’s what I’m primarily working on, especially with first-time strategic planning clients, is what is this foundation at which we want to build? What’s that cornerstone that’s going to hold the organization together so that the larger we build it, it’s still going to have that firm foundation? Those repeat clients that I do this year after year, then we can get into some really good strategy deposit gathering strategies, which 12 months ago people wanted to get rid of deposits and now everyone wants deposits. Frankly, I don’t think we’re really in a liquidity crunch per se. I think we’re in an income crunch because it’s, the bond portfolios are underwater. You can still sell them, but you’re going to take an income hit on it. So, there’s still liquid, but nobody wants to take that hit. So, I think it’s a misnomer to call it a liquidity crisis or something of that nature.
But those are some of the things that we’re talking about now. And then, especially when it comes to interest rate risk, not just investments, but loans and how quickly are we raising deposit rates? That’s all the stuff that the nuts, nuts, and bolts that we get to talk about. But that’s banking in general, that’s nothing special. That’s just traditional banking. We’ve just had this long period of time including most of my career where we haven’t seen rising rates. So, we have a whole generation of bankers who’ve never experienced this. So, that’s again, why setting that foundation is even more important.
Caleb Stevens: Well, let’s go there, let’s say I’m a first-time CEO, let’s say I sort of worked my ranks up from commercial lender to community president or chief operating officer, and here I am, I’m finally sort of at the helm and my team is looking to me to help set the vision and the direction, but I know that I’ve got to create buy-in, I’ve got to have everybody aligned and on the same page and want them to feel like they own the plan just as much as I do. I come to you and I say, Bert, help me out. What are just some things that I need to do throughout this strategic planning process to at least set that foundation that we can all be excited about? What would you advise? What are some of the things that they need to think through, whether that’s their core values, their culture, or their strategy? What are just some key pillars that we need to start with to kind of lay that foundation that you use are so important?
Bert Purdy: So, one thing would that mission statement and I think I talked about this on the last podcast, but I show Simon Sinek start with why TEDx talk in every strategic planning session I do, because it helps set the foundation, and one of the things he says in that is, people don’t buy what you do, they buy why you do it, and that why you do it is the mission statement. And so, really reevaluating what the bank’s mission statement is and then getting the employees to buy in on it. And when I show the mission statement to employees, if they can’t quote it off the top of their heads, something’s wrong. And if they don’t get excited by reading it, we need to do something. And so, getting a group or a committee of employees together to figure out what that mission statement should be is a great way to go about that.
And then the second biggest thing really for that foundational level is working on communication, and every organization, I don’t care how big or small you are, communication is the thing that is griped about the most, but it doesn’t mean that we should ignore it. So, there are things that we can do to communicate better up and down and across the organization, and employees just want to feel heard and valued. That’s what it all comes down to, and people talk about this younger generation having a different work ethic, and doing things differently than the older generations. And I don’t really think that’s true because I’m Gen X, the millennial generation or Gen Z, coming in, and they want the exact same things as I did. The difference is they’re willing to do something about it, they’re willing to speak up, they’re willing to move, and they’re not going to put up with things like the older generations did. And so, I think we’re the same. So, working on that communication and then giving the purpose behind it, those are the two biggest things that I see.
Caleb Stevens: And it probably as a leader feels like you’re overcommunicating, you’re not in most cases overcommunicating. And that’s the saying, you need to overcommunicate because to the rest of the people who are hearing you, you’re probably doing the bare minimum of what they need to hear to actually understand where we’re going.
Bert Purdy: There can also be some fatigue in communication and we saw that during the pandemic, you know, zoom fatigue. But if it can be in an email rather than a meeting, an email should be the way to go. I think meetings should be to make decisions, not just share information, too many times we have meetings just to have meetings where we don’t really need to put that many people together to hear what’s being said.
Caleb Stevens: Death by a meeting. Patrick Lynch wrote a whole, a whole book about it.
Bert Purdy: But people still want to know what’s going on. So, sometimes I’ve heard especially this year that people miss the all-employee meeting and it’s harder the bigger you grow to have that. But we have technology tools that you can use that. For example, our CEO does a video I think once a month and it gets opened right away by employees. So, it doesn’t necessarily have to be an in-person meeting, but it’s still that communication that works.
Caleb Stevens: So, let’s say that you’re in a strategic planning session. We’re talking about next year or maybe even the next three years, and there are a couple of different departments that are sort of at odds with each other about what direction we ought to go or maybe one of the priorities that one of the departments has is going to require a lot of time, effort, resources on another department and there’s some friction involved. What does it look like to build consensus enough to where everyone can get excited about moving forward, knowing that you’re probably not going to get 100% buy-in from every single person involved, but at the same time you have to have enough consensus and buy-in and people have to at least feel like they’ve been heard so that they can all say, okay, I’m ready to commit to what we’ve decided to do. How do you sort of help teams work through that conflict that I think we all go through during strategic planning?
Bert Purdy: The most important thing is get them in a room together. You know, too many times we act as silos and we just gripe about things and maybe we’re griping to the president or some other executive and everybody goes to him and expects him to fix it. You know, one of the things I do in strategic planning sessions is have an employee meeting, a select group of employees, no executives present and just talk about the issues, and that’s what we see is that there’s, there are silos, it’s loans, doesn’t understand back office, back office doesn’t understand loans. They’re both equally important in the organization. You know everyone is a member of the organization. And so, getting them together to talk about it, it’s amazing. We always leave the meeting with consensus because they’re just able and willing and with a neutral party like me to navigate that conversation, we walk away with a successful decision.
Caleb Stevens: I’ve seen that questionnaire that you ask team members of a bank to fill out. I think that’s what it is. And that thing is thorough, the employee survey. Yeah, that’s right. Talk about the value of that when it comes to getting a temperature check on how your team’s doing, how your culture’s doing, and how that ought to inform your strategic plan?
Bert Purdy: So, the employee survey, it’s multiple questions based on culture, employee engagement, and then open-ended questions of ideas. And so, we get a lot of good feedback. One with the rated questions on culture and engagement, we get a good heat map basically of how are things, and that’s where I see communication as always, the number one weakest thing. Evaluations are always number two because it is hard to have a good evaluation process. But then the open-ended questions and we send these to the entire employee base and especially if we can do it year over year and see trends, that’s really powerful. But those open-ended questions give us a lot of good ideas and I bring the results of these to the employee meeting. And so, we get to walk through and talk about why are certain things rated high? Because we don’t want to ignore our strengths, we want to improve on our strengths too, and then the things that are low, and then talk about the ideas that were brought up. And then I get to take those ideas into the board and exec sections to really then say, this is what the employees are excited about, this can help, I come in with communication ideas that the employees bring, and so it all just works really well that way. I’d love the employee survey, it’s totally different than what I used early in my career because it’s more culture, employee, and based.
Caleb Stevens: So, let’s say we’re wrapping up a strategic planning meeting or offsite or retreat. We all feel good about where we’re going into the next year or the next several years. Does the plan live in some kind of document that everyone can kind of take hold of and see? Is it portable? I mean I’ve heard turnaround CEO sort of tout the fact that I turned this thing around with a one-page business plan and it was so simple and I’m thinking, man, you did not turn around whatever, you know, airline company or whatever, massive Fortune 500 company with a one. I mean, certainly there… you had the high-level priorities there, but there were so much more than that one page that went into effect. Talk about sort of how you summarize a plan in a way that everyone can kind of see it and understand it, but also knowing there is so much that goes on inside of a bank day-to-day, you can’t possibly fit it all in a one document, but you do want to have sort of the direction laid out. Any thoughts on that?
Bert Purdy: So, I see a lot of strategic plans that are a bunch of fluff, that doesn’t do anybody any good. It just is useless information because it’s not what you’re going to use to drive the organization forward. So, when I draft a plan, it’s got maybe one page of background information, then it’s goals and objectives. Here’s the goals and objectives that we outlined, and frankly, we can’t have a lot of goals and objectives because then we’ll, paralysis by analysis, there’ll be too many things. So, we need a select and I break things into basically five categories and a couple of items in each of those categories. I have some clients they want one, two, maybe three priorities for the year and that’s okay. The reason I go with five categories and then multiple things within those categories. Because not every single one is going to be driven by the same person or group of persons. So, certain people can work on other things and you can still have a bunch and it needs to be actionable and it needs to be strategic. There are a lot of activities that we can do in banking in general, but is it really strategic? Probably not. So, we really want to stick to those strategic forward-looking things.
Caleb Stevens: Yeah, and correct me if I’m wrong, but I believe the history of the word priority is that it was traditionally singular, not plural. The word priorities plural came to be much later, and it kind of goes back to the reality that if you have too many priorities, you really don’t have any priorities. So, figuring out what’s most important, right?
Bert Purdy: Well, you can think about Gary Keller’s book The One Thing. What is the one thing you’re going to use to drive you forward? And I also think it’s the same thing in a mission statement. A mission statement is singular. There should be one mission, not multiple parts to a mission. It is one thing. Then there may be ways that you achieve that mission that could be multifaceted, but the mission is singularly focused.
Caleb Stevens: Well, let’s talk about community banking more broadly. We talked to Steve Young, our chief strategy officer last episode and kind of got his take on how SouthState does strategic planning. And so, this has been a great sort of piggyback episode to kind of drill down more into the nuts and bolts of how you think about strategic planning. But one of the questions I posed to Steve was what are some of the headwinds that community banks are facing today, but then also what are some of the advantages that community banks have today? You know, you hear a lot about how hard it is to get scale or invest in technology because you don’t have the money that a Wells Fargo does or it’s hard to make money because interest rates have been low for so long at least historically. What are some disadvantages, some headwinds, but then what are some ways that you’re looking at community banking now saying, now’s a great time to be in community banking?
Bert Purdy: Well, I think it’s the same answer for both, frankly. It’s people, I think people is our biggest risk right now. Now, we may see that change a little bit if we have a recession come down, but finding and retaining, attracting, and retaining quality people is a headwind. But it’s also if you have a great culture and can do it, you are at an advantage, and one community bank differentiates itself from the neighbor down the street by its people. We all sell the same money, have the same products and services. It’s the people that matter. So, I think it’s the people that go both ways. And it’s not a business to business, it’s not business to consumers, just people to people, it’s person to person. That’s what community banking is, is we’re dealing with people, we’re not dealing with businesses. Businesses don’t make decisions people do. So, it’s the people that matter.
Caleb Stevens: Well, Bert folks want to get in touch with you and learn more about your process. If they’re thinking through their own strategic planning methodology and feel like they need to give it a makeover and a refresh, how can they get in touch with you and learn a little bit more about Forbus and all the things you do to serve banks?
Bert Purdy: Well, Caleb, thank you. This has been a pleasure. The easiest way to get ahold of me is my email, email@example.com, or certainly, reach out to me on LinkedIn. I’m fairly active on there and easy to find. There’s not many Bert Purdy around.
Caleb Stevens: Well, that’s another maybe good ending question is give me your 32nd elevator pitch on LinkedIn. And even for the most numbers-driven people that just want to really dive into the numbers all day. Is there any value to being on LinkedIn, to having a personal brand, to putting a message out there to serve people? Talk about why you as an accountant embrace, you know, social media and, and really putting yourself out there.
Bert Purdy: Yeah, LinkedIn is a valuable tool for me from business development, and I don’t even like that term business development. It’s building relationships and that’s what LinkedIn is all about. It’s a networking platform and that even has a bad connotation. So, we should just call it a relationship platform. And so, building relationships, getting to know people is has made my career rewarding and I’ve thankfully been able to use a software like LinkedIn pretty successfully to do that.
Caleb Stevens: Good deal. I would second all of that and that’s how we met a year or two ago is via LinkedIn, just was like, wow, this guy puts out a lot of really helpful content for bankers. And so, we’re trying to do the same here with this podcast and hope that we can have you back on next year to talk about what else has changed that’s unexpected or crazy in the environment. So, we’ll hopefully reconnect then.
Bert Purdy: Well, Caleb, thank you so much. It’s been my pleasure.
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