Ownership
Matters
by Ted
Howard
Yes! A Journal
of Positive Futures, Spring 1999
Content:
Page
1 of 6
Introduction
Bill Marshall
is vice president of a Missouri bank's loan department where
he has responsibility for more than $80 million in current
outstanding loans. At times though, he comes across less like
a banker than a social visionary. Marshall is fond of saying
things like, "It really is not important how much the bank
trusts its customers; what is important is how much the customer
trusts the bank." And, "If we are going to make money in this
community, its important for us to give something back." And,
"This is one of the most challenging places I've ever worked,
and also the most fun. You
end the day with a great deal of self-worth."
Clearly,
the bank where Marshall works -- the Phelps County Bank of
Rolla, Missouri -- is a different kind of financial institution
than the one I use in Washington, DC. Where I deposit my pay
check, so many mergers and buy-outs have taken place over
this decade that I sometimes wonder what my bank's name will
be this month. My banking experience is about as intimate
as a stop-by at a Wal-Mart: not a single teller recognizes
me when I approach her window. These days, I mostly frequent
the outdoor ATM, being sure to smile at the video camera recording
my transaction. Welcome to banking in the 90s.
But
not so in Rolla, Missouri, population 15,000, home to an employee-owned
bank with close personal, professional and charitable ties
to the community.
CEO Emma
Lou Brent and her 60 fellow employees own 100 percent of the
bank through their Employee Stock Ownership Plan (ESOP). Over
the past decade, they've seen the bank's assets more than
double, and their outstanding loans nearly triple. In the
process, Phelps County Bank has surpassed in size the other
two banks in town.
What
sets the bank apart is the commitment of its owners to customer
service and satisfaction. According to Marshall, each employee
is given not only the responsibility but the authority to
deal with customer problems.
To ensure
the staff has the training to meet the needs of customers,
the bank has established in-house classes, and to round out
each person's understanding of the workings of the entire
bank, employee/owners go through cross-training days during
which tellers, for instance, sit with accountants. As a result,
employees are empowered to deal with customer problems without
having to clear their solutions with management. As employee/owner
Sherry Snelson puts it, "I can use my own good judgement.
Its
good for us and for the customer."
How
does all of this goodwill translate into the financial benefits
of ownership? At the Phelps County Bank profits are broadly
shared: all employees will likely retire or leave with substantial
stock holdings.
Today,
the average Phelps Bank employee's vested ESOP account is
worth more than a quarter of a million dollars, and growing.
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