September 03, 2017
On a weekend trip to Chicago this summer, a Michigan woman named Anne lost her wallet. She called the bank in a panic, hoping to cancel her credit cards. Anne talked to several people at the bank, who coordinated their efforts and quickly shielded her accounts. “Everything was handled in an hour,” bragged the bank’s Michigan market president, Matt Elliott.
Elliott told me about Anne’s experience to illustrate Bank of America’s focus on customer and community service. I thought it was a perfect anecdote for this column, except for one little fact: Anne is your wife, I said. “Are you really confident that would have happened for the wife of anybody?”
“Oh, yes,” Elliott chuckled. “There was no special flag that this person is related to the market president. And yet it was handled with one phone call — and when I think back five years ago when I joined (the bank), would that have been one call? Probably not.
“What keeps Elliott up at night is worrying about whether Bank of America is moving fast enough toimprove the financial lives of its customers and the financial straits of its community. The answer is as elusive as a lost wallet and bigger, even, than his bank’s bottom line.
During an interview in his Farmington Hills office, the latest in a series of conversations I’m conducting with business leaders about their biggest worries, Elliott said his focus comes from the top, where CEO Brian Moynihan charted a new course after the 2008 financial crisis. A decades-long strategy to grow at all costs gave way to something called responsible growth.
(I edited our chat for length and context.)
What keeps you awake at night?
The easiest way to think of that is probably in the context of the framework that we use to run our company … We have to be sustainable, so part of being sustainable is being responsive to all your stakeholders, so the lens we think through for that is “ESG.” You’ve probably heard of that.
Yes, but please explain.
It’s the new version of … corporate responsibility. So the “E” stands for environment. Are we good stewards of the resources that we use, and do we help enable the green economy grow through our commitments?
The “S” stands for society and how you respond to society or the community that you serve — and for us that starts at home, making sure that we are the employer that we want to be. So we added, for example, another four weeks of leave to our parental leave program, so that now it is 16 weeks.
For a mother or a father?
Mother, father or adoptive parents (get) leave.
It’s not paid leave, obviously.
Oh, it’s paid?
All 16 weeks are paid. Minimum wage for the company is $15 an hour. We are supportive of the community. We can only be as successful as the communities that we support, so that means: Are you engaging your community not only through philanthropy but volunteerism? Are you sharing your knowledge to help people? We do a lot of financial education, for example. Everyone has a need to have more tools around money and finances.
The “G” of ESG is governance: Does all this stuff have teeth and do you have a framework to use these concepts to run the company? We do.
Let’s pause a second on the “S” part and poke a little bit at that and the parental leave. How much does that cost you?
On the P&L, I really don’t know, but from an employee standpoint it pays for itself pretty quickly.
Because it attracts and retains the kind of people that we want.
What kind of people do you want?
We want people that believe in the company, but we also want (them to be) the best that they can be in each of those segments. The world is more complex than it used to be. … The world is more diverse than ever, not only from a racial point of view, but (from a) family construct: LGBT, and all of those things. It’s family leave. It’s parental adoption. It’s maternal. It’s paternal.
But this isn’t a social experiment you’re running. It’s business.
Right. But there’s the … question you’re going to ask a lot of people in my chair. (The question) that keeps them awake at night. They’re going to talk about how they’re trying to attract and retain their people.
What happens when those values come into conflict? There has got to be times when they do — when the ability to improve someone’s life comes into conflict with the bottom line.
How often does that happen, and how does a leader handle that?
It happens frequently (like when) you want to improve someone’s financial life — let’s say by making a particular loan — but that may not work for the risk framework. … If you run the company sustainably, you realize that the money that we would be lending out is yours: If you are a customer of ours, do you want me to make that loan? No, I would not think that you would want me to make that loan with your money.
Sometimes, there is not a clear black-and-white answer, but by identifying it, debating that conversation, debating that particular point and making a conversation using the framework as a guide, there is the best answer we can get to.
New topic. If I am a business owner who is constantly complaining about my lack of access to capital, what’s your advice for me?
Let’s find out what your needs are and let’s get you in the right home. I talked to business owners about this all the time: If you are looking for startup capital, a commercial bank is probably not the right place to be, but there are places … that are there fully equipped to help through that phase, so as you grow and develop then we can hopefully make you a loan when you have cash flow that we can lend against.
So your first priority is finding them the right solution, even if it’s not your bank?
Yes, let’s get you in the right home.
Related question: Do you think this state’s economy is diverse enough?
It’s more diverse (than it has been) and I think time will tell, but I do feel like we are running towards more diversity and not away from it. This is one of those what-keeps-me-up-at-night things.
Compared to other states, you mean?
Yes, compared to other states, those are bottom quartile, and when I look at municipal and state-level finances (I wonder) how are we going to be able to fund all these liabilities that are sitting at the state and county level? I don’t know.
Each one of those issues is important not only to your community and to your family, but to your business?
Yes. I think what’s behind some of the resentment of big organizations … is a lot of people believe the economy is a zero-sum game, and it’s not.
They have been given good reason to think your industry is zero-sum game.
I think too many people have had (bad) experiences, but in the real life of our business … we can only be as successful as our clients. It’s a true definition of a win-win.
What is the most important part of your job?
Communicating the “why.” Owning that and understanding it and communicating it and making sure that the leaders that work on my team feel like they can communicate it too.
Communicating it a lot and demonstrating it and living it. It’s one thing to say it, but they also have to see it.
How do you live it?
Number one by doing the things that I know my boss wants us to do, but also doing it authentically.
What are large and small ways you can manifest or authentically do what your mission is?
Probably one of the best examples: My mom was in the hospital last fall (and) the people at the hospital … found out I was a banker, so once in a while someone would pick up a conversation around a financial issue and I was more than happy to help somebody out with that, even though no one was watching. But from my point of view, it was important to do that. Those are the little things.
The big things are the moments that matter when you have to make a hard decision and you actually use the principles or someone has made the hard decision and they use the principles and you back them up so you reinforce them. Those are the big ones.
How important is humility in leading an organization like this?
Humility is important in any organization. I think it is important to listen first and talk second.
I was struck by a small thing when I arrived at your offices: You met me at the door. I’m assuming that wasn’t by accident?
No. You are our guest and we are happy to have you here. It’s my job to reflect that.
This article can be found here and was written for Crain’s Detroit Business.