A Pathway to Excellence
Tamalpais Bank puts excellent customer service first.
NorthBay Biz, May, 2007 Issue
When most consumers are asked to consider examples of excellent customer service, popular and high-profile giants like Nordstrom, Singapore Airlines or the Four Seasons Hotel chain often come to mind. Rarely does a bank (national or local) make the top of the list. On television and in the movies, banks are almost always stereotyped as uncaring and bureaucratic institutions with long lines, apathetic tellers and executives just itching to make you jump through hoops to get a loan—all while tagging on hefty charges and hidden fees. But Tamalpais Bank in San Rafael is out to change all that.
Originally founded as San Rafael Thrift and Loan in 1989, the financial institution opened for business in 1991. In 2004, Tamalpais Bank (under parent company Epic Bancorp) went public. Today, it has seven branches, 68 employees and is one of the fastest-growing banks in Marin County over the last five years. But more important than its history or Morningstar profile, Tamalpais Bank is on the path to becoming a quality leader in community banking.
The Malcolm Baldrige Quality Award
“We started to realize that, to be prepared for continued growth, we needed to focus more energy internally on company structure—business processes and benchmarking—as well as on the customer experience,” says Mark Garwood, president/CEO of Tamalpais Bank and Epic Bancorp, director of Epic Bancorp and vice chairman of Tamalpais Bank. “The first thing I did was bring the management team together to devise a framework that could help a company of our size become more customer-centric.”
Enter Erwin Martinez, Tamalpais Bank’s chief information officer. As fate would have it, Martinez had, in a previous position with a much larger financial institution, visited Los Alamos National Bank in New Mexico a few years earlier. Los Alamos is the only community bank in the United States to have won the prestigious Malcolm Baldrige Award for quality.
The Baldrige Award, which was first established by Congress in 1987, recognizes U.S. organizations “for their achievements in quality and performance.” Presented by the president of the United States, winning companies are deemed to be outstanding in seven specific categories: leadership; strategic planning; customer and market focus; measurement, analysis, and knowledge management; human resources focus; process management; and results.
Martinez saw firsthand how Los Alamos Bank’s participation in the Baldrige Award process impacted the bank’s overall culture. After months of discussion with both Los Alamos Bank executives and several consulting firms that specialize in helping companies achieve the Baldrige Award, Garwood and his team decided to pursue the award as a way to grow the bank while focusing on internal and external excellence.
More important, Garwood concluded the most critical factor in the success of the undertaking would be a strong leadership team to spearhead the activity—a leadership team that doesn’t just talk about change, but is an active change agent. With this in mind, Garwood presented the Malcolm Baldrige Award plan to his board of directors at the company retreat in 2005.
“I received 100 percent support from my board of directors and senior managers,” says Garwood. “I knew then we had overcome the biggest challenge to implementing a program like this.”
Emboldened and enthusiastic, the group took the initial steps toward achieving a Malcolm Baldrige Award. The end goal? To be the second community bank in the United States to receive the coveted award. The estimated time to achieve this objective? Three years.
Quality improvement teams
With support from the top secured, the next challenge facing the bank was to integrate the Baldrige program into the day-to-day workings of the organization. For this, Garwood turned to Karry Bryan, a senior vice president and Tamalpais Bank’s chief accounting officer. Bryan, who’d been with the bank for only a year and a half, had no prior experience with the Malcolm Baldrige Award. Undaunted, she immediately formed a steering committee comprised of a cross-section of first vice presidents within the bank, including the loan department, underwriting and human resources. The steering committee met weekly to evaluate areas for improvement and monitor the successful implementation of all agreed-upon projects.
Borrowing a longstanding convention in the quality process movement (popularized by consulting gurus Drs. W. Edwards Deming and J.M. Juran), Bryan suggested using “quality improvement teams” (QITs) to involve staff in identifying and solving both internal processes and customer service issues. Bryan instituted a simple system, in which all members of the steering committee would have two or three QITs reporting to them. Bryan then turned to the employees to determine what the QITs should focus on. Every Friday morning, an hour before the bank opened, Bryan gathered the employees in the corporate boardroom at the Northgate Branch for a brainstorming session.
“We would discuss a list of things that we needed to work on as a company, and we wrote everyone’s ideas down on large Post-it notes,” says Bryan. “Eventually, we covered almost all the walls and windows with ideas on how we could improve things.”
At the end of two months, the steering committee reviewed the lists generated by the employees and identified 18 specific topics for quality and service improvement. Topics including operational efficiency, market expansion, product innovation, employees as assets, turnover reduction and service excellence were each designated a QIT made up of a mix of managers and staff (all volunteer), who worked together to solve the issue. Today, of the 78 people employed by Tamalpais Bank, 80 percent serve on a QIT—and countless improvements, from the significant to the simple, have been implemented.
And, it’s not just the organization that seems to be benefiting from the QITs. They’re also providing an opportunity for individual employees to contribute and grow. Jenniffer Ernst, a client relationship manager with the bank, volunteered to head up the QIT on after-hours activities. “My QIT is in charge of planning events to give our staff a chance to get to know each other better,” says Ernst. “We’re growing so fast that it’s important to have fun activities outside of work, such as our holiday party, picnics and bowling night. Our next project is creating a bocce ball team.
“I’m not a party planner,” she says. “I’ve never done anything like this before. Even when I got married, my husband took care of the wedding. Being on this team has brought out a whole different side of me, one I really didn’t know.”
Ernst is quick to point out that management’s underlying support is making the most difference: “I came from a large, national bank, and one big difference here is you can go straight to the decision maker. Mark Garwood has an open-door policy. He’s right there, rolling up his sleeves and helping us figure out how to solve problems.”
Customer service standards
A recent J.D. Power and Associates Retail Banking Satisfaction Study (based on responses from more than 12,000 households regarding experiences with their primary banking provider) determined transactions have the greatest impact on a customer’s overall satisfaction or dissatisfaction with their bank. “Banks certainly face a challenge in today’s extremely competitive market, in that customers crave the convenience of banking online yet still also require a personal touch,” assesses Jeff Taylor, director of the banking practice at J.D. Power and Associates.
According to the study, while customers appreciate the convenience of online banking, those who visit the branch less often tend to demonstrate lower satisfaction levels. “Overall, customer satisfaction and commitment are closely entwined,” Taylor continues. “Satisfaction is what banks can control.”
Mark Garwood agrees. “The North Bay market is composed of small community, regional and national banks. At certain segments of the market, we’re all competitors.
“Our goal is to continue to build a brand that’s focused on the customers and their experience. That’s a strong differentiator—as opposed to leading with a price point.”
Recognizing the importance of customer experience to the bank’s overall success (as well as its considerable weight in the Baldrige Award criteria), Garwood asked Bernie Baguio, Tamalpais’ manager of customer service, to head the QIT on customer service standards. She quickly involved the staff by surveying the entire company “American Idol”-style, providing a list of more than 40 service standards and asking each employee to “vote” for their top 10 most important choices.
“People welcomed the opportunity to get involved and give an opinion about what our standards of customer service should be, instead of just having things handed down to them,” she says. Some of the “stars” that made the final list included:
• Own and immediately resolve customer problems;
• Create an environment of teamwork and lateral service so the needs of our customers and each other are met; and
• Continuously seek opportunities to innovate and improve the customer experience.
From company to community
Beyond all the efforts Tamalpais Bank is making to improve its company culture, equally as impressive is its commitment to the community at large. Toward this end, a QIT was formed to focus on making the bank green. Dan Marvier, an accountant with Tamalpais Bank, heads up the green project QIT and admits that, at first, he thought of it as just more time he had to put in every week. “But after a while, the deeper I got into this, the more I liked it.”
Marvier started by doing some initial research on the Web and came across the Green Business Program on the Marin County website. “Our team decided we wanted to go beyond the basics of recycling and installing efficient lighting to become green certified,” says Marvier. This meant completing the Program’s 14-page checklist. Marvier and his QIT brought the idea to the steering committee, which agreed it was a worthwhile project to pursue.
The results? As of March 2007, all seven branches have been certified green.
Marvier says while this is obviously a great thing for the bank and the environment, it’s also been personally fulfilling for him and a true team effort. “I’m proud that I did my part by helping to get the Northgate Branch certified first,” he says. “But the branch staff at the other locations have embraced this goal wholeheartedly and deserve credit for carrying this through to the rest of the bank.”
Of the 70-plus suggestions for improvement the QITs have come up with since the inception of the program, only one has been rejected by senior management (the suggestion involved printing debit card holders with room to record transactions). The rest have gone from idea to action, strengthening the loyalty of staff and customers along the way. With the success of the QITs firmly in place, Bernie Baguio says the next big hurdle is improving operational efficiency. To do that, the bank is planning a step-by-step breakdown and review of its processes, including input from employee and customer focus groups and surveys. Other plans include encouraging more employees to take advantage of the bank’s community outreach program. “We allow non-exempt employees up to two hours of paid volunteer work per month,” says Baguio. “Currently, 30 percent of our employees take advantage of this. Next year, we want to raise that to 50 percent.”
Jenniffer Ernst feels the bank’s goal to expand staff participation in the community will have a positive personal impact on the employees. A mother of four, Ernst uses her time to volunteer at Dixie Elementary School where her children are enrolled. “It’s made me a happier person,” says Ernst, who often gets positive comments from other parents on how much time she spends at the school. “That makes me feel good, and I work even harder.”
Tamalpais Bank is 11 months into its pursuit of the Malcolm Baldrige Award. Garwood estimates it will take another two years before the bank will be ready to apply for the award at a state level, and another year after that before submitting the bank as a contender in the national award competition. Whether Tamalpais Bank will go on to become the second community bank in the United States to receive the Malcolm Baldrige Award remains to be seen, but in every way that counts, it’s already won.