Banking is ever evolving as are the demands of the leaders within the industry. The transformation underway requires digitalization, optimizing talent and continually looking for operational efficiencies. What can’t be lost in this evolution is the value of continually building and expanding customer relationships, developing team members and leading through change. While challenging, demonstrated leadership is critical to meet these demands and to achieve results.
Lars B. Eller (President and CEO of Farmers & Merchants State Bank) is one such leader who has a similar, yet highly inspiring, journey. He started his journey in 1988 as a management trainee at TD Bank. Soon, at a very young age, he was promoted to branch manager. This gave him plenty of opportunities to learn many areas of the bank from teller and bookkeeping to lending and investment management.
As he grew to different manager roles, he honed his leadership skills. Shortly, he had the opportunity to manage hundreds of people which helped him to lead and manage through others. Leading larger teams and more functional areas can be challenging, but it helps in sharpening and developing overall leadership skills.
A Listener and an Observer
During his 35 years of experience, he had several opportunities which helped him to take new roles every two to four years, building his breadth and helpinghim grow as a leader. His immense experience in banking is spread geographically in places like Ohio, Pennsylvania, Massachusetts, Toronto, and Montreal, Canada. Lars took over as President and CEO at Farmers & Merchants State Bank in September 2018. This was his first role as president and CEO. However, this does not let him stop his process of continuous development and growth as a leader. Utilizing his previous experiences and knowledge, he has numerous accomplishments under his hat. He targeted acquisitions helping the company to grow its assets to over $2 billion.
Furthermore, Lars’s rich experience in the industry allowed him to become a much better listener and observer. Sharing his experiences, Lars utters, “I’ve come to understand who and where the real influencers are in a business or department. I take the time to understand people and what is important to them and to build personal connections. I also believe there is a real skill in realizing and managing momentum, both positive and negative.”
Tackling Challenges With a Unique Lens
F&M distinguishes itself from others by its commercial lending strategy. The company includes a very talented team that includes lenders with more than 20 years of experience. This experience allows it to win $2M-$9M loans from the super-regional banks that rely on call centers and inexperienced branch managers for this lending. Nevertheless, challenges are an inevitable part of every business model. One such challenging situation faced by F&M was the tenure of the senior leadership team.
Alike any organization, senior leadership is a vital strength of the organization. Due to the tremendous experience and leadership skills, they have a huge impact on the team. However, Lars and his team at F&M faced a challenging situation of replacing the experience and allowing for knowledge transfer as people retire. The situation was excellently dealt by Lars with a combination of promotions and external recruitment to optimize the talent.. This improved the breadth and diversity of the senior leadership team. “We have a strong, diverse team. I am a true believer in empowerment. Give your team the tools and power to make decisions. Accountability is also important. Our team makes decisions, and they are accountable for the results of those decisions,” says Lars.
Pre and Post COVID-19 situations
While mentioning the challenging times, the recent outbreak of COVID-19 has trembled the majority of businesses from their roots. There was a need to strictly adhere to the required protocols to fight against COVID-19. “The challenge is that our customers, employees, and newly hired employees desire personal interaction. The need to reduce in-person communication limits one’s ability to gauge meaningful non-verbal elements,” asserts Lars. He and his team understood the seriousness of the situation. They moved quickly to ran the bank from remote locations while holding meaningful meetings and sharing the key information through multiple communication channels and videoconferencing. Furthermore, the company strengthened its pandemic plan by separating physical work areas, wherever possible and flexing its schedules to meets its customers’ needs.
The arrival of COVID-19 also opened new doors for the world. Overnight, the world went digital, though, this digital transformation was forced for the majority. The adaption of new technology such as complete digitalization is a slow process. However, the impact of digital transformation has been significant especially in the banking sector. It has helped the banking companies to speed to the customers’ needs while maintaining the relationships.
The inclusion of technology in the banking industry has leveraged it to develop the loan process and helped it in reducing the time to a few minutes now. F&M has a stronghold on the technological transformation which has helped eliminate process steps to gain efficiencies. It has significantly improved its mortgage turn time during triple volume and records production. The company has doubled its net income over the last five years; and built and are implementing a strategic plan that will help it grow to $3 billion by the end of 2022.
Vision for Post-COVID World
The year 2020 may have been exhausting but it highlighted the underlying fact—we live in a fast-paced, ever-changing world. The key to thrive is adapting to the change. Lars predicts that the new age of banking will be the unison of traditional operations and modern technology. Being in the banking sector, he also is looking forward to revolutionary tech additions like integrated teller machines, mobile banking, online banking, money transfer applications, like Venmo and Zelle, and remote deposit capture.
Lars’ prediction also outlines that there will be fewer brick-and-mortar branches, but some will always have a place in community banking. “People like to meet with a banker face to face when they have a major transaction. Everyone’s major transaction is different,” he concluded.
“I have adopted newer technologies and focused my own leadership development on continually adapting and helping those around me do the same. Agility is a necessity to meet expectations.”