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Fifth Third CEO: 'Engage'
Employee engagement apparently is a subject near and dear to the heart of Michelle Van Dyke, president and CEO of Fifth Third Bank, Western Michigan.
Van Dyke, who is credited with recruiting, developing and retaining talented employees at Fifth Third, attributes her success to creating an environment where employees are actively engaged in their work. She discussed that topic with a group of business people gathered Tuesday evening at an event sponsored by Inforum, a professional women’s alliance with 440 local members.
“In a service industry like financial services, our business lives and dies by how well our customers are treated,” Van Dyke said. “Good customer service starts with engaged employees on the front line.
“Success comes from making sure that every person around you is able to use all of their talents to achieve not only the bank’s goals but also their personal goals. My vision for Fifth Third Bank is that every employee will love what they do.”
She said she articulated that vision five years ago.
Van Dyke pointed to a body of research conducted by Gallup since 1997 that has been documented in a book called “First Break All The Rules.” The research measured employee involvement and distinguished among engaged, not engaged and disengaged employees. The research showed that overwhelming contribution to an organization’s success comes directly from employees who are engaged in the work they do. She noted that Gallup found that actively disengaged employees actually hold back an organization’s performance.
How does a company or organization engage its employees? Van Dyke, who has been with Fifth Third and its predecessor, Old Kent Bank, for 21 years, said that through the years she has discovered three key factors to employee engagement. First, an organization has to know its own values and those of its employees. Second, it must communicate clearly and constantly. Third, it must provide a challenging and rewarding work environment in which top talent can “fly.”
“Knowing what front-line employees face on a daily basis keeps me focused on providing all employees — from entry level employees to executives — with training, support, positive feedback and the sincere appreciation they need to stay engaged with the company,” she said. “One of our keys to successes has been developing leaders who have taken on opportunities across the company.”
Van Dyke pointed out that 45 West Michigan employees were exported to other Fifth Third affiliates last year.
“Imagine my pride when my employees are tapped to be president and CEO of our central Florida affiliate; senior vice president of retail for south Florida, Indianapolis and Tampa Bay; senior vice president of business banking in Cleveland; and a CFO in Tampa Bay.”
It may be tempting to believe that as long as employees are paid well, they’ll be engaged. But despite that widely held belief, Van Dyke said she knows that paying employees fairly for their work is just the first step.
She said spending four and a half years on the front line in the branch network helped to frame her career passion to motivate employees to improve customer service.
“When you’re selling a product like a checking account that has little to no differentiation in the industry, what differentiates one bank from the next is the service that the employees provide,” she said. “I try to stay very close to our sales staff and keep in touch with the pressures that they face daily. I make joint customer calls with our commercial relations managers. I take sales staff to lunch to find out what they’re seeing in the business. It might surprise you to know that I still work occasionally in the banking centers.”
On a recent Christmas Eve, for example, Van Dyke worked as a teller at one of Fifth Third’s Grand Rapids branches. She said she knew it was going to be a busy day there with all the retail merchant traffic expected, and she figured they’d need an extra hand.
“Imagine the staff’s surprise when I walked in and took over the drive-thru window,” she recalled. “I walked away that afternoon with a renewed understanding of what we ask our customer service representatives to do day in and day out. And the impression I left with the banking center staff was one of gratitude.”
What customers deserve and expect, Van Dyke said, is a smile, a responsive attitude, a willingness to help and an ability to solve problems. As a leader, she said, it’s her responsibility to provide training and feedback and to ensure that employees know how much she, personally, and the organization as a whole appreciate what they’re doing.
According to Van Dyke, employee engagement boosts retention, and that’s good for the bottom line, too.
“Consider that the cost of turnover is millions of dollars a year,” she said. “When you factor in training costs, loss of productivity, loss of knowledge, loss of revenue and replacement costs, the cost of employee turnover can range from $80,000 to $130,000 for a single sales or managerial position.”
Those are just the hard costs. The soft costs — like effect on morale and reputation — add even more, she noted. The loss of a key employee can mean the loss of a customer, and, in the banking business, the cost of one lost customer can range from $8,000 to more than $60,000. Satisfied customers speak positively about the service they receive and that brings in additional business. Unhappy customers take their business elsewhere and tell, on average, eight to 10 others about the company’s poor service, Van Dyke said.
“Keeping current customers is much more profitable than sourcing new ones. For every customer that we lose at the bank, we need to sell 10 more accounts to replace that profitability. If you take care of employees, they take care of customers, which, in turn, takes care of shareholders.”