It took an ill-fated merger for leaders at Atlantic Capital Bank to question their strategy. But the introspection ultimately led to a cultural overhaul and a greater sense of purpose for employees.
Four years ago, the Atlanta-based bank acquired First Security Group in Tennessee, roughly doubling its size and moving it into two highly attractive markets in that state, Chattanooga and Knoxville.
But it turned out First Security wasn't an ideal fit. It had operated as a traditional community bank serving small businesses, while Atlantic Capital primarily courted middle-market and corporate clients. The cultures never quite meshed.
By late 2018, the merger that was supposed to create what Atlantic Capital called the "premier financial institution in the Southeast" had become such a distraction to management and employees — and such a disappointment to investors — that the bank's board decided to sell the bulk of the former First Security operations in Tennessee and north Georgia to FB Financial in Nashville.
"Our people saw that we were spending management time and energy on parts of the business that were underperforming and were not core to our mission," said President and Chief Executive Douglas Williams. "We were investing capital in these businesses, and people were confused as to who we are and where we are going."
Still, Williams knew that it would take more than selling branches to fix what was ailing the $2.9 billion-asset Atlantic Capital. Employee engagement and morale were not where they needed to be for the bank to achieve its goals. He started working on changing the culture in 2017, bringing in business consultant Lisa McLeod to help reinvigorate the staff.
McLeod's method, known as "noble purpose," aims to help companies boost performance by instilling a customer-comes-first mindset in employees. It's an attitude McLeod said she inherited from her father, a former banker.
McLeod spent more than a year with employees, holding town hall meetings and focus groups to delve into their underlying frustration. What she found was what many senior leaders feared: Employees didn't know what was expected of them after the First Security acquisition because the reason for doing the deal in the first place had not been effectively communicated.
"I found Atlantic Capital was a positive organization, but there wasn't clarity where there should have been," McLeod said.
In August 2018, Atlantic Capital rolled out the strategy it developed with McLeod, becoming more purpose-driven. The changes it has adopted include new measures of success for employees. Their reviews now take into account how well they share information with and provide referrals to colleagues in other departments of the bank.
More Best Banks to Work For coverage:
Best Banks to Work For A paid week off to do volunteer work? First State's good with that Anatomy of a smooth leadership transition 1st Security's first impression of Anchor was lasting
The degree to which employees are helping to drive customers' prosperity is also part of the review process, said Annette Rollins, the chief human resources officer.
"People truly want to make a difference in other people's lives," Rollins said.
This heightened focus on employee engagement seems to be yielding the desired financial results. In the second quarter, deposits from continuing operations were up a whopping 24% from the same period a year earlier, and its commercial and industrial loans increased 15%.
The changes are also having a significant impact on the bank's ability to attract and retain talent. Rollins said that "turnover has decreased substantially" and that 30% of the bank's new hires have come from employee referrals.
"That is significantly higher than years past," she said.
Williams' leadership style, meanwhile, has changed profoundly.
Williams acknowledges that before he hired McLeod he managed to results and didn't take the time to get to know employees or what motivated them. He now holds quarterly conference calls with the staff and on each one he makes a point to recognize an employee who best exemplifies the bank's noble-purpose mission. He also sends handwritten notes to employees on their birthdays and work anniversaries.
McLeod's research, Williams said, helped him understand that people want to be recognized, and, even more critically, they want purpose in what they do. "We all want to identify with something that is more significant than ourselves," he said. "Banking is a noble business. We have a critical role to play in the efficient functioning of society and the efficient functioning of the economy."
