People skills, organizational excellence common among big-bank CEOs What does it take to run a billion-dollar institution? Are the leadership requirements for the head of a $1 billion organization different from the skills it takes to run a $100 million bank? Scale, ownership structure, organizational complexity and a workforce spread across multiple locations are all factors that a manager in a smaller bank might want to consider as he or she strives for a leadership post at a larger institution.

So, what does it take to run the biggest community banks in the Midwest?

'Versatility," is Harry Argue's one-word distillation. The president and CEO of the Graduate School of Banking at the University of Wisconsin in Madison described a blend of business performance and localmarket grounding by which CEOs "are attentive to the needs of the marketplace and can deal with their customers on a one-to-one basis, wherever possible." The best big-bank CEOs do not "become remote from their customers," he said.

But best intentions and the common touch may be no match for meandering branch structures and the mass of individuals involved. A chief executive in a billion-dollar bank can not be everywhere and may sit quite far away from many, if not most, of the bank's staff and customers. In these circumstances successful CEOs tend to combine exceptional business skill, including accounting-based financial firepower, with a talent for building effective executive teams and an ability to project their strategic priorities to the whole organization.

These leaders balance hard skills and soft skills, said Timothy Koch, president of the Graduate School of Banking, at the University of Colorado in Boulder. "The people skills-how well they work with people, how well they work with the board, can they identify people's skill sets, put the right people in the right job," are what "really differentiates the individual who is ultimately going to be selected as the CEO," Koch said.

Soft skills, hard decisions

Soft skills are more important than ever, said Charles Funk, president and CEO of the Iowa City-based MidWestOree Financial Group. In addition to leading an organization with $1.5 billion in assets, Funk teaches a course called "A CEO's Perspective on Bank Management" at the Colorado graduate school. A quarter of the coursework addresses the question "are you running a people company?" The primacy of people is emphasized in other areas of the instruction as well.

The "people piece" involves working well with executive committees and bank staff, the board, community contacts and media- to say nothing of audiences such as shareholders and customers. But it really hinges on judgment, the ability to pick the right people for the right jobs.

After showing his class a video interview of former General Electric CEO Jack Welch, Funk said he leads a discussion on the "importance of addressing non-performers." Funk refers to Welch's concept of false kindness, an unwillingness or inability to deal candidly and decisively with mediocre performers. "They need a fair chance to improve," Funk said, "but if they can't improve and they're in a key position, they need to be replaced or the company will never achieve its full potential."

Fact-facing and a focus on fit are among the most crucial personnel priorities a CEO can set. "I think the tough decisions usually come down to people. We let our emotions get in the way, and let's face it, Midwesterners are nice people," Funk said. "As a general rule we don't like a lot of conflict, and the easiest thing to do is look the other way," he said.

Ronald Kranz, chairman and CEO of the Fremont, Neb.-based First State Bank and Trust, also noted that even ambitious executives may not be prepared for the kinds of decisions a CEO faces. "It takes the right kind of person to want to do it, to deal with the personnel issues and make tough decisions," Kranz said. Given the complexities of the job "some people are just content to get to a certain level and stay there." (see First Person reflection on page 14.)

Decisiveness in setting standards and determination in conveying those standards through the executive committee or senior management are crucial leadership attributes. The president has to set the pace said Paul Bees, an executive recruiter and partner at the St. Paul, Minn.-based Midwest Financial Search, Inc.