Data-Powered Decisions with First National Community Bank

All right. Hello everyone. Thank you for joining us for our customer interview webinar. We are very excited to welcome Tom Lunny, Senior Vice president of First National Community Bank. In today's discussion, we will cover topics like managing big picture goals, achieving organizational buy in, and adapting to challenges in a dynamic environment. Interviewing Tom will be Ted Jackson, co founder of Clearpoint Strategy. The audience will be muted for the duration of this webinar. However, we do encourage you to write in any questions in the Q and A tab. We hope you all enjoy. Take it away, Ted.

Thank you, Jenna, and welcome. Tom, really excited that you're here today. Why don't you just start by giving us a brief overview of FNCB and your role at the bank.

All right. Great to be here. FNCB is a community bank in northeastern Pennsylvania. We were chartered in 1910. We are a small community bank, $1.7 billion in assets. We operate 16 retail branch facilities over four counties within Pennsylvania.

Excellent. And what is your, what does your performance management system look like today?

Our performance management, what we do is from the standpoint of how we look or from a strategic planning standpoint. What we do is we meet as a group, from our executive management down to our middle management. We collectively get together on a quarterly basis and we sit down and discuss what our long range options, what we have given in two to three years. So from the performance side of it, we have specific metrics that we look at in saying that, you know, in 2014 or in 2024, 2025, where do we want to be as a community bank?

And so you're, you're taking those goals and sitting with your leadership team, or it sounds like kind of two levels and on a quarterly basis just saying how are we doing with, with getting to those goals? How many goals do you, do you have? Like, what do you discuss as Right.

Let me back up a little bit, Ted. From the standpoint of what we do in the fourth quarter of each year, we sit down and that's when we'll, we'll build, will build our goals. We currently have 35 goals that we're looking to accomplish over the next two to three years. But the way we look at it is we look from our strategic planning perspective, our goals are, it's a living and breathing document. So we may collectively come together and say, here's what we want to accomplish. Those goals are very fluid. As circumstances change in the banking industry, certainly we have to be nimble and be able to adapt to them. So what we do annually, we Sit down and try to create our goals. And then on a quarterly basis, we'll get together again and see if our goals are still applicable. If we're on schedule to accomplish those goals and we go from there.

So like in a dynamic banking environment, you may change your goals within that year. So you start, it sounds like in Q4, but you may end up changing the emphasis or your focus 1/4 in or 2/4 in. If there's been a change in the, in the out in the outside world.

Absolutely, that, that's the case. We want to, like we said, we want to be fluid. We want to be able to adapt to circumstances. Typically, if history is any guide from our side of it, what we decide to accomplish in those 35 goals that we currently have, we're pretty much staying by them because they're, they're high level goals. From a financial performance perspective or from a leadership and development kind of perspective, we will pretty much stay with them. But you know, there's been an emphasis in the banking industry over the last several years with regards to digital banking, for example. Now, from our side and with our customer base, we're probably 95, 94 to 95% digital. So that's a big part of what we want to maintain that, I guess, that experience for our customer, making sure that we're providing the latest and greatest in the digital sphere. And certainly that's one thing that, that's constantly evolving.

And so for these 35 goals, do you have like, tell me a little bit more about like how the reporting works. Like, do you have individuals that own these goals? Like, how do you, how do you think through pulling together that quarterly report.

What we do from the standpoint of our management team, all the primary reporters for each one of these goals are as an executive management member. And we collectively decided to run it that way because for any strategic plan be successful, you need buy in from the top. So what we do from our end, we'll assign a specific goal. If it's leadership and development, if it's developing our staff or trying to provide our staff with more resources in order for them to perform their job a little bit better. Actually, our senior vice president of human resources was the person assigned that particular goal. Now, from that end of it, she enlists various people throughout the management team in order to assist her in accomplishing whatever goal that was assigned to her.

So she's got the goal, but she'll reach out to other people to say, can you update this measure that supports this goal? Are these activities that we're doing or.

Things like that, she'll reach out. She would not be able to. The way we structured our plan, the goals that we have are pretty high level and it's impossible for any one person to take the goal and do everything themselves. So the primary reporters have staff underneath them and it doesn't have to be necessarily direct reports to them. It could be anybody organizational wide that would be best fitted in order for us to accomplish that goal.

Okay, and you're doing this in clearpoint, so do you like explain how that process works on a. On a quarterly basis, just in simple terms? We don't need to know all the details.

Well, what we do is we meet on a quarterly basis, physically on site to discuss it. But from our clearpoint reporting side of it, we have it set up in an automatic workflow. So our primary reporters will report monthly on their goals. The way we have it set up currently is we want a narrative from them and it doesn't have to be chapter and verse, but just a high level overview of where they're at with regards to their particular goal. A lot of the goals that we set up are not goals that can be accomplished in a month or two. These are 12 to 24 to 36 month goals. But we want to make sure from the monthly reporting standpoint that we keep people on track, that it's. We all have our normal duties that we do each and every day. From the strategic planning side of it, we know these are above and beyond what people do on a daily basis. These are items that bring the bank forward to make us bigger, stronger, bigger, stronger and faster. I guess is. But yeah, it's a monthly basis. And from the standpoint of your system, from the clearpoint perspective, in my involvement, I'm the administrator of this, of the system, so I would. We have it set up and working with, with members from your team. We set up reporting workflows so they actually are system generated where I don't have to go in and initiate it. It's automatic. The time periods for our people to respond, the deadlines are automatic and the system provides reminder notices. So if it's getting close, let me back up a second. We'll send the reporting workflows out on the 1st of every month. Our members are primary reporters and Our team have 15 days in order to provide updates for that particular task. After eight or nine days, the system will send them a reminder saying we didn't get anything back from you yet. Can you please go in and take care of it? But the good Part about that is we have a. Our team is pretty committed and they're excited about getting things done that we want to get done. And the reminders are nice but not always needed.

Right. So what were you doing before clearpoint?

Before clearpoint, it was. It was an Excel spreadsheet. We put an Excel spreadsheet on a shared drive and members went in and updated, updated their particular rules and it was, it was not the most efficient way in order to operate.

So how much time do you think you save now with clearpoint?

I know from my side, but who's been working on administrating our strategic plan over the last couple of years? It saved me a tremendous amount of time. I can't put a actual time frame on it, but if we did our homework up front, we repopulated the system up front and certainly we have to go in periodically and tweak it. But from my side of it, I save days, a quarter from that side of it using the clearpoint strategy versus the Excel spreadsheet.

Yeah, that's great. I think even when we spoke a few weeks ago, sounded like there were multiple people even involved in the report, the prior reporting process. And now you can manage it, just individually managing the workflows?

Absolutely. There was one other person that assisted. We worked collectively on our strategic planning side of it, and now we were able to just have one administrator and it works out well or so that's great.

What about the, the quality of the reports? Like, do you feel like, you know, so it sounds like people make their updates monthly. Do you send out a report monthly and then just meet quarterly so everyone gets it in their inbox monthly, or is it just a go look at it online monthly?

We know I do send out the reports on a monthly basis only for the fact that there are. The system allows for requests for modification. So from the standpoint, if we, if our goal, if our goal changes somewhat, or if our, if our milestones assigned to each of our goals happens to change, our reporter has the ability of going in and changing or requesting a modification. In turn, I review those modifications with our executive management committee and we decide if we're going to accept it or reject it and go from there. We try to stay pretty focused on what we try to accomplish. With that being said, we give our people the flexibility because we know that circumstances change. And if you want to get something accomplished by a date certain and that date is coming past flexible enough in order to provide for a modification for that particular milestone associated with one of.

Our key goals, Right, okay, very cool. So you have 35 goals now. Like have you always been kind of right in that range of 35 goals? I think your goals are organized into kind of key areas, like six different areas. Like has that evolved over time?

That has evolved tremendously over time. What, what we did when we originally got into the, the clearpoint software we had and I'll go as far as last year. Last year our strategic plan had 155 goals that we wanted to accomplish over a three to five year period. Now we sat down collectively at the end of 22 and the consensus from the, from the group was that we had entirely too many items. We were focusing on entirely too many things and the items that we were focusing on quite honestly didn't rise to the level of a strategic plan initiative. So what we decided to do was to make it a little bit more manageable to up our goals from the standpoint of having a higher quality. Yes. Less quantity goals. So we went from 155 and 22 down to 35 right now. And it's much more reasonable from that end. It's more manageable, I guess as a. Is a better, better word for it.

Right. And how did you. So this is a question coming in from the listeners with so many goals. Like how did you prioritize some over another. Like did you have, you know, there are some just department wide or some kind of across the entire organization.

How do you think through that when we collectively met the big picture, Looking at the big picture side of it and trying to prioritize what goals we are going to have or not. We looked at it from the perspective as where do we want to be in three years? What is FNCB bank going to be looking like in three years and where we want it to be. So from the standpoint of looking at any business, banking and any other business, a financial performance. Performance is obviously a key goal. So what have you made in the past and where do you want to be in the future? So we just looked at it from a priority standpoint as what is the goal going to move the needle is it's when somebody. And we're very collaborative and we encourage everybody to speak. There's no, there's not a bad idea. But we collectively sit down and we look at it and we say okay, somebody may make a suggestion for a particular goal and we may, we'll collectively think about it and say yes, that is important but does it need to be included from our strategic plan side of it? They could certainly pursue that particular item outside of the strategic plan side of it. But we just want to keep it as at a high level, something that is get the, you know, the biggest bang for our buck.

Right. And so in that collaborative process, I mean it sounds like we haven't really talked that much about it, but you kind of have six big buckets, so to speak, key goals. And then when you let everyone bring their ideas into, they kind of get put in those key buckets and then you prioritize down from there or we do.

Out of our executive management team, we have, we have six members that are the, we call them our pillars, our six pillars. And we have an executive manager who is assigned to that particular pillar. An example would be. And I'll give you a couple. They're not, it's not, I'm not giving any inside baseball here. Customer experience and growth, that is one of our key pillars. So we have, our biggest mantra is from our mission statement is to enhance your banking experience, to make your banking experience simply better. So the pillar owner, that's his mandate, he's got to go, well, and what do we do from our side of it? What can we do to make our customers banking experience simply better? Another one would be our enterprise risk management pillar. Every business has a risk in our particular site. In the banking industry we're highly regulated. So there's a number of items that we have to make sure that we are complying to all regulations, risk with fraud, bank fraud and everything else that comes along with that side of it. So we certainly look at our pillars and make sure that we are, we have goals within each of those pillars that will make sure that, you know, the overall improvement of the pillar is achieved.

Right. That sounds great. And it sounds like your executive managers can kind of make sure there's a well rounded group of goals within there. Right. Five or six or something like that. So we got another question. Do you have any data feeds that automatically populate measures or is everything manually entered?

You know, in Clearpoint, everything is manually inputted in it. What we do from the standpoint of what we try to rely on from the standpoint, I think I know where the question is going. From the standpoint of our financial performance side of it, we try to marry our budget with our strategic plan. It has to be married. So some of our key objectives from a financial performance side of it, we just write in where we're at. We'll type in that, hey, from a return on asset metric or from a net income metric or from a just an asset Size metric. We'll put a paragraph in as to where we're at currently. And right next to it, we have our objective as to where we want to be. But we currently have no data feeds in going directly into clarity.

So any charts that you have in there, someone's just manually putting in historic information and it would build that way.

That's it. They can, they have the ability. There's a pillar that we have that one of our users is monitoring where he would drag a, what he has. It's either a word or it's some sort of table where he actually provides updates on several of his items and all he does is cut and paste it into the software product each month and that works out fine.

Gotcha. Okay. Did you have any challenges getting buy in to this overall process, the monthly reporting and the quarterly meeting?

We, we, I would say that the people that were involved from our bank presidents on down, they were involved right from, right from the beginning. And you certainly get buy in when you have your, your president and CEO sitting right next to you saying that hey, this is what we should do. We, our group, our management team is, is, is pretty progressive, although we have a lot of legacy people. Like I said, I've been here 37 years, but I'm not set in our way. And I think our whole management team is not that they're not willing to look at opportunities to make things better, but from, I think our entire group, they were excited about it. They certainly offered their input and they want to promote the bank and obviously make us perform better. But everybody bought in from the standpoint of using the system and getting orientated with it, that took a little while from everybody getting comfortable from that side of it. But the buy in of using the system and monthly updating their system and participating in our quarterly meetings, that's all been pretty good. It's all been very good, actually.

Good. Would you say that that Clearpoint saved you a million dollars or like that you could, you could point to like having a structured process is driven some tangible results in the bank.

It was only three quarters of a million. It wasn't a million, but it certainly helped. It certainly was a tool that we feel that helps us do our job. It certainly documents the job that we're doing from the standpoint that it made us a little bit more efficient. Without question it did. We've been doing strategic planning long before clearpoint was probably in existence, as probably everybody on this call has done. We seem to over since 1910. We survived since 1910 without Clearpoint. But with Clearpoint, it certainly helps us moving forward for the next hundred years. Hopefully it's going to be that long with you, right? Yeah, that'd be great.

Do you, do you create like, do you use the tool for collaboration across departments? I'm just trying to think about those six pillars and executives with different information kind of pulling in like just. And we don't need to talk clearpoint specifically, but just more like the way your process works overall. Does it, does it engender a lot more collaboration kind of across the organization?

I think it definitely does. What we, what we did, and it's a little change from what we did, from what we did last year. We certainly have our primary reporter. And from my perspective, that's who I go to with regards to updating, updating the particular goal. But the system provides for fields for other members within a particular goal. That certainly would help in trying to accomplish the goal. So although we have 35 people reporting on 35 goals, we have probably from a primary and a secondary reporter perspective, we have over 100 people, which is good because I'm on a couple of goals and I enlist other individuals not only within my department but within other areas of the bank in order to help me accomplish my goal. So we try to look at it from the span. The more perspective we get from all of our members, the stronger we feel that we're going to be. It's not Tom Hunting's perspective. It is the perspective of maybe eight or nine people within my mini team. And that in turn gets pushed up to the core leader group and it makes for a better product. So to go back, to answer your question with regards to collaboration, yes, it does promote collaboration within our organization.

Well, it seems like a great way to get everyone on the same page if you have 100 people all looking at and interacting with your strategy at some point over the course of that quarter.

Absolutely. The challenge with any business, including ours, is making sure that we communicate properly. And this system from prior to this system and going back and looking at that Excel spreadsheet side of didn't work the way it was performed. But from the standpoint of a communication side of it, with me sending out these monthly reports to our executive and middle management teams, everybody knows what everybody's doing. So there's no surprises down the road as to, geez, I didn't know that we were going in that particular direction. We keep it open for our entire management team to take a look at. And so from a communication side of it, you know, I Love that part of it. Because everybody, every organization has challenges with regards to communication and we're getting better at it from an internal communication perspective and certainly to clearpoint. The monthly reporting side of it has helped and the quarterly reporting has helped because you may send out a report and maybe they're not going to read it. But when you have to go to a quarterly meeting and present your findings, you know, you better make sure that you're aware of what's going on in the, in the whole body, not in your just particular area.

Yeah, it sounds, it sounds great. Like you really have a kind of a fully functioning kind of strategy management process. I have time for one more question. What would you say to someone who was, who was just getting started, you know, in this process? I know y' all have been doing it for a while, but let's say a kind of a new adopter trying to get strategy reporting up and running in their organization. What kind of advice would you give them?

The only thing that I would say would be that I'm a person that when I started it I want to get in and do everything all at once. But unfortunately my job doesn't allow me. I have six or seven or eight or 10 other jobs that I have to take care of on a, a daily, weekly and monthly basis. But when I got into it, I was a little frustrated from my end of it because I wanted to, to get a, a mastery of the program, of the, of the, the capabilities of the software. And you know, I, I would not put that much pressure on, on yourself. Let it evolve over time. I'm still learning things to this day. I certainly am not a master in the software side of it. I do rely on my account executive at clearpoint whenever I run into a brick wall. I try to figure it out myself, but certainly he helps me out as needed. And that's what I would just say, take it slow, find out where you want to be, how you're going to get there and then putting the components in order for you to achieve what you're trying to accomplish. The system itself is pretty open ended. It does pretty much what I want it to do. There's capabilities that my account executive had taught me and like I said, I'm still learning. But the bottom line takeaway is don't get frustrated. Let it run its course and take it from there.

Yeah, great, Tom, that's, that's very good advice. I think, you know, a lot of people start in different places, right. And so, you know, you don't need to worry about learning all the features in Clearpoint, you might only need this 40% of the features. And another organization might need different features based on the way they, they manage. So I really appreciate you taking the time today for this call. We try to keep these at half an hour and we are, we are out of time. So I greatly appreciate you taking the time to speak to us today.

Thank you, Ted.