Leadership lessons from Cape Cod Five’s CEO
Cape Business will interview many of Cape Cod’s most prominent business leaders during the coming year for our recurring Inside Leadership feature. We launch this series with Dorothy Savarese, CEO of Cape Cod Five Cents Savings Bank.
The subject discussed was leadership – not purely management or administration, but that special instinct to lead large companies. Savarese shared what she has learned that can be of benefit to even the smallest businesses on Cape Cod.
What makes a good leader?
One hallmark of a good leader is putting the needs of the organization first, ahead of his or her personal goals and desires.
Most people agree leaders are in fact made, usually self-made. You apply yourself to learn skills of leadership: the discipline of hard work, learning your field, looking ahead and developing a strategic vision. You also must formulate a good set of values and create an environment where your employees and customers have confidence in you.
Then, you must master your external environment. You have to understand industry trends, your competition and customers. You have to evaluate your opportunities, threats, weaknesses and strengths.
These include the people in your organization, your company systems and your own personal strengths. You need to match opportunities to strengths and find ways to backstop your weaknesses.
When a company has completed its analysis of strengths and weaknesses, it must develop action plans to match them. Once goals are articulated, a leader must put in place management structures to enable the organization to get done what needs to get done. Then, it is critical to measure how the organization is doing. A leader must be sensitive to what is happening so he or she can adapt to constant change in the organization and in the marketplace.
A good leader sees deep within the company, but also views the world around it. For example, we say we are in the financial services business, not banking. Financial services encompasses all the needs of our customers.
How important is communication to leadership?
A leader has to enable the organization to find its voice and core values. If not, you will have different departments with entirely different objectives. When we talk about marrying outside analysis and inside analysis, it must be within the context of what a good organization wishes to achieve.
A leader helps people see where their efforts contribute to the organization. Clearly, communication is critical.
You lead a large company on Cape Cod. How is your sense of leadership applicable to a small business here?
We share the same mission: Identifying our customers, connecting with our customers and satisfying our customers. What you are going to remember from your experience with a company of any size is whether you were served efficiently. First and foremost, you must get the fundamentals right. Our primary goal is to meet our customers’ needs and make them feel we are here to serve them. We don’t mind leaving our playbook on the plane and letting our opposition see it because the key is how well we execute it.
The challenge for small businesses is that they wear so many hats. They have to not only know where they are going, but also execute effectively.
Whether you manage a gas station or small motel or a clothing retailer, you need to understand what your competition is on Cape Cod and on the Internet, what your customers’ preferences are, what you are defining as your niche and what your competitive advantages are. Then look at opportunities in the marketplace, determine your strategy and management skills, and monitor that for success.
Your tools might be different. Your computer system will be simpler, but you still need systems for good point of sales, execution and tracking. You need good accounting systems to see how you are doing. You need to effectively communicate with customers. Those leadership skills are the same regardless of size, scale and type of business.
Is being an effective leader different on Cape Cod than in Boston or New York?
I do not think so. I think it is the job of any good leader to understand the external environment. What is the environment here? What do your customers need? What are your employees looking for in terms of compensation and quality of life? Core competencies may be different in different environments, but skills are essentially the same.
What do you believe motivates your top managers?
On Cape Cod, there is a relatively self-selected population. We’ve chosen to move or stay here because we love the Cape. As a consequence, people take their jobs very seriously. They appreciate the impact a community bank has on the community. One of my executives, Mefford Runyon, describes it as a cause as much as a business. My senior managers can all make more money elsewhere, but they love what the company represents. They come in every day because they genuinely enjoy what they do.
How are they encouraged to be leaders?
Mostly from mentoring by peers as well as from me and from (former CEO and President) Elliott Carr – and through a commitment to self-development.
The key to leadership is tied to the idea of team. We ingrain in our managers that the best route to success is what’s best for the bank and its customers, not necessarily for an individual business unit. As a result, a significant portion of a senior leader’s compensation is tied to the overall bank’s performance. At lower levels, we have incentives to work effectively among other departments.
How do you measure your own success as a leader?
Typically, by the strategic objections we set for ourselves. If I moved the bank along, then I have been successful. Financial goals are obvious; we try to measure customer satisfaction goals. Strategic ones are relative to customer penetration and acquisition of new accounts. But it also relates to whether we have done a good job supporting our charitable foundation.
I must stay ahead of the curve, see the issues that are confronting the bank and work with the senior team to translate needs into appropriate actions.
A final measurement is employee satisfaction, which is determined by turnover and our ability to recruit. We’ve had a tremendous amount of growth in recent years. Do our employees feel empowered, comfortable with their working conditions? Do they feel they can individually move the bank’s mission ahead?
When you are a leader, to whom do you turn for counsel and support?
I feel blessed by being surrounded by people who are endowed with qualities and insights and are more than happy to share them. I think there is something to get from everybody.
Even though Elliott is retired, the wonderful thing is he is still accessible without being intrusive. I also have a senior management team that is thoughtful and conscientious. Board members have been individual sources of counsel and support. They are Realtors, attorneys, CPAs – all keenly informed about the bank and the Cape economy. They provide insight and perspectives – where we have been and where we are going.
What do you expect from your key staff and board members?
I want to surround myself with people who are willing and comfortable to say, “I am not comfortable where this is going,” and know there will be no penalties or bad consequences. An organization can be in peril if management doesn’t question the boss. I would rather have an overly critical management team than ‘yes’ people. The same with the board. I’d rather they ask too many questions than be a rubber stamp.
How important is a sense of humor in a leader?
Very. A lot of my sense of humor is self-deprecating. I use it as a way to break down concerns about relating to me, to break the tension in difficult situations. Work is supposed to be fun. However, it is important, especially in banking, that you keep it to appropriate circumstances because people are quite serious about their money and we are playing a very important role in their future. They need to know the leader of that institution takes her job very, very seriously.
How do you deal with stress and adversity?
Most of my stressful events I can’t share. Generally, I begin by gathering as much data as possible concerning the issue. I involve people who should be involved and make the best decision possible under immediate circumstances. Then, I try to get feedback on the decision as rapidly as possible.
What role does gender play in leadership?
There are some studies that show that women’s listening skills and empathy are suited to how a modern organization moves ahead. Diversity also contributes to a company’s strength. At Cape Cod Five, more than 50 percent of the employees are women. They are very encouraged that an insider was chosen and it was a woman. It’s helpful to be seen as a role model.
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