Brunini Law

This spring, I returned to the wondrous fields of little league baseball and was fortunate enough to relive some of my happiest memories as a child through the eyes of my oldest son, whom I had the pleasure to coach. If you know me at all, you know that I love baseball, but I can’t think of any time in my life when I enjoyed it more than between the ages of 10 through 14. Those were the times when it was all consuming, but still just a game. When my every thought could be dedicated to it, but my stress levels were rarely raised by it. Baseball was still fun when I was older, but some of the wonder is taken out of it when your coach’s livelihood depends on it and your mistakes can mean much more than losing your rights to a dairy queen milkshake after the game.

This being said, I hate what we as a society are doing to little league baseball. We have removed it from the joyous goat ranches of recreational, Babe Ruth leagues and transferred it almost completely to the exclusive realm of “tournament baseball,” where 7 year olds have to worry about losing their spot on their team when they go 0 for 4, 9 year old pitchers have to worry about holding a runner on base and throwing 150 pitches a weekend, games are played until well after midnight, 40 year old coaches with three days growth of facial hair and a belly that betrays the fact that they are 20 years past their athletic prime berate a right fielder for missing a cut-off man, and the real goal of the organizations running it is to make as much money as possible off of parental conceit and paranoia of falling behind. The shame of it is, in today’s world of “specialization,” coaches and parents have guided little league baseball down a path where many kids who experience it either hate it by the time they get to high school or have had two Tommy John’s surgeries before the age of 18. For many years I avoided it out of principle, with the eventual realization that it is slowly becoming the only game in town. Therefore, in order to allow my son the chance to continue to experience the game that has given so much to me, I decided to coach his tournament baseball team with the hopes that I could control the experience enough to protect him from its ills.

The result, to no surprise, has been a losing baseball team. When your benefits are player development and enjoyment for a greater baseball future tomorrow, your cost is going to be long innings today at the hands of better teams who have carefully culled their talent pool and have played 100 games since this time last year. With my apologies to Thomas Paine, there is nothing that tries a man’s soul like willing 9 ten year olds to get 3 outs. However, because tournament baseball has become so cutthroat, it is also a pretty good microcosm of what it is like to manage a bank today in an ever increasingly hostile environment. Below I will discuss the top five things I learned about guiding an organization through challenging times that hopefully can speak to community bankers as well.

1. No One is Going to Feel Sorry for You

When top seeds in the bracket are decided by how bad you beat your competition, and 10 year old catchers are behind the plate, expect every baserunner to take second base, even when you are getting beat 20 – 5. When your team hasn’t won a game yet this season, but the better teams need an easier path to the finals, expect to always play the top seeds in your pool so that they can be certain to get a higher seed in the bracket. When your winless team gets the third out in the bottom of an inning up 8 – 5 with 30 seconds left, expect to have to start the next inning to finish the game (which you lose 10 – 9). This is just how it is. No freebees are given, and everything has to be earned. No one feels sorry for you when you are struggling in tournament baseball. There may be the occasional “good luck” from the opposing team during the coin flip, or possibly even a stray comment about how they appreciate the fact your team keeps fighting, but in the end, you literally only eat what you can kill. Feeling sorry for yourself is worthless.

Such is also the case in community banking these days. Growing regulation and a hostile regulatory and political environment is choking the life out of our banks on Main Street, and despite the occasional “focus group” or “community banking conferences” where regulators feign empathy for those problems, no one really cares. Politician’s will wax eloquently about how community banks are the life blood of their communities and the only hope for small businesses, but when the vote comes up to really do something about it through legislation, they cave to other special interests every time. As net interest margins continue to shrink, members of the Federal Reserve may act concerned about the affect their interest rate policies are having on community banks, but in the end they will act in a way that is politically expedient to help keep stock values afloat at the cost of an uncertain economic future. This is just the way the world is, and it is forcing community banks to shift from their traditional business model, which typically prioritized community growth and development over profits, to a meaner, leaner model focused on economies of scale and efficiency that causes banks to out-grow their communities in an effort to just survive. Unfortunately, community banks can’t afford to hold on to principles and continue to lose capital like I can choose to hold on to baseball ideals and lose games. Their existence is dependent upon “winning” games today. However, as I fear the current baseball environment is drying up the joy and future of that great game, I also fear that the current banking environment is drying up the future of our community banks, and even worse, our rural communities. Don’t expect sympathy for that dilemma, though, because in the end, no one seems to care.

2. You Have to Eliminate Unforced Errors

When the other team is much better than you, you do yourself absolutely no favors when you have to get 5 outs every inning and they only have to get 3. If there is a fly ball to center, or a grounder to second base, you have to make that play to have a chance, because your competition certainly will. I can’t even count how many times this season the difference in our runs scored and the runs scored by the other team consists almost exclusively of runs that we allowed after what should have been our third out. The other problem is that unforced errors seem to snowball. One error leads to pitcher frustration and a walk or another error, which only compounds the problem. We are still trying to implement this strategy, but I think we have learned that our ability to compete will be directly tied to our ability to just “pitch and catch” and make routine plays.

In community banking, the best analogy to unforced errors is poor loan quality. When margins are tight and overhead is growing, a failure to monitor the credit quality in your portfolio can hurt more than an overthrow to first base. One or two years of relaxed credit standards or a rogue loan officer can lead to loan losses that might be more manageable in better times but can quickly eat into precious capital in the current environment. Therefore, it is important that, during these difficult days, community banks keep their eye on the ball and avoid extending beyond their comfort zone with loan quality. Like a first baseman that stretches before he knows which direction the throw is going, compromising credit standards in an attempt to increase earnings during these difficult times will leave you unable to maneuver when the next recession hits.

3. People May Not Remember What You Do, But They Are Sure To Remember How You Make Them Feel

As someone who coached through our local league this year, I was required to attend a pre-season coach’s clinic that I was convinced would be useless. Why I needed to waste three hours of my time listening to a coach give me information I already knew to pass down to 10 year olds who wouldn’t listen half of the time was beyond me. Needless to say, I did not approach it with the best attitude.

To my surprise, though, the instructor did provide some helpful tips, and it was what he said at the end of the session that stuck with me the most. He began by asking each of us to raise our hands if we remembered what the record of our 10 year old baseball team was. Somewhat surprisingly, not one of us responded by raising our hands. He then asked us to raise our hands if we remembered who our 10 year old baseball coach was. At that point, everyone in the room raised their hands. He closed his point by stating that, no matter how bad each one of us wants to make the little league coaches Hall of Fame, no such institution exists, and no amount of wins will get us there; however, every player we coach will remember us, and wouldn’t we much rather them remember us as the one that engendered in them a love for this great game that they never lost than as a mean SOB that they avoid when they see us in the grocery store 20 years from now. The choice was completely up to us.
Like my players, your customers and employees are not likely to remember that super-low interest rate you gave them on the last loan or whether their raise five years ago was 2% or 2.5%; however, how you treat them is certain to make an impression, and they will always remember whether you made them feel like a valuable part of your bank or as another reason your day has not gone the way you wanted it to. How we treat people matters, not only in little league and banking, but also in life, and those of us who forget that are doomed to dirty looks in the grocery store, no matter how well we perform.

4. Invest in People With Character and Their Growth Will Surprise You

One of our many challenges on the team this year has been that we have several kids who have just not played a whole lot of baseball; however, to their credit, they have all worked hard and become better players. One of my players sticks out, though, because I never thought he had a chance. He was one of our later additions to the team, and when I put him on the roster I wasn’t even sure what he looked like. I knew we needed another player, though, and his mom said he wanted to play, so he was our man. George, as we will call him, came to the first practice in January incredibly rough, looking as if he had never played a game of catch in his life. My initial hope for George was that he would eventually become either bored or discouraged so that I would never have to deal with the dilemma of sitting him on the bench every game for fear that he would embarrass himself and the team.

What I underestimated, though, was George’s determination and growing love for this great game. George quickly fell in love with baseball, and this spring he claimed any free moment or dollar his dad had by begging him for trips to the batting cage or for weeklong baseball camps held in the area. I also underestimated George’s intelligence and attention span, which soaked up every helpful tip he was given and maximized every opportunity he had to grow as a baseball player. George still may not be my most talented player, and he has a long way to go before I consider him one of my best, but he is no longer my worst, and he has made some serious contributions to the team. Just this past weekend, he caught a fly ball in right field to mercifully end a long inning, becoming a savior I never would have suspected in January. While there have been many challenges and heartaches this season, George has certainly been one of the bright spots, and his experience epitomizes why I wanted to do this in the first place: to generate a love for this great game in the hearts of kids who had been excluded from it and watch them grow into players I never thought they could be.

Banks, like 10 year old baseball tournament teams, and all other organizations for that matter, tend to focus much more acquiring talented personnel with impressive resumes to do the job immediately than on developing some of their current employees who may have much less talent or experience today but with encouragement and inspiration have the character and work ethic to become a critical contributor in the future. Their path to success may not be as certain and their learning curve will definitely be steeper, but if they are motivated and willing to work hard, their upside is possibly greater and the initial overhead that must be invested to get them is sure to be much less painful. When they do develop into the banker you never thought they could be, you can take pride in knowing that you were the one who helped them get there.

5. Hope Changes Everything

While it is incredibly easy to focus only on the challenges when you are losing baseball games or dealing with bank examiners, the ability to maintain hope and project it to others around you is not only important, it is critical to survival. My son is a pretty good athlete that chose (possibly with his father’s prompting) to play for his dad instead of on some other more competitive teams with different goals; however, he has had a pretty tough year with all of the losing. Much like his father, he hates to lose more than he likes to win, and despite the fact that he and I both acknowledged at the outset that we might not win a game this year, he has gone through some valleys when his faith in our decision and his abilities has been hanging by a thread. Self-confidence can be a challenge for any pre-pubescent 10 year old, but it is especially challenging when you lose 15 baseball games in a row.

The low-point came late one night after he and I were driving back home following a game he pitched pretty well in but lost nonetheless by 10 runs. He was distraught at the fact that he continued to lose ball games, one of which he was on the mound when the winning run crossed the plate. He claimed that he wanted to quit altogether, one of his father’s greatest fears. The next morning at 9 AM, we had to be back on the baseball field, and as fate would have it, my son was on the mound in the bottom of the last inning with the score tied 5-5. He came in to pitch when we were down 5-3, and our team rallied to score two runs in the top of the inning to tie it. Two errors later, we lost the game 6-5, and there was not a dry eye in the dugout, including mine. After 10 minutes of silence on the ride home, to my surprise, my son was the first to speak when he said “Daddy, I think we are going to win a game.” At the time I was certain his spirit was crushed and all hope was lost, he found hope in the fact that we had come so close to our first win. I wish I could give you the story book ending and tell you that we won our next game, but unfortunately we are still waiting on that. The moral of the story, though, is since that morning, other than the occasional 10 year old tantrum, my son’s attitude has completely changed thanks to hope, and it has made him and our baseball team better.

We have to remember this lesson in banking. It is so easy for us to get caught up in the latest CFPB threat, or the next regulation, or the terrible yields earned on assets, or the current political environment, but the leaders of our banks have to find some way to give hope to their shareholders, employees, and customers. Community banking, after all, is a calling, and the blessings it provides our society are much greater than the sum of the profits generated by its institutions. We must find hope in the differences made in communities each day by caring bankers and cling to the faith that the hard work will one day be rewarded, if not in this life, than certainly in the next.