Recently I did a workshop for employees at Southern AgCredit, a financial services organization with a novel method for ensuring that its employees work together in cohesive, highly productive teams.
Joe Hayman, Southern AgCredit’s CEO, contracted with me to create and conduct a workshop to help his employees “feel more like owners” at the company. Southern AgCredit does mostly real-estate lending for rural customers, including full- and part-time farmers, ranchers, and recreational enthusiasts.
As a co-op, Southern AgCredit prides itself on being 100 percent owned by customers, and every year the vast majority of its net profits are distributed directly back to customers in the form of an annual dividend. Operating as a co-op also gives the firm’s employees a cohesive sense of real purpose, because success is based not just on making loans and liquidity available to customers, but doing so in a cost-efficient and productive manner, so that every year the customer dividend would be impactful.
As part of my initial briefing from Joe, he sent me the results of two recent customer surveys—one involving new borrowers, and one “exit survey” of customers who had paid off their loans during the period. Both surveys showed amazing results. In fact, the numbers were astounding—higher on satisfaction than I had ever witnessed in any organization. For example, of the 217 new borrowers surveyed, in a question on customer satisfaction that used an A to E scale, 214 of them rated their satisfaction as an A, two were a B, one was a C, and no one chose D or E.
In the end, I was able to put together one of the most advanced workshops I’ve ever done on the nuances of creating genuine customer advocates, and focusing on several value-adds that can cement and strengthen a relationship with supportive customers—such as purpose-oriented content (with different content for hunters and farmers) and social-capital-based programs to motivate customers to build the business more effectively through their own efforts.
Rethinking employee incentives
One of the most interesting things I learned had to do with the unique way in which Southern AgCredit encourages its own employees to operate in cohesive, highly cooperative and engaged teams. While most of the company’s annual profit is distributed back to customers in a dividend each year, a portion is distributed to employees as an incentive bonus based on performance.
Unlike most companies, each employee’s bonus isn’t based on individual performance, but on the performance of their team. The bonus pool is established by overall company performance, divided up based on the performance of the team at each office, and then divided among the employees on the team in equal percentages regardless of their title or level of compensation. If, for instance, 40 percent is available for branch “A”, then each employee within the branch would be eligible for a 40 percent incentive.
Every office team works extremely hard to ensure that their office is absolutely as cost-efficient and productive as possible. They’re also careful only to bring on new employees who will make genuine contributions.
Moreover, because the individual employees on a team aren’t competing with each other for a share of the team’s bonus pool, Southern AgCredit’s employees help each other.
What’s more impressive, even though annual production goals are not established at the employee or branch level, Southern AgCredit has grown from $500 million to over $1.1 billion in total assets since the incentive plan was implemented ten years ago. And the annual dividend to the customers is the highest of its peer group! The success of this company shows that no matter how big or small, a commitment to employees will reap benefits for customers and the bottom line.