A few days ago, I was in Chicago preparing to address the Chairman’s Forum for the Independent Community Bankers of America. I had an opportunity to talk with Philip Smith and Jeff Gerrish. Philip is President of Gerrish McCreary and Smith and Jeff serves as Chairman of the Board. Their firm serves as consultants and attorneys to community banks, thrifts, credit unions, and their respective holding companies.

We were discussing ways to manage change and provide strong leadership in an industry that has been turned upside down by the financial crisis of recent months.

Successful leadership in the midst of chaotic change requires a mind shift. Traditional leadership has the mindset that “if it ain’t broke, don’t fix it.” A transformational leadership approach says, “It’s already broken, or it’s going to break. How can we seize the opportunities we have now to make it better?”

Managing change with this transformational mind set requires that leaders know what they are up against. There are some critical truths about change that need to recognized before getting a firm grasp on any changing situation. 

Truth # 1:  Change is inevitable – it’s going to happen.

The question for leaders is – will you see it coming? What steps are you implementing to survey the changes in your industry? Have you developed plans for innovation and contingencies? If not, why not? Transformational leaders are visionary.

Truth # 2:  Change impacts everyone, at some point, at some time. We don’t live and work in a vacuum. And unfortunately, we are sometimes innocent bystanders who get caught in the groundswell of change. Consider, for example, the honest owner of the
auto dealership whose livelihood is cut off as a result of the disassembling of Chrysler and General Motors. Transformational leaders understand the ripple effect of change and realize their organization can be impacted by the decisions of others.

Truth # 3:  Change is most challenging for those who are most comfortable. Traditional leadership thinks: “I like the way it’s always been done.” “Why worry about what MIGHT happen?” “Business seems to be going nicely, why mess with a good thing?” Transformational leadership says: “We must innovate or fall behind.” “What can we change that will take our processes, products and people to the next level?”

Truth # 4:  If leaders wait until everyone realizes change is necessary, it is often too late to manage the situation successfully. Successful leaders must accept the responsibility for setting the vision and direction of their organization. That includes accepting the responsibility to make difficult decisions in a timely manner.

Truth # 5:  Most often, change is a result of force, not choice. Again, the U.S. auto industry is a classic example. Transformational leaders have the mind set to change voluntarily. They seek out the parts of their organization – and themselves — that need improvement and implement the change before that change is forced upon them.

Truth # 6:  When change occurs, new problems and new opportunities are always created. Yes, managing change is a huge headache. It is also a huge oyster filled with opportunities never before available. The need to reduce U.S. dependence on foreign oil coupled with
the restructuring of the U.S. auto industry has spawned an explosion of new “green” technologies. Transformational leaders understand the value of seeking out and maximizing the opportunities that exist each time something changes.

Whether it’s the banking industry, manufacturing, energy, healthcare or some other industry, opportunities abound for those organizations whose leaders embrace these truths and transform the way they manage change.

Mr. Smith and Mr. Gerrish were kind enough to share a few of their thoughts on leadership and change with me. I think you’ll their comments valuable as well. Check them out here:

Philip Smith, President, Gerrish McCreary Smith

Jeff Gerrish, Chairman, Gerrish McCreary Smith