Weak Economy, Strong Bank

In the past year alone, more than 100 American banks have been taken over by the FDIC. One bank that wasn't on that roster is WSFS, a regional, 41-office financial services company based in Wilmington, Delaware. In fact, while other banks are selling off assets, WSFS -- one of the oldest banks in America -- is gaining market share.

"We have lifted results at a time when people would describe our economy as being at its worst," says WSFS Executive Vice President and Director of Human Capital Management Peggy Eddens. "Our commercial loans are up 7%; our customer deposits are up 26%. In 2009, we grew commercial loans by more than $120 million. Our total loan portfolio also grew during the year, which is meaningful to us as on a national level, bank loan portfolios shrunk by 7% -- which is pretty good."

You don't stay around unless you provide significant value to the people you serve -- and you also reinvent yourself every generation or so.

Pretty good to say the least: From 2008 to June 2009, WSFS grew deposits by an impressive 32%, more than twice that of their major competition, and the bank currently has a healthy $2.6 billion in deposits.

"You don't stay around that long unless you provide significant value to the people you serve -- and you also reinvent yourself every generation or so," says Mark Turner, WSFS president and CEO. "You have to respond to the market as it is. And you don't survive for 177 years in a dynamic environment like the one in [the United States] without making those necessary changes from time to time."

The next generation

In 1998, WSFS brought Gallup in to measure associate engagement with the Q¹² assessment -- a 12-item survey that measures employee engagement at the workgroup level. Organizations can use Q¹² results to find out where and why engagement is lacking and to take steps to improve it.

"Our business model is engaged associates delivering stellar service to create customer advocates. That just rolls off the tongue of anybody here," says Eddens. "And clearly, the foundation of that is our people. If we don't have the first part right -- the engaged associate piece -- it's very hard for us to deliver on the stellar service promise that then creates customer advocates who are raving fans for us. It really starts and ends with the people."

Gallup's research shows that in average organizations, the ratio of engaged to actively disengaged employees is 1.5:1. But in world-class organizations, the ratio of engaged to actively disengaged employees is nearly 8:1. In 1998, WSFS' ratio of engaged to actively disengaged employees was 1.1:1, and the bank committed to improving it. So WSFS buckled down and focused on the key elements that drive employee engagement.

Bit by bit, year by year, WSFS became a more engaged organization. By 2003, the bank's overall engagement score placed it above the 50^th percentile in Gallup's database, and its ratio of engaged to actively disengaged employees had improved significantly. By 2006, its overall engagement score was well above the 80^th percentile, and its engagement ratio had climbed to 10.5:1.

This was a significant improvement -- but the bank still wasn't where WSFS leadership wanted it to be. Financial service organizations like WSFS exist in a world of extreme competition, which makes brand differentiation intensely difficult. A highly engaged workforce put them at the front -- but not far ahead -- of the pack.

"In 2005 or so, there was a feeling that if we didn't continue to lift ourselves, our competitors out there would catch up," says Eddens. "If we became at all complacent or didn't drive ourselves toward even small increments of improvement, we would stay where we were -- and maybe even slide backward -- which would put us in a place where others could catch us."

That's what brought WSFS to HumanSigma. Gallup's HumanSigma metric sits at a powerful intersection between employee engagement (measured by the Q¹²) and customer engagement (measured by Gallup's customer engagement metric, CE¹¹). Teams that perform in the top half of Gallup's global databases on either employee or customer engagement -- but not both -- see an average 71% boost in performance relative to teams that perform in the bottom half on both measures. But teams that perform in the top half on both employee and customer engagement measures outperform teams in the bottom half by 240%. (See "Optimize" and "How Employee and Customer Engagement Interact" in the "See Also" area on this page.)

And that's the difference WSFS needed. "We are in an industry that is commoditized, by and large. And in any industry, you have to find a way to differentiate yourself. While many banks claim that their differentiating point is service and relationships, there's no way of knowing unless you measure it," says Turner. "HumanSigma gave us the science and the rigor and the culture so we can measure it and sustain service. HumanSigma is clearly the next evolution, and we believe we have to be 'A' students in it, because it will take us into the next generation of success."

HumanSigma world

So in addition to its associate engagement program, in 2006, WSFS began measuring and managing customer engagement at each branch and in its small business banking and commercial banking divisions. To measure the impact of the WSFS customer service initiatives, Gallup regularly interviews WSFS customers and reports what it finds semiannually. "We were looking for high levels of service at WSFS, and customer engagement is the backbone that all that's built on," says Turner.

Meanwhile, WSFS continued its efforts to boost engagement among its employees. The bank's managers participated in Gallup's Great Manager Program. The company also began working toward becoming a strengths-based organization -- one in which the employees' talents are assessed and coached -- and started training its own people to be strengths coaches. They created a troop of "Engagement Advocates" who champion engagement in every corner of the company. President and CEO Turner even got a second master's degree through Gallup's MBA program at the University of Nebraska.

In other words, WSFS declared all-out assault on disengagement and marshaled every resource to replace it with high performance. But that kind of effort needs a general to lead it -- and that's where Sheila Hacker comes in. As HumanSigma manager, Hacker conducts every aspect of WSFS' HumanSigma work, teaching its associates what their engagement and their customers' engagement looks like, what it means, how to maintain it, and how to improve it.

"I spent my first four months on the job learning everything I could about HumanSigma while I was [preparing] for the next HumanSigma survey. My head was spinning, really," she says. "And then I started spending all my time communicating with each workgroup and each individual I could, while getting ready for the next survey. In fact, that's still pretty much what I do."

One of Hacker's jobs is to keep engagement local and organic. To that end, WSFS complements its rigorous HumanSigma pursuit with two programs that further support its culture of service and engagement: the Stellar Service and the Jurdy Idea program. "These initiatives recognize exceptional customer service while empowering associates to drive positive organizational change," says Hacker. "They also inculcate and elaborate on the engagement culture for everyone."

In 2007, WSFS initiated its "We Stand For Service" campaign. As part of this effort, all associates participate in the bank's mandatory two-day Stellar Service course. The program's goal is to enable associates from all business lines to deliver to a consistent level of service to customers -- and to create positive, memorable service experiences. To reinforce its commitment to providing exceptional service, the bank also initiated the Stellar Stories program, which shares exceptional customer service examples among WSFS associates in real time by e-mail.

In addition to Stellar Service, the Jurdy Idea program was launched in 2008. Originally a suggestion-box program designed to increase return on assets, it has since evolved into a bottom-up change-management initiative fueled by associates' ideas. When an idea is submitted, a dedicated resource partners with the submitter to execute it. To date, 190 ideas have been implemented on everything from changing forms and creating departmental Intranets to new banking products, revised business practices, and ways WSFS can go "green." Associates are recognized for their efforts in implementing these ideas in various ways, including cash rewards.

In the first year of the Jurdy Idea program, WSFS associates submitted 700 ideas, more than half of which were geared toward customer engagement. "We can tie these programs to 'my opinions count,' to recognition, to 'my manager seems to care about me as a person,' to 'I've had opportunities at work to learn and grow,'" says Hacker. "All those things that are so important to engagement are wrapped up in these two programs."

Because Hacker can't regularly meet with all 620 WSFS associates individually, the company has developed the Rounding for Outcomes and Associate Development (ROAD) group. The group, which is comprised of 8 to 10 WSFS associates recruited from a variety of job roles, takes the occasional ROAD trip to visit different departments within the bank to learn new best practices, help implement initiatives, and break down silos.

When times get tough, organizations usually go one of two ways: Everybody starts acting from self-interest, or everybody bands together.

HumanSigma is so important to the bank that Hacker begins teaching associates about it before they're even hired. "They hear about HumanSigma in their interview, and they hear about it when they're brought on board," she says. "Then about 60 days after they're hired, I contact them and say, 'So tell me, what work have you done? Have you heard about the impact plan for your workgroup? Do you know what questions they're working on?' just to make sure that they are really getting the culture."

Discrete actions, general customer engagement

Hacker spends most of her time with managers, helping them prepare for, conduct, and reckon with the results of the employee and customer engagement surveys. She's there for managers who have trouble running impact-planning sessions -- meetings in which workgroups discuss their Q¹² results and figure out ways to change them. She works closely with the Engagement Advocates and the ROAD group. And she helps the executives implement HumanSigma findings into their strategies.

Hacker also helps associates see why discrete actions lead to general customer engagement, such as this one reported by a WSFS teller: "A customer came in with a $70,000 check from [Bank X] and asked about FDIC [deposit insurance] because he didn't think he was insured at [Bank X]," Eddens relates. "Our associate told him that [Bank X], one of the leading banks in America, is part of the same FDIC program we are, and that he was truly OK if he chose to stay there. He said, 'No, I want to bring you this $70,000 since you're so much more knowledgeable and helpful than they were, and I'll come back because I have another account I want to close at [Bank X].' The associate thought that was the end of it, of course. But then at the end of the day, he returned -- to her specifically -- with a check for over $4 million."

That's an unusual story, but not an unusual sentiment, or so the data indicate. When WSFS started working on associate engagement in 1998, its ratio of engaged to actively disengaged employees was 1.1:1. By 2009, that number had skyrocketed to 17.5:1.

WSFS has realized a similar jump in customer engagement. When the bank began its HumanSigma program, 56% of its branches were fully optimized, or roughly in the top 25% of all teams in Gallup's global databases for both employee and customer engagement. By 2009, 88.6% of its branches had become fully optimized.

In 2006, the Wilmington News Journal recognized WSFS on its "Best in Business" list as one of Delaware's leading workplaces. WSFS appeared on the list again in 2007 and 2008. Then in 2009, WSFS was awarded the first-place spot in the big-company category.

WSFS achieved this high honor during a time when other banks were struggling and when some were failing outright. "While others are either retreating or wounded or out of business, we were able to continue growing our franchise and take market share, and I attribute a great deal of that to HumanSigma," says Turner. "When times get tough, organizations usually go one of two ways: Everybody starts acting from self-interest, or everybody bands together because they know they've got something special. And in our organization, people came together -- because they realized there's something special here that's not only worth preserving but worth growing, even during a difficult time."