Thirty Years Later,
Their BB&T Dream Comes True
Often
in the business world, it’s OK just to be seen. Sometimes, however,
you also need to be heard. That was the stance that five young, idealistic, North Carolinians
took on a spring day in 1972. They walked into their CEO’s office at
Branch Banking & Trust en masse. Changes were needed, they said.
Without them, they were prepared to take another walk en masse —
this one away from the company.
Those steps never had to be taken. Thirty years later, the same team
— Chairman and CEO John A. Allison IV, President Kelly S. King (right), COO
Henry G. Williamson Jr., CFO Scott E. Reed and Chief Credit Officer W.
Kendall Chalk — has turned BB&T Corp. of Winston-Salem into the
13th largest banking corporation in the nation. They credit a
decentralized, community-banking philosophy, shaped by
childhood-inspired values, with their success.
“I think it all goes back to our backgrounds and the way we think
and the way we feel,” Reed says. “It was developed over time. How
do you execute on that? I would say all of that was a blend of all of
us — not one person or a great innovation one day.
. . . The fitting together has been a joint effort of feelings
and ideas.”
The five forged their friendships in their early days at BB&T in
the 1970s, when the bank, then based in Wilson, had $250 million in
assets. At the time, it was a “solid organization,” says Allison,
“but it was very conservative and to some degrees backwards. It was
a farm bank and was not innovative with the times.”
He and the others give their predecessors at BB&T credit for
hiring bright young people and for listening to their suggestions to
change the direction and pace of growth of the organization. King
recalls that the group was “unsatisfied with mediocrity and saw
opportunity for the company to excel.”
“So basically, we confronted the CEO (Thorne Gregory) at that time,
not in a combative, but in an honest way, to say that if things did
not change, it was likely that some or all of us would leave. To his
credit, he saw the situation and made the appropriate changes.”
Gregory gave the group leadership positions. Allison, Reed and
Williamson went into executive management, and Chalk and King were
promoted soon afterward. Gregory also aligned the company under
Vincent Lowe, who the group of young men supported, and Lowe became
CEO after Gregory died in 1982. Allison became CEO in 1989 when Lowe
died.
King says he and his colleagues feel they were able to realize their
ideals. “We were blessed in that opportunity to pursue our dreams
and work together and create a good situation for our clients,
employees, shareholders and communities. It’s a dream come true,”
he says.
By the time Allison took the helm, BB&T had become a $5 billion
bank, exposed for takeover. Allison and his team shaped a successful
acquisition model, says Tony Plath, professor of finance at the
University of North Carolina at Charlotte. BB&T targeted small
banks in growing markets and then, once taking them over, gave
decision-making authority to the branches.
“John’s got a way of thinking about getting better and bigger that
has been real effective for them. They were just a little bank and are
now a $70 billion group,” Plath says.
Allison says he wanted to focus on the people in each acquired
company, because “mergers are difficult, from the employee
perspective. When we do mergers, we don’t send in a lot of people
from BB&T. We will only send in one from the organization. We use
the people and the talent that are already there, so it’s not a big
drain on us.”
He adds that the bank has expanded on a number of fronts, growing its
assets dramatically. In 1991, the bank had $6.2 billion in assets,
compared to $70.9 billion in 2001. BB&T posted $60 million in
earnings in 1991, compared to $1.1 billion in 2001.
“Part of the process has been growing the types of services we
offer, expanding the geography and service offering. We are in many
more financial services than we used to be — insurance, for
example,” Allison says.
In the past 15 years BB&T has acquired 60 community banks and
thrifts, 53 insurance agencies and 16 non-bank companies, Allison
says. “We’ve really executed on that strategy very
successfully.”
Reed notes that personal attention to the community banking concept
— helping customers “like they’re next of kin” — is also
central to BB&T’s success. “The real core of the community
banking concept is to serve our clients, whether they’re businesses
or individuals, like they’re our parents or in-laws or brothers and
sisters. Whether they’re funding weddings, their retirement,
whatever, the decisions are very personal and of the utmost importance
to that person at that point in time.”
Core Values and Personalities
Allison notes that it’s important to gain consensus. If there is
dissention among his troops, he’ll defer big decisions. “We have a really strong philosophy that comes out of my personal
interest in philosophy — the foundation is rationality and
individuality,” he says.
Reed says that at every meeting, Allison writes the word, “LISTEN”
on the top of his notes and systematically underlines it to remind
himself to listen to others’ opinions. “He’s a great innovator of the organization and our leadership
style,” Reed says of Allison. “He thinks visionary thoughts about
the company. If you combine that with a willingness to listen, you get
the best of everything.”
The others note that each person brings a distinct personality trait
and strength to the table. Reed, they say, is a capable financial
person but is people-oriented and compassionate. King is the positive,
upbeat salesman. Chalk, is steady, non-wavering — “the Rock of
Gibraltar,” says King. And Williamson, who is analytical, deep and
introspective, is the conservative voice of the group.
All five agree that while their personalities and interests vary
widely, their longtime friendship and uncompromising respect for each
other are a unifying force that has given BB&T its corporate
identity and position as a top banking institution.
“I don’t think the (personality differences) create friction if
you’re focused on a common purpose,” King says. “Pieces of a
puzzle can be viewed as conflicting with each other. But when
they’re in line, they create a beautiful picture. We’re focused on
our vision and mission, so that’s the complimentary nature of the
strength.”
They also say they draw on their upbringings for the values they
instill in their workforce. Williamson notes that they all came from
middle-income family backgrounds. He, King and Chalk are all from
eastern North Carolina. Allison is a Charlotte native, and Reed grew
up in Greensboro.
“I think the one thing is that we do not always agree, but even when
we don’t, there’s a mutual respect that we all have the same frame
of experience. And we care about the good for the company and our
clients. When you disagree, there’s a healthy respect for the
differing opinions, which makes it easier,” Williamson says.
Chalk says one important tool is a six-month management development
program, “BB&T University,” to instill a certain set of values
early on in the careers of new hires. “That’s been an important
ingredient for a long time. We’re not just trying to teach people
skills during the program but impart a sense of values of the
organization — a common thread that has extended for 30 years.”
Future for Stability
As far as BB&T’s staying power, the five bank leaders assert
they think the bank will continue to grow and remain a strong presence
in the banking landscape.
“I think a couple of reasons that we have not been bought by some
larger bank as some of our competitors have is that, first of all, we
always had a view that we had a fairly bright future,” Chalk says.
“We had potential and ways to grow and improve.
“The second reason is, we have made it clear all along that we
didn’t particularly want to get bought. I would not anticipate any
different strategy over the next 10 years, relative to the last 10
years.”
King notes that the bank’s stock price has done better than the
industry average. “We’re also not for sale,” he says. “So we
have performed at a level that the board is satisfied with our
leadership.”
Reed says the strength of the BB&T workforce further bolsters the
company. “I will have been here 30 years in May. It’s been a
pleasure, virtually the whole time. People are so dedicated, and they
work so hard. It’s a pleasure to have that.”
-- Heidi Russell Rafferty
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