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LETTERS : B of A Must Return to Principle of Serving Customers, Workers

December 14, 1986

I was recently "redeployed," or laid off, by Bank of America. This letter is dedicated to other middle managers and branch employees who have been forced into retirement by the bank. It may help answer the question: "Why is Bank of America in trouble?"

A. P. Giannini founded Bank of America believing in the basic honesty and inherent trust of middle-class American society.

The bank catered to the local small businessman, who in himself is becoming a lost entity, along with farmers, miners and average middle- and upper-middle-class families. Local branch banking was started by the bank and became its specialty.

Branch managers were autonomous within their local service areas. Lending officers were responsible for making good, solid loans and the follow-up on their portfolios. The operations people took care of policy, premises and employees. The customers respected and remained loyal to these employees and officers, who were the direct representatives of the bank.

Customers were second-, third-, fourth- and even fifth-generation "Bankamericans." Top management positions were mostly filled from within.

These officers knew and understood the customer and employee better than any group of company executives anywhere in banking.

The trust, interaction and resulting loyalty made Bank of America the largest financial institution in the world. Bank of America in recent years has changed its major principles. It has exchanged personal caring for detached indifference for both the employees and customers.

It has shifted its base from the California middle market to a world of high finance. It has entered a world of competition that was already overcrowded, highly competitive and insecure.

It has turned its back on the once-prosperous pastures it had roamed in relative freedom with little interference.

These changes have resulted in a lack of job security, low morale at all levels, confusion and loss of customer and media respect, contributing to a decidedly weaker performance.

Many highly qualified managerial people have left the bank, either by seeking employment elsewhere or through "redeployment." The expertise is being skimmed off. Other competitors are snapping up the cream of Bank of America's officer crop and winning the daily battle for the marketplace.

Using redeployment, attrition and branch closings, the bank went after the "old guard."

All of this when the chief executive leaves the bank under duress and with a record of failure, with $1.7 million in his pocket.

As long as the bank continues down the path that created its problems in the first place, and as long as top management allows its greed to exploit customers, employees and the marketplace, there can be no recuperation.

Only by returning to the human principle of service to both customer and employee, and by giving the local middle manager the authority to service his marketplace can the bank hope to recover.

Otherwise, the bank might just as well be sold to the highest bidder, the name changed and this once-great financial institution laid to rest beside its illustrious founder.



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