BANKER THE ARIZONA OFFICIAL PUBLICATION OF THE ARIZONA BANKERS ASSOCIATION PUB. 12, 2022 ISSUE 3 A Conversation with Linda Cohen, The Kindness Catalyst Page 26 Why Being Kind at Work Matters Page 24
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GET THE SHIELDCANNABISBANKINGPLAYBOOK: ShieldBanking.com/cannabis-banking-playbook To ensure the processes, procedures, technology, and trained staff are in place to serve this industry, bankers need to start with a plan. Having a clear understanding of what is required to serve cannabis businesses and minimize risk to the financial institution will help bankers prepare for the upfront costs associated with cannabis banking and develop the policies and procedures needed to hit the ground running. With regulations varying from state to state, it’s a complex industry with high costs, requiring a considerable investment of time and energy. Compliant banking operations require continuous enhanced due diligence to help guard against risks such as: A Robust Illegal Market. According to New Frontier Data, the legal cannabis market in the U.S. is expected to reach $41 billion by 2025. Unfortunately, the illicit market, valued at $65 billion by some estimates, is shrinking at a slower pace. Financial institutions must ensure that funds coming through their doors are from legal channels. Bad Actors. To ensure bad actors are not attaching themselves to good businesses, enhanced due diligence conducted around underlining beneficial owners will continue to be at a heightened level for the foreseeable future. Legacy Cash. Because the cannabis market existed as a cash business long before legalization and because the industry continues to operate largely as a cash business, a strong BSA/AML programwill help ensure that funds coming into the financial institution are from legal cannabis operations. While the added burden and cost associated with serving this industry may limit the total number of participants in the short term, we expect competition from financial institutions to steadily increase as more states launch legal programs and we get closer to federal recognition. Financial institutions that invest in technology to improve efficiencies and lower costs today will be able to scale as the industry grows and have a competitive advantage when the economics of the industry change over time and new banks and credit unions enter the market. Informed by the experiences of pioneering bankers across a growing number of states with legal medical and adult-use programs, the Shield cannabis banking playbook defines a path forward for financial institutions to serve cannabis-related businesses compliantly while benefiting from the financial rewards of this market. The emerging legal cannabis industry brings significant growth potential, alongwith challenging operational demands and complex regulations. But cannabis banking does not have tomean high-risk banking. Build aWinning Cannabis BankingProgram Cannabis banking, simplified. Shield Compliance transforms how financial institutions manage risk, comply with regulations, and address the operational demands of the legal cannabis industry. Compliance management for financial institution daily operations, including case management and automated reporting. Informed account application process for underwriting and onboarding cannabis business accounts. Compliant mobile payment and payroll solutions to reduce cash transaction dependency. See how Shield Compliance is helping financial institutions earn the benefits of a compliant cannabis banking program. info@shieldbanking.com (425) 276-8235 GET IT TODAY GET THE GUIDE TO COMPLIANT CANNABIS BANKING
Paul Hickman CEO & President Steven Killian Director of Government Relations Kerensa Williams Chief Operating Officer William Ridenour General Counsel 111 West Monroe, Suite 440 Phoenix, Arizona 85003 Phone: (602) 258-1200 2022 AZBA BOARD OF DIRECTORS AND STAFF AZBA STAFF INTHIS ISSUE @2022 Arizona Banker Association (AzBA) |The newsLINKGroup, LLC. All rights reserved. The Arizona Banker is published four times each year by The newsLINKGroup, LLC for AzBA and is the official publication for the association. The information contained in this publication is intended toprovidegeneral information for reviewand consideration. The contents donot constitute legal advice and shouldnot be reliedonas such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the association, its board of directors, or the publisher. Likewise, the appearance of advertisementswithin this publication does not constitute an endorsement or recommendationof anyproduct or service advertised. TheArizonaBanker is a collectivework, andas such, some articles are submittedby authorswhoare independent of AzBA.WhileAzBAand thenewsLINKGroup encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact The newsLINK Group at 855-747-4003. EXECUTIVE COMMITTEE Brian Schwallie Immediate Past Chairman U.S. Bank Scott Vanderpool Chairman Bank of America Don Garner Chairman-Elect Alliance Bank of Arizona Bo Hughes Treasurer Canyon Community Bank Brian Riley Vice Chairman Foothills Bank Brian Ruisinger Secretary Republic Bank of Arizona DIRECTORS Jack Barry Enterprise Bank & Trust Bill Callahan Arizona Bank & Trust Neal Crapo Wells Fargo Bank Frank Coumides KS State Bank Wayne Gale 1st Bank Yuma Michal Plavecky Executive Administrator 6 Under the Copper Dome Banks in Battle at the State Capitol … Big Fights Still to Come 8 Inverted Yield Curve May Bring Hedging Opportunity 10 Howie Jorajuria Earns Prestigious Diploma In Banking 12 Why Banks Need to Prepare Now for Greater Costs, Revenues 14 What AZBA Members are Saying About the Colorado and Arizona Banking Association’s Women in Banking Conference 16 2023 Arizona and Colorado Banker Summit Save the Date 24 Why Being Kind at Work Matters 26 A Conversation with Linda Cohen, The Kindness Catalyst Peter Hill Goldwater Bank Joel Johnson FirstBank Kyle Kennedy Bell Bank Dave Matthews First Western Trust Christine Nowaczyk BOK Financial Brad Parker PNC Bank Steve Richins Comerica Bank Tyson Rigby JPMorgan Chase Craig Robb City National Bank Dina Ryan Citigroup Patrick Strieck BMO Chris Webster Commerce Bank of Arizona Mark Young National Bank of Arizona
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6 www.azbankers.org The 2022 legislative session has adjourned … finally. The session dragged on, as expected, while the legislators and Governor hammered out a state budget. The budget was complicated by a massive revenue surplus, very narrow Republican majorities (not a single vote to spare), and election-year politics. The goal of a 100-day session was quickly abandoned, and ultimately the session dragged on to 166 days, just one week short of the new fiscal year. What was the result for Arizona’s banking industry? The efforts of the Arizona Bankers Association paid off, and the banking industry escaped the session unscathed. In fact, the Association had a few proactive victories. We were able to clean up the Foreign Country Money Judgements law to insert a savings clause. The lack of a savings clause was thoroughly discussed in litigation that came before the Arizona Supreme Court, and with the input from the Court’s decision, we were able to make the law better. Additionally, we had several victories in getting amendments to legislation on data breaches and money transmitters. However, our biggest victories came in the form of defensive wins. The biggest legislative challenges faced by the banking industry included efforts to eliminate the use of ESG factors (Environmental, Social Governance) in investment and banking decisions, as well as forced access laws relating to banking of the firearms industry. These bills were narrowly defeated because a few Republican members stood up for the right of a business to determine whom they choose to do business with in a competitive free market. Specifically, the proposed ESG legislation would have prohibited a financial institution “from discriminating against any person based on a political affiliation or other social credit, environmental, social, governance or similar values-based or impact criteria.” The bill broadly defined “discrimination” and would therefore have severely tied the hands of banks and large investors. Forced access legislation followed a similar narrative of “preventing discrimination” against firearms businesses. Despite the inability of the bill’s proponents to demonstrate actual harm or the inability to secure banking services, the bill advanced easily through committees but was finally held up before reaching the Senate floor. Under the Copper Dome Banks in Battle at the State Capitol … Big Fights Still to Come
7 PUB. 12 2022 ISSUE 3 The lack of a savings clause was thoroughly discussed in litigation that came before the Arizona Supreme Court, and with the input from the Court’s decision, we were able tomake the law better. Unfortunately, these wins may be short-lived as the face of the Legislature changes following the 2022 elections. Republicans are expected to increase their numbers in the Legislature following the recent redistricting process. The bills’ sponsors and like-minded legislators are expected to return, whereas many banking allies were defeated in the August primary or have chosen to retire from the Legislature. Not only do we expect these bills will be reintroduced in January 2023, but we expect the effort will be bolstered by the passage of similar bills in other states and the national attention being brought to ESG from Florida Governor and Presidential hopeful Ron DeSantis. Before you know it, the next legislative session will be upon us. It is critical that the banking community be ready for the debate ahead. The Arizona Bankers Association will be prepared, having spent the interimmeeting with legislators and collecting facts supporting our case. Please tune in to the Government Relations Committee (GRC) to stay informed and stay involved in advocating for the Arizona banking industry. w
8 www.azbankers.org This past spring, the U.S. bond market, where many community banks are invested, flashed a common recession warning: the yield curve briefly inverted, with short-term debt paying more than longer-term loans. Traditionally, an inverted yield curve has been an early predictor of a coming recession. But the correlation has grown weaker over the past two economic cycles. In the current market, another explanation of the inverted yield curve could be that the yield on two-year debt is rising at a faster pace in response to the Federal Reserve’s aggressive tightening of monetary policy. We dive deeper into what really impacts the yield curve and how your bank can take advantage of this unusual circumstance. Multiple factors shape yield curves. Both short– and long-term considerations determine the shape of the yield curve. In the current environment, a mix of economic and geopolitical events have nudged short-term interest rates up while slowing down the momentum of increases in long-term rates. Fed rate hikes are the big factor in this occurrence of an inverted yield curve. In 2020, the Fed cut its overnight rate to near zero as part of an effort to limit the COVID-19 pandemic’s effects on the economy. Now, however, the Fed has begun to raise its benchmark rate to counter the effects of runaway inflation. The Federal Reserve’s current dot plot (used for signaling the Fed’s outlook for the path of interest rates) shows the median year-end projection for the Fed Funds rate moved up to 3.4%. The estimate for the end of 2023 was boosted to near 3.8%. When the Fed raises rates, other rates typically go up as well. But the increase can sometimes combine with other economic factors to have counteracting effects on different terms along the yield curve. Right now, short-term bond yields are increasing, but longer-term bond yields haven’t gone up by much. That’s because strong international demand for U.S. treasury bonds, plus quantitative easing, has made longer-term bonds relatively more expensive — and pushed their yields down. An inverted yield curve brings opportunities. No one can know for sure when the next economic recession will begin. But financial institutions may be able to take advantage of two potential opportunities that the inverted yield curve offers. Inverted Yield Curve May Bring Hedging Opportunity We dive deeper into what really impacts the yield curve and how your bank can take advantage of this unusual circumstance.
9 PUB. 12 2022 ISSUE 3 To continue this discussion or for more information, please contact Jay Kenney, SVP & Southwest Regional Manager for PCBB, at www.pcbb.com or jkenney@pcbb.com. Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management, international services, lending solutions, and risk management advisory services. 1. The first opportunity is in buying bonds. When the yield curve is in its usual upward-sloping shape, investors earn lower yields for short-term debt and higher yields for longer-term bonds. In an environment of rising interest rates, bond buyers have to choose between longer-term debt, which carries a better yield, and shorter-term debt, which yields less but gives a buy-and-hold investor more opportunities to purchase newly issued bonds at higher rates. But when the yield is inverted, bond buyers get the best of both worlds: higher yields and more opportunities to buy new bonds as rates rise. 2. The second opportunity is a chance to hedge floatingrate debt with an interest-rate swap. Any time investors use an interest-rate swap hedge, they have to consider whether the value of locking in an interest rate justifies the cost of the swap. However, investors can have the best of both worlds with an inverted yield curve. They can lock in a swap rate less than the rate short-term bonds are paying while also giving themselves longer-term certainty of debt payments with a stabilized interest expense. w
10 www.azbankers.org Howie Jorajuria Earns Prestigious Diploma In Banking The Graduate School of Banking at Colorado (GSBC) is proud to announce the graduation of Howie Jorajuria of 1st Bank Yuma in Yuma, AZ, from its stateof-the-art graduate school of banking program. Graduates receive their GSBC diplomas upon successfully completing three annual twoweek sessions of classroom training on the University of Colorado Boulder campus in Boulder, Colo. Jorajuria was among 168 students honored in a ceremony on July 28, 2022. GSBC’s curriculum is community banking-focused and delivered by expert faculty. All courses fall under one of four tracks: Financial Management & Strategy, Innovation & Engagement, Leadership & Culture or Lending. The graduates also completed six immersive intersession research projects throughout the program, including a strategic topic project that they tied directly to an issue or opportunity facing their organization. The program’s capstone course is an in-depth bank management simulation, where students assume the roles of senior management of a commercial bank, involving themselves in the group dynamics and managerial skills of managing a bank in a competitive environment with changing economic conditions. GSBC held its 71st Annual School Session July 17-29, 2022, on the University of Colorado Boulder campus, hosting nearly 500 students from across the nation. The school’s 72nd Annual School Session is scheduled for July 16-28, 2023, in Boulder, Colo. For enrollment information, visit www.GSBColorado.org. w The Graduate School of Banking at Colorado is America’s Premier Community Banking School, boasting over 8,000 alums since its inception in 1950 and educating approximately 600 bankers and regulatory professionals from around the nation annually. GSBC prides itself on providing unmatched higher education to America’s community bankers. For more about GSBC’s lineup of comprehensive educational programs, visit www.GSBColorado.org or Josie Bunch, Director of Marketing, at 303-892-6897.
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12 www.azbankers.org The Federal Reserve is winding down its tapering program and eyeing faster rate hikes to curb inflation. For banks, higher rates mean more revenue potential, but they also mean higher costs. Given this, it’s no surprise that our most recent quarterly survey showed that 63% of bank executives expect funding costs to increase over the next 12 months (a 34-point jump from Q3), and 42% expect competition for deposits to increase (an 11-point jump from Q3). This anticipated pressure on funding follows a two-year period in which banks have been completely saturated with liquidity. Meanwhile, 59% of executives anticipate loan demand to increase in 2022 (an 11-point jump from Q3), and 80% expect economic conditions to improve or remain the same. With the costs of funding soon to rise and the business environment showing signs of improvement, now is the time to begin preparing for the future. Below are two suggestions. 1. Lock in Cheap Funding While You Can While interest rates in general are expected to rise, the same expectations don’t extend to deposit rates. Recently, both The Wall Street Journal and The New York Times published stories explaining that, due to excess liquidity, banks won’t be raising rates anytime soon. Therein lies a tremendous opportunity. By lowering deposit costs and lagging rate increases, banks have the potential to generate more revenues than they have generated in a while. Even if customers leave in search of higher yields, any runoff could be supplemented with wholesale funding—which is currently cheap but may not be for long. Just imagine if your costs were slightly less—or even the same—as they are now, and rates increased by 50 basis points (for example). Why Banks Need to Prepare Now for Greater Costs, Revenues 2021, Q4 BANK EXECUTIVE BUSINESS OUTLOOK SURVEY 42% 53% 5% 41% 52% 6% 41% 56% 2% 41% 55% 4% 33% 57% 10% 43% 49% 7% 44% 54% 2% Total Improved Same Worse Improved Same Deposit Competition Fundin 8% 30% 8% 30% 6% 29% 7% 32% 10% 33% 9% 26% 4% 29% <$1B in Assets $1B-$10B in Assets Midwest Northeast South West 42% 53% 5% 41% 52% 6% 41% 56% 2% 41% 55% 4% 33% 57% 10% 43% 49% 7% 44% 54% 2% Total Improved Same Worse Improved Same orse I r Deposit Competition Funding Cos s Loa D 63 8 30% 62 8 30% 65 6 29% 62 7 32% 57 33% 64 67 9 26% 4% 29% 59% 57% 9% 58% 62 55% 71% <$1B in Assets $1B-$10B in Assets Midwest Northeast South West Topline overview of banker expectations for the 12 months ahead, broken out by asset size and region.
13 PUB. 12 2022 ISSUE 3 For more information on IntraFi Network and our products, please contact: Bryan Harper, Managing Director (866) 776-6426 x3422 bharper@intrafi.com IntraFi.com IntraFi Network, Network Deposits, and IntraFi Funding are service marks, and IntraFi, and the IntraFi Network logo, are registered service marks of IntraFi Network LLC. ©2022 IntraFi Network LLC About IntraFi® NetworkSM IntraFi Network is a leading provider of overnight and term funding solutions, the #1 provider of FDIC-insured deposit solutions to U.S. financial institutions, and one of the nation’s best places to work. The company’s network of nearly 3,000 banks—the largest of its kind—brings scale, stability, and the confidence of working with a category leader. Its members include most of the nation’s community banks, minority depository institutions, and community development financial institutions. 2. Increase Your Attractiveness to Customers With competition for deposits expected to increase, bankers should be thinking of ways to make their services more enticing to prospective customers. For instance, reciprocal deposits enable banks to offer depositors access to FDIC insurance in amounts greater than $250,000—security that can otherwise be costly or cumbersome to obtain—through a single financial relationship. Protecting large deposits can give depositors more confidence to bank with local institutions. This helps drive economic growth in communities throughout the U.S. 42% 53% 5% 41% 52% 6% 41% 56% 2% 41% 55% 4% 33% 57% 10% 43% 49% 7% 44% 54% 2% Total Improved Same Worse Improved Sa Deposit Competition Fund 8% 30% 8% 30% 6% 29% 7% 32% 10% 33% 9% 26% 4% 29% <$1B in Assets $1B-$10B in Assets Midwest Northeast South West Topline overview of banker expectations for the 12 months ahead, broken out by asset size and region.
14 www.azbankers.org W H A T A Z B A M E M B E R S A R E S A Y I N G A B O U T T H E C O L O R A D O & A R I Z O N A B A N K E R S A S S O C I A T I O N ' S W O M E N I N B A N K I N G C O N F E R E N C E B E A V E R C R E E K , C O L O R A D O A U G U S T 1 8 - 1 9 , 2 0 2 2 I attended my first Women in Banking conference, and it was such a great experience. From the beautiful location to all the terrific speakers this event was something I will look forward to attending next year. I benefited from so much insightful information that I was eager to incorporate and share with my teams. Thank you for the great experience! Stefanie Callison, SVP National Bank of Arizona It was great to interact with like-minded women in our industry and discuss topics that impact our work. Lindsay Shaw, VP FirstBank I would say the experience at the WIB conference was so good for so many reasons. I had the chance to connect with other women who understand the struggles and joys of balancing our banking career and home life. I had the opportunity to learn from experts in several fields who gave us tools to use in our daily operations. Cheryl Rolland, VP/Branch Manager Pinnacle Bank
15 PUB. 12 2022 ISSUE 3 PLAN ON ATTENDING! WOMEN IN BANKING AUGUST 2023 Colorado The Women in Banking Conference was well rounded, informative, and inspirational. I walked away with new information as well as new ways to think about concepts I had learned in the past, taking those concepts to a new level. I would definitely like to attend this conference again in the future. Jeannie Nguyen, SVP National Bank of Arizona Laura Shaeffer, Director of Operations & Technology National Bank of Arizona Barbara Lietzke-Phillips, Business & Retail Loan Mgr. National Bank of Arizona I thoroughly enjoyed my first time at the Women in Banking Conference in beautiful Colorado. I had the opportunity to network with other women bankers and the content of the presentations was very enlightening. The speakers presented topics that were outside the standard fare for a banking conference, which I enjoyed. The conference was a great opportunity to learn about topics not often referenced in our day-to-day careers and provided the ability to collaborate with fellow bankers to expand our network. Looking forward to enacting some of these great ideas we brainstormed over the next few months.
16 www.azbankers.org 3rd Annual Arizona & Colorado Banker Summit | May 31 - June 3, 2023 Ritz Carlton at Dove Mountain, Marana, Arizona | https://azbankers.org/2023BankerSummit Early Bird Attendee Registration Fee- $600 Standard Room- $249 per night Executive Suites- $399 per night Golf Tournament- $150 per person Guest/Spouse- $125 per person Ritz Carlton at Dove Mountain | Marana, Arizona https://azbankers.org/register email: events@azbankers.org SAVE THE DATES - May 31 - June 3, 2023 2023 Arizona & Colorado Banker Summit Marana, Arizona
17 PUB. 12 2022 ISSUE 3 Scott Vanderpool Bank of America AzBA Chairman Paul Hickman AzBA CEO & President Jenifer Waller CBA CEO & President Mark Hall Vectra Bank CBA Chairman Continued on page 18
18 www.azbankers.org 2023 ARIZONA & COLORADO BANKER SUMMIT Join 100+ of your bank colleagues from Arizona & Colorado along with associate member sponsors at the Jewel of the Sonoran Desert for 4 days of learning and connecting at the Ritz Carlton at Dove Mountain in Marana, AZ David Fragale Senior Managing DirectorWestern Alliance Bank Where the Future Banks | Blockchain & Digital Assets E X P E R T S P E A K E R FEATURED SPEAKERS & SESS IONS Rhonda Blatti Senior Director- ServiceNow Real Talk | Employee Retention E X P E R T S P E A K E R CAMELS Realtime Polling Exercise- The 6 CAMELS Experts Debate & You Decide Who Wins! D E B A T E Jim Hayden CEO- Board Developer How to get what you need from your board E X P E R T S P E A K E R Kathy Moe FDIC Director- San Francisco Region R E G U L A T O R P A N E L - MOD E R A T O R Jason Schechterly One Man's Life Changing Story of Survival O P E N I N G K E Y NO T E Register now at : azbankers.org/2023BankerSummit May 31, 2023 - June 3, 2023 100% IN-PERSON Continued from page 17
19 PUB. 12 2022 ISSUE 3 2023 Arizona & Colorado Banker Summit Schedule of Events Wednesday, May 31, 2023 1:00-3:00 Exhibitor Setup 3:00-5:00 CEO Roundtable 5:00-5:30 CEO Exhibitor Preview 4:00-6:00 Conference Registration Check-In 5:30-7:00 Chairman’s Welcome Reception Thursday, June 1, 2023 8:00-5:00 General Sessions 5:30-7:00 Reception & Emerging Leader/Bank Advocacy Recognition Friday, June 2, 2023 8:00-8:45 AzBA & CBA Annual Meetings 9:00 Emerging Leader & Bank Advocate Graduation 9:00-4:00 General Sessions Saturday, June 3, 2023 7:00-12:00 Bankers Cup Golf Tournament, Dove Mountain Golf Club 12:00-1:00 Bankers Cup Awards Reception & Lunch, Dove Mountain Golf Continued on page 20
20 www.azbankers.org VISIT TUCSON TUCSON, ARIZONA Explore AIRPLANE BONEYARD TITAN MISSILE MUSEUM SAN XAVIER MISSION SAGUARO NATIONAL PARK GOLF Sponsor a Cart $500 Includes 2 Players & Logo on Cart Tournament Saturday, June 3rd Individual Players $150 Enjoy 10% off Spa Treatments when you book in advance HTTPS://WWW.VISITTUCSON.ORG FLY TO TUCSON AIRPORT & 40 MINUTE UBER OR FLY TO PHOENIX AIRPORT & 90 MINUTE RENTAL CAR OR SHUTTLE Continued from page 19
21 PUB. 12 2022 ISSUE 3 M A R Q U I S W I F I S P O N S O R P L A T I N U M S P O N S O R S Continued on page 22
22 www.azbankers.org G O L D S P O N S O R S S I L V E R S P O N S O R S E X H I B I T O R S G O L F T O U R N A M E N T S P O N S O R S Continued from page 21
23 PUB. 12 2022 ISSUE 3 https://azbankers.org/summitsponsorship/
24 www.azbankers.org Kindness is a soft skill. Since kindness can be hard to teach, measure or master, many people dismiss it as a nonessential nicety that won’t make or break your business. They value other capitalist-oriented skills more, such as ambition, grit and skill. Consider a fictional example: Scrooge, the main character in A Christmas Carol by Charles Dickens; people recognize he is a miserable, lonely man, and no one would want to be like him or be around him. Yet Scrooge also fits the idea of the selfish and ruthless business owner who makes money because he is willing to take advantage of others. As the story begins, he thinks any generous act detracting from profit is foolish. No business leader is likely to make similar claims in public, but when they consider the business ideas separate from the man, some might secretly think Scrooge’s ideas have some merit. But this is a big mistake. The soft skill of kindness is not just an important life skill; it’s also an important business skill. Being considerate, friendly, helpful and generous is a strength. It does not mean being a pushover or finishing last. Kindness means giving people the benefit of the doubt and remembering they may be dealing with difficult issues. Kindness can strengthen business relationships within any culture, and many benefits involve employees. When the workplace culture is kind, communication is smoother and more effective, and employees are more likely to trust their leaders. Employees focus on their work and are less likely to compete negatively with other employees. Not only are relationships in and outside the company improved, but research also shows that employees with opportunities to be kind at work feel more loyal to their company. Companies with a reputation for being kind find it easier to recruit and retain new employees. That’s a huge plus, as there are currently more open jobs than people to fill them, and qualified applicants have their choice of jobs. Why Being Kind at Work Matters
25 PUB. 12 2022 ISSUE 3 Who wouldn’t prefer working at a company where they can feel valued and respected? Productivity also improves. Everybody makes mistakes, especially when trying out new business ideas. Employees can safely share information and be more innovative if the work culture kindly embraces learning from failure instead of punishing it. Kindness is most challenging when it requires taking the high road and being kind in response to negative behavior. If you are trying to figure out why someone behaves badly, rather than treating them harshly, kindness is more likely to open someone up, giving them a chance to explain their side. Customers respond positively to companies they believe are kind. When customers interact with a kind employee, a bond forms, resulting in increased customer engagement and brand loyalty. Kindness is also helpful during difficult conversations. When speaking candidly to someone about a problem, kindly delivering what you must say is essential if you want the conversation to be a success. Choosing to be kind doesn’t mean avoiding any discussion of difficult things. Balance honesty with kindness. The goal is to be empathetic and curious instead of harsh. All employees should be courteous to everyone, regardless of status. Smile often. Say thank you. Use a kind, pleasant tone when talking, be clear and positive when communicating, and accurately express your feelings and ideas. The cleaning crew deserves the same level of civility as the company owner. Managers might also encourage employees to help others when their tasks are complete and to be generous about sharing space and material resources when necessary. Be a good, thoughtful and kind listener. Listening skills improve communication, reduce mistakes and encourage collaboration. Make time for others when they need it. If employees need substantial help, schedule a time to work with them. Doing little things, like complimenting someone’s work and recognizing others when they do well, shows kindness. Recognize each person’s strengths and abilities. You can also communicate appreciation with food. If appropriate, a manager could bring breakfast or provide a snack tray during an important meeting. And team-building activities create a positive environment and show you want the workplace to be enjoyable. Since some employees are gatekeepers, their opinions and influence may be larger than you think. Please treat them with respect. Start by introducing yourself and asking for their name if you can’t see their name on a tag or desk when you meet them. If they are busy, keep the conversation to a minimum. If they seem open to small talk, keep the conversation pleasant and neutral. Notice photos and awards. The next time you see them, kindly acknowledge them in a way that lets them know you remember your last conversation. Don’t be overly familiar with people you’ve just met. Avoid terms that might be deemed insulting or condescending, such as “sweetie,” “babe,” “son,” or “dude.” When there is an opportunity to talk with anyone, engage in meaningful but not polarizing conversations, such as talking in a general way about weekend plans, previous work experiences and family. Notice when someone is struggling with a door or carrying large packages, and offer your help. Also, help other people succeed. Recommend people, send them referrals, and be willing to provide expert advice if asked. If appropriate, mentor new employees. Mentoring can involve introducing a new employee to others, training them in their job responsibilities and helping them feel comfortable. Being kind at work — and everywhere else —matters because it contributes to creating and maintaining a more positive world. It makes sense from a business perspective, but it also makes sense from a human perspective. There are no regrets about being kind, which is something you can’t say about everything. w When the workplace culture is kind, communication is smoother and more effective, and employees are more likely to trust their leaders. Employees focus on their work and are less likely to compete negatively with other employees. Not only are relationships in and outside the company improved, but research also shows that employees with opportunities to be kind at work feel more loyal to their company.
26 www.azbankers.org Linda Cohen, the founder of Linda Cohen Consulting, is a professional keynote speaker known as The Kindness Catalyst. A consultant since 2012, Linda has a blog on her website (https://lindacohenconsulting.com). She has written two books; 1,000 Mitzvahs in 2011 and The Economy of Kindness in 2021. It seems clear that you’ve made kindness your life’s work. What is the story behind that? My father called me in April 2006 after his terminal lung cancer diagnosis. He was a family therapist, and he had just turned 70. I was 38, with two young school-aged children. We had a difficult relationship, but I flew to Burlington, Vermont, and we started working to heal our relationship. He lived eight months after that call. Those months and the healing process were a gift. We A Conversation with Linda Cohen, The Kindness Catalyst both found peace; he died Dec. 1, 2006, on my son’s sixth birthday. Five weeks later, I woke up in the middle of the night with the idea that I would do 1,000 mitzvahs (good deeds) in his honor. Completing them was transformative. When I was more than a year into the project, my rabbi suggested that I write a book about it. I thought the project was just a personal experience to help me process my grief, but it changed my life. In 2011, I did a TED talk to share the idea of kindness with other people. My first audiences were nonprofit groups like Girl Scouts, houses of worship and schools. Eventually, I realized how important kindness is in the workplace and why kindness is so important to business leaders. Kindness is important everywhere. Why did you choose to focus on kindness in the workplace? I could see that there were real challenges in the country and the world. Rhetoric was more challenging, and conversations were becoming more divided. Since people spend so much of their day in the workforce, I started looking for good business cultures and organizations that focus on kindness because I wanted to see their results. Also, I started working to bring kindness to the workplace. My first paid opportunities were with local government, health care and long-term health care, and then credit unions. I have continued working with many of these industries. Why does kindness improve the bottom line? My three Rs are reputation, recruitment and retention. When an organization gets a reputation for being unkind, its customers and staff often leave. In contrast, organizations with good reputations have an easier time recruiting talent. The third R is retention. If you tell people that your culture is one way, you hire them, and they discover it’s not true, they will usually leave. What is the easiest way to help business cultures turn toward kindness? Start by listening. Some organizations listen to find out what is happening before they make changes. Schedule multiple sessions of active listening. When an organization gets a reputation for being unkind, its customers and staff often leave. In contrast, organizations with good reputations have an easier time recruiting talent.
27 PUB. 12 2022 ISSUE 3 What’s the next step after the first one? Implementing what you can. For example, a fairly small company had its employees working remotely in the spring of 2020. They couldn’t do their jobs because the schools were closed and their children were home. Childcare is a huge challenge for most women. It should be everyone’s problem, but it falls mainly on women. The company solved the problem by temporarily making the headquarters into a school. Employees dropped off their children at the temporary school, then went home to work. What are your favorite stories about kindness in the workplace that have inspired you? I met a volunteer manager during the first six months of the pandemic. She coordinated 75 working hospice volunteers. April was the usual time to honor volunteers, but she couldn’t do a luncheon and provide recognition in the usual ways. Instead, she put together what she called a porch project. She got some cookies and mugs with the hospice logo, and then she and the other professionals in her organization drove over a large geographical area to thank the hospice volunteers by delivering the cookies and mugs to them. Everyone wore masks and stayed socially distanced, but they could see each other eye to eye. I heard the second story when I spoke at a women’s leaders event for a major retail chain. I addressed contagious COVID was, so he made sure he knew what they needed and gave them hand sanitizer, lunch and water. Later, when the staff returned to the office, he had them work Fridays at home that summer, beginning in June 2021. He knew they could work remotely and get their job done. He made people feel valued and appreciated. Do you have other mentors who have helped you along the way? When I began speaking professionally, I joined the National Speakers Association. Keynoters, trainers and consultants are all members who have helped me 100%. I wouldn’t be at my current level without their encouragement, and I have encouraged others, too. What are some lessons you have learned from them? A fellow speaker once said, “Curiosity didn’t kill the cat; comparison did.” Celebrate your wins before you start working on conquering the next mountain. Also, build a bigger pie in your life. I try to live a life of abundance, not scarcity. Choose to live in a place of abundance. Tell yourself different work and a better client are coming when something doesn’t work out. What do you want readers of this article to remember about you and your work when they finish reading it? What is the main takeaway? I invite you to become a kindness catalyst, too. Humanity wants more kindness, and we are disenfranchised without it. When people are surrounded by kindness in the workplace, they are healthier, happier, less stressed and less burned out. Real-life research in the last decade supports that conclusion, and more research is continuing to come out. w Linda lives in Portland, Oregon. She and her husband have two adult children and one Cavalier King Charles Spaniel. To learn more, please visit lindacohenconsulting.com. 250 women, with only three men in the audience: the CEO and two vice presidents. They were working in the grocery market, and I asked them to share a time they had received kindness from a manager. A woman raised her hand. A decade earlier, when she was in her 20s, she worked in a different state than her family and missed them very much. The manager called her in at Christmas and instructed her to buy a ticket the company would pay for, take a week and visit her family. That was a huge gift; you never get that holiday week off when you are in the retail business. One of the three men in the room was the boss who made that Christmas trip possible. I got choked up, witnessing that. It reaffirmed the rippled effect and how long somebody might hold on to a remembered kindness. Most people don’t forget. What is the most important lesson about kindness that you’ve learned? I have three lessons, not one. 1. The size of the kindness doesn’t necessarily matter. 2. Kindness has a ripple effect. Even one act can make a difference. 3. It is harder to receive kindness than it is to give kindness. Many people struggle with receiving, but when we receive kindness gracefully, we let them give us an important gift. Thank you is a complete sentence, and we should practice it regularly. Do you have a story to share that you heard after a presentation? In my book, I wrote about one gentleman who was in the senior living world before the pandemic. He was the franchise owner of a home care business. He wanted to recognize people in their work because he knew they were working with elderly adults. This business owner would meet on Mondays at the beginning of the pandemic with front-line homecare workers. It was still unclear how
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