What Bankers Can Learn from Baseball’s Biggest Blunder

On June 2, 2010, baseball history was made. Armando Galarraga, pitching for the Detroit Tigers, handled twenty-six consecutive batters without any of them reaching first. He was about to do what, at the time, only twenty pitchers in the history of baseball had ever done: pitch a perfect game. The 27th batter hit a grounder which was fielded and tossed to Galarraga covering first base. Although the runner was clearly out, as the videotape painfully revealed through thousands of airings, Jim Joyce, a veteran, and highly respected umpire, called the runner safe, depriving the pitcher of his place in history.??

This was truly a life-changing event.?Not only would the pitcher have joined one of the most exclusive clubs in the history of the world, but his market value and, hence, income potential would have been instantly aggrandized.?It could easily have been a $10 million mistake.?

Instead of bitterly denouncing the call, Galarraga took the high road and expressed no hard feelings while publicly forgiving Jim Joyce. The next day, Joyce was behind the plate and Galarraga’s coach sent him to hand him the lineup card and the two of them warmly shook hands. Jim Joyce, for his part, was almost in tears when he apologized publicly to Galarraga in a televised interview and implied that this mistake almost obliterated a shining career spanning 22 years in the majors.

Everyone associated with this terrible mistake, Armando Galarraga, Jim Joyce, the coaches, and even the commissioner, helped turn this tragic mistake into an illustration of the grace and humanity that people can muster, even when they have ample reason to act otherwise.

Where’s the connection to banking? Banks, like all businesses, make mistakes. The fact is that banks make mistakes, not because they are sloppy or incompetent but as a very transaction-intensive enterprise there are far more opportunities for making mistakes. Take a typical small- to mid-size business owner who might have a brokerage account with an investment advisor with dozens of transactions a year. Their business banking account(s), by contrast, are likely to have thousands of transactions each year, creating a fertile environment for mistakes.

As both a bank customer and a consultant and service provider to banks, I have observed a generally poor job that banks do in recovering from mistakes.?As we have counseled our bank clients, people who have been victimized by banks or any other businesses are generally looking for three things in the wake of the mistake:

Acknowledgment.?A straightforward and unambiguous admission that a mistake was made, in other words, “we screwed up”.?Even more effective is taking personal responsibility (if it applies) for the mistake.??The two responses that elicit the greatest anger and resentment are “We never make mistakes” and “Headquarters dropped the ball” with the latter response undermining both the institution and the integrity of the speaker.?

A sincere and genuine apology.?Sometimes, all the offended party needs to hear is “We made a mistake, and we are truly sorry”.?Even the most egregiously injured customer would have a hard time staying mad when such an honest and non-defensive position is articulated.

Making it right.?If the customer suffered any economic consequence of the mistake (overdraft charge, maintenance fee, etc.) offering to fix it (waiving or refunding the fee) is the last ingredient needed to defuse the situation. For many, doing an exemplary job with #2 above obviates the need for #3.

It’s important to point out here that there is a small percentage of customers for whom no amount of contrition or attempts at making amends will ever satisfy them. So why don’t all banks and bankers flawlessly execute these obvious remedies??

Several reasons:

Raw material.?For most banks, it is their least-educated, least-skilled, and lowest-paid people who represent the “first line of defense” for these customer interactions.

Training.?Like anything else, handling angry or aggrieved customers is a skill set that can be enhanced through training and coaching.?Having clearly defined guidelines for what to do and having procedure manuals that are regularly reviewed by staff is important as well.?

Alignment.?When the goals and objectives of the Bank are the same as those of the staff, alignment occurs. Very few banks that I have encountered have really succeeded in this regard.??While mending customer relationships warrants a dedicated article on this subject, the bare-bones approach that works must include:

• Establishing clear, measurable, and realistic goals
• Measuring performance against those goals
• Rewarding performance against those goals

Without this kind of alignment, you have people in the organization pursuing their own agendas that may not reflect the values of the Bank.

The fact is that an angry customer can represent a wonderful opportunity for a bank to build and cement a healthy working relationship.?If you can handle your customer adroitly in a professional manner, you can not only preserve the relationship but also have an advocate in the community.??

Our primary business is making appointments for small business, middle market, and commercial bankers to meet with owners and CFOs to consider a new banking relationship. We get to interact with unhappy bank customers all the time and hear all the shortcomings of their current relationships.

Through our calls, we encounter former customers who left the bank in anger and the bank often has no clue as to what transpired and why they left. We report these situations to the bank immediately and have found that when a bank quickly responds and follows there is a reasonable chance that the customer will come back.?At the very least, they are impressed by the Bank’s genuine and timely response.

Unless your bank has no humans in the workforce, it’s a good bet that mistakes are going to be made. While you shouldn’t diminish your efforts to eradicate mistakes completely, it’s critically important to develop and implement a plan to give your people, especially those on the front line, the tools to defuse angry feelings, turn mistakes into opportunities, and rebuild relationships that have gone sour.

Armando Galarraga had every reason to resent, rebuke and recriminate against the man who stole his perfect game. His behavior and that of Jim Joyce will serve as a model for years to come for turning a terrible blunder into an opportunity for grace and professionalism.?We know that your bank will have such opportunities.?It’s what you do with them “when the rubber meets the road” that will prove their mettle and place in the great competitive arena.

-Ted Rosen

Ted Rosen is president of Expert Business Development, LLC, based in Radnor, PA.?EBD helps financial institutions and businesses acquire, expand, and retain commercial relationships through professional calling programs, event marketing, and survey outreach.?Mr. Rosen is a frequent presenter at banking conferences.