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Do you want to “work big” or “work small”?

As industry hierarchy evolves, lenders must decide what’s most important to them

“There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that. “There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that.

There was an interesting article in The Wall Street Journal last week reflecting the trend of Americans workers being employed by very large companies. This represents a significant shift in recent years, where now more than 25% of all workers are at firms employing 10,000 or more persons.

There are many factors propelling the growth of large companies. Macro-trends favoring the economies and efficiency of scale have been important considerations for years. Big manufacturers favor big parts and materiel suppliers; big retailers favor big distributors. The tendencies toward scale are often mutually reciprocating across a broad spectrum of industries.

We see this in banking, especially those firms with global product reach and operations on multiple continents. In fact, the growing size of banking’s largest customers is the oft-cited reason for the need for very large banks capable of addressing the scale of their customers’ business models.

These are the institutions most people think about in the phrase “too big to fail.”

What should young people focus on to help figure out whether to work for a big company or a smaller one?

Arguments of money versus nonfinancial satisfactions

There are two significant advantages of larger employers over smaller ones from the viewpoint of the employee. These generally apply to all industries.

First, large companies have significant advantages in presenting themselves as attractive long-term career choices.

They generally can—and do—pay better than smaller firms.

Second, the diversity of work experiences can be very attractive from the perspective of the employee’s personal growth.

These thoughts have led me to consider the relative strategic career advantages of working with industry giants versus community or smaller regional banks. For a young person in the early years of his or her career, are there clear advantages to one course or the other?

There’s no doubt that achieving the upper rungs of a very large financial services company can make one wealthy. The dollars and perks may even perhaps range beyond one’s capacity to truly appreciate that, given a relatively young age.

So one consideration is to determine how important financial compensation is. Let’s be honest—and candid—about this. Money is important. It affords a wider variety of personal choices and it assures one’s children of such things as educational opportunities beyond the reach of much of the general population.

Yet as CEO of a regional bank in New Mexico, I was able to live where I wanted in town and my family didn’t do without anything we needed of a tangible or financial nature. I didn’t fly around on company aircraft nor was there a car and driver to whisk me to work and my appointments. I wouldn’t have ranked those things very high on my list anyway, particularly as I grew older.

The real question that young people have to address these days is the type of work and experiences they are likely to achieve at institutions of widely differing sizes. A very large bank provides an enormous variety of work opportunities ranging from geographic locations to developing skill sets that afford very broad choices in job functions. And big companies are as a general rule more deliberate and formal in developing employees in the functional skills sense.

Different paths from a lender’s perspective

In trying to figure out these strategic factors as they might fit me, I’m not talking about choosing which functional area of the bank most interests me. Rather, I’m a lender by training and experience and lenders’ prisms are the lenses in my career glasses.

But viewed from that perspective, my career options today if I were new to the business would be very different depending on the size of my employer. Some examples:

• Would my customers and prospects be Fortune 500 companies and occupants of the C-suite?

• Would they be owners and entrepreneurs of smaller businesses?

• What sort of impact are my customers making on the local conditions of my hometown?

• What sorts of impact am I going to be able to have on how well they and my bank collectively do?

• Will customers view me, their banker, as a fundamental resource to their business? Or simply as one of many portals to banking services?

Based on nearly 50 years in the business, my head and my heart lie on the community bank side of the size question.

Satisfactions on the small end

Community and small regional bank lending inserts the banker as a key cog in the economic life of the community.

The customer and often the customer’s family members become friends as well as clients. Business is very personal at the community bank level and there are several reasons for this.

First, a lender who has the opportunity to work with a customer over a several year period gets to know the company and its principals pretty well.

I’ve helped my customers pay college tuitions, marry off sons and daughters, and been part of their personal as well as business activities. It’s very up front and personal and enormously satisfying.

Second, community and regional bankers recycle community and wider area resources between savers (providers of funds) and users (borrowers).

What we do is reflected in the very face of the community. It’s less the skyscrapers or industrial factories and more the ability of the community to show a prosperous face on its infrastructure and general quality of life that makes each community different from any and every other.

Ditch the aquarium view of working life

Some describe the differences owing to size as between being a big fish in a small pond or a small fish in a big pond.

I say that’s nonsense.

To me the tine of the fork in the road leading to community banking results in being more directly a participant in the quality of community life. Perhaps another way to describe this is to be directly immersed in the common good of one’s community.

Banking pays pretty well too, even at the smaller end of the size spectrum. After all, bankers need to have specific skill sets and lending has become quite specialized. To recruit and retain qualified staff, salaries simply have to be at least competitive and for the top people, they are usually that and more.

My advice to young people who are thinking about a banking career or to those in banking who are discouraged by the effects of reputation risk inflicted on our business, I say that I can’t imagine anything else as consistently rewarding in both financial and psychic terms as a commercial lender and ultimately as a regional bank CEO.

I felt that I was making a difference for my customers and for my community. How many adult members of the workforce can say that today?

And here’s the “secret” hidden in plain view: Probably many if not most experienced commercial bankers would say just that today, if asked.

Ed O’Leary

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.

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