The head of Hawaii's largest financial institution explained how appearing in a series of television ads, among other critical decisions, helped the state's largest financial institution turn its performance around over the past three years.
"We're very different than we were in the year 2000," said Mike O'Neill, who took over in November of that year as Chairman and CEO of Bank of Hawaii and Pacific Century Financial Corporation.
Since then, O'Neill has become a familiar face in the islands as the starring spokesman in a series of ads that encourage customers to let him know what they want. Doing those ads "was a very humbling experience," O'Neill told BYU-Hawaii business students at the weekly entrepreneurship lecture on Nov. 4.
Part of the turnaround came as the result of cutting back operations so they were closer to home. O'Neill explained when he came on board Bank of Hawaii had about 180 branches spread throughout Asia and the Pacific. "Today we have fewer than 100, primarily in Hawaii. Did I come home and say, honey, I shrunk the bank? Is that leadership?"
"Are leaders born or are they made?" O'Neill asked. "I firmly believe they are made. Everyone can learn critical leadership skills, but part of being a leader is making tough decisions."
"Eliminating all those branches and positions was quite a problem with many people. We were everywhere, on lots of islands," he said, pointing out the bank wasn't making money in many of those locations.
"We had also made a number of bad loans in Asia, and we lost our bond rating," O'Neill said "We were down to the lowest grade. We were paying more for the money we were borrowing. Worst of all, our stock had dropped to $11.28 in October 1999. That was a nine-year low."
That same year, Bank of Hawaii had reduced its service levels and increased fees. "We had quite strong reaction from our customers," O'Neill continued. "The first thing we did was take a very analytical approach. You've got to do things by the numbers. Set up the process, and stick to it. Having that sense of urgency is critical."
After selling off some of their foreign branches and using the gains to write off debts, "then the issue became, let's work on some of these problems," O'Neill said. "We had layered on this nice business a lot of things that didn't work. Taking it apart required a lot of courage."
He added he was guided by what the former head of G.E. said, "Look at reality the way it is, and not the way you wish it were. Somebody else said, hope is the worst thing that can happen to management."
O'Neill pointed out Bank of Hawaii has fixed its loan portfolio and is regaining the confidence of its customers. "That satisfaction will continue to improve. Very importantly, our stock closed yesterday at $40.11 -- an all-time high," he said.
"Having insights, generally, isn't that tough. What's tough is to make those facts consequential -- to actually go out and do something about it," O'Neill said. He then listed eight principles that have proved effective in his own leadership approach:
"Seek accurate, timely information. Getting information is a tough job, and good leaders can sift fluff from fact," he said.
"Face reality. Don't avoid the truth with products and people."
"Seek the best employees. Anything less and you do your company a disservice."
"Remove barriers. Don't restrict yourself to seeking the familiar."
"Fix bad ideas."
"Informal is a lot better than formal."
"Keep raising the bar. You'll be amazed at the heights people can reach. The wonderful thing about leadership is you can inspire people."
"Have some fun. Celebrate small victories."
In conclusion, O'Neill quoted Colin Powell, who said, "Leadership is about solving problems."
"Make the most of your opportunities," O'Neill said. "Leading others is a privilege, and not a right."