Volume 1, Issue 1
Table of Contents

Miscellaneous
• From The Publishers
• Last Look: Syd Farber

Cover Story:
Where’s Everybody Going?
What’s causing some small businesses to pack up and leave? And what should we
be doing to stop them?

Feature Story:
The Excessive Costs of Doing Business in New York
A productive Small Business Day in Albany, but worries still exist for Rockland-ites and other New York based businesses.

Feature Story:
How’d They Do That?
Follow Provident Bank CEO George Strayton’s strategies for success.

DEPARTMENTS:

Economics Roundup
• The Smart Investor
• Money Talk

Business Roundup
• Unlock Your Potential
• Marketing By Design

Retail Round-Up
• Talking Shop
• Odds & Ends

Ask the Expert
• Estate Planning
• Mortgage Advice

Invest in Your Community
• The Bottom Line
• First Annual Non-profit Leadership Summit

Dedicated Section:
Rockland Business Association:

The President’s Desk
A new voice for Rockland County and a new advocate for its hottest issues and concerns.

Pinnacles of Success
RBA’s best honored at the
Third Annual Pinnacle Awards.

RBA Happenings
• Committee and Council Info
• Calendar of Events
• New Members

So how did George Strayton grow Provident Bank from a local community bank founded in Spring Valley in the late 1800’s into one of the area’s powerhouse financial institutions?

With 35 branches, Provident provides everything from state-of-the-art online technology to an array of products to meet every need, from basic checking for a Pomona mom-and-pop to sweep accounts for a Fortune 500 account. In an age when mergers and acquisitions are creating mega-banks that often lose their sense of community in the transaction, Provident has not only tripled its revenue in the past four years, but maintained its bedrock foundations right here in Rockland.

We caught up with Strayton at his office in Suffern to discuss a range of issues. He was animated, reflective and shared many words of wisdom. Rockland Business Digest wasn’t interested in an economic forecast, or if Provident’s stock might split again; instead we were interested in how he grew his company, so that other business owners could apply some of the concepts he shared with us.

"When you plan properly, and you think about all the things you need to do, and you begin to put them in place, what you're doing is positioning yourself to execute."

So, How’d He Do That?

RBD: Provident has had a lot of success under your leadership, growing impressively from a handful of branches to 35 today. Provident’s revenues have tripled in the last four years. What strategies led to that growth?

Strayton: You can’t think short term. Everything starts with a long-term strategy, so the bank has always been involved in planning. Planning is key, and unfortunately many small businesses are so involved in getting through the day-to-day that they might spend, oh, just two to three days a year taking a look at where they want to be five years from now. I’m a great believer in asking, “Where would you like to be three to five years from now, and what’s your ten year vision?” That’s something you need to plan for.

RBD: You’re saying small businesses are not really taking the time to actually look at the big picture?

Strayton: Absolutely. One of the things I have found over the years is that a lot of companies lack the information that could help them succeed. I could get the info I need from various sources, analyze it, then go in and tell the company president more about his business than he knows—because he doesn’t take the time to sit down and do an analysis of his financial statement. Accountants don’t do that anymore. Many years ago, the partner would come out and visit the company once a quarter and have a discussion with the CEO and so there was a dialogue about the bottom line. 

"Recognition is more than money, it's more than benefits, it's what people want."

RBD: What changed?

Strayton: It got too expensive for a partner to come out, and so the junior was sent out. Now, in fact, with our new technology at Provident, you can have your statements go directly to the accountant’s office on the Internet and you don’t need to see anybody! (laugh) But, Provident has done a lot of planning, whether it was going public in the early 90’s, our expansion, and so forth.

RBD: The biggest part of your growth is planning, but there has to be execution though, because …

Strayton: You just took the words out of my mouth. At one of the analysts meetings, someone asked me, “What’s your next acquisition?” And I said, it doesn’t work that way. You don’t know. When you plan properly, and you think about all the things you need to do, and you begin to put them in place, what you’re doing is positioning yourself to execute. Over the long haul, you find the things that you did five years ago, or seven years ago, really laid a foundation. I’m a great believer in building a strong foundation.

RBD: How much flexibility do you build in?

Strayton: Well, you have to be somewhat flexible. So you’re building a plan and things can change.  As an example, this morning we had some news that Chase is buying all Bank of New York branches. Well, that’s an opportunity in the marketplace. What are we doing about that? So, when I said to you before that you need to be in a position to execute, we were; whether it was with National Bank of Florida, Ellenville or Warwick, or when we bought Republic Bank or any others, those things came up. You know, you happen to be out fishing and all of a sudden someone finds out you’re interested. They don’t necessarily come up when you want them to.

RBD: Is it hard to deal with shareholders, customers and employees—especially since they don’t always have the same interest?

Strayton: You have to satisfy your customers, because if you simply satisfy your shareholders, that is short-term in nature. There’s things you do that your employees won’t be happy with, your customers won’t be happy with, but your shareholders might be happy with. Again, that’s a short-term approach. Over the long-term you need to keep all three constituents happy. 

You need to keep happy employees…why? Happy employees make for happy customers. Why make happy customers? Because they’ll make happy shareholders. Any well–run company will have all the shareholders knowing that it’s in their best interest that they have really engaged employees and staff at whatever organization they own. Because that’s the way those customers are going to be satisfied the best. And ultimately it will be for their benefit. 

"So you need to be able to identify what's changing and how do I get out in front of that. I don't want to be on the edge; I like to be a fast number two."

RBD: Speaking about engaged employees, this is where we hear from businesses in Rockland. How do you keep your employees engaged and motivated?

Strayton: Well, I’ll tell you…none of us ever do enough of this…the first thing is recognition. It’s from saying, on a daily basis, “Hey Ken, what’s going on with your life?” to group meetings to presentations, and quite frankly, we try to do it all. I’ve never seen an organization that did enough of it. Recognition is more than money, it’s more than benefits; it’s what people want. It doesn’t mean you can get away with not paying appropriate benefits, but you can pay all the salaries in the world, and the benefits in the world but people will be unhappy because they feel they are not recognized for their contributions. 

At Provident, we have a constant focus of trying to recognize the high performers with officer meetings, employee sales rallies, and sales bulleting that recognizes: ‘home runs…triples…and doubles’ and stuff. And then, for those who are not doing well, what resources do we have to bring them? Do they need more training? Do they need somebody to hold their hand? Because we think everybody that’s out there can be successful. It’s our challenge to figure that out and how can we get them to be successful. 

RBD: What are some of the basic principles you believe in to help businesses succeed?

Strayton: For an organization to grow, you need to rely on basic business principles. Here’s a simple example: You have a business and you know your inventory—in your head. Then you buy two more stores. By the time you expand to four stores, if you still have the inventory in your head, you’ll be lost. You won’t know what’s disappearing, or what the sales are. You need to build an infrastructure. This is a business without a foundation. Build the foundation when you have one store—and really don’t need it—and it will be there as you grow.

RBD: It’s very true. Has Provident had growing pains through the years?  

Strayton: Oh sure, you never stop it, but you mitigate it by taking a look at succession planning, which we’ve always done. Who is taking whose place? I think what drove us, to some degree, is long-term technology planning. Because we’re in a business, like most businesses quite frankly, that’s evolving. And the pace of change has been dramatic over the last few years. So you need to be able to identify what’s changing and how do I get out in front of that? I don’t want to be on the edge, I like to be a fast #2. 

RBD: Not an ‘early adapter’ kind of guy? (laugh)

Strayton: In 1999 we changed our entire technology platform. We brought in a commercial bank platform. We were probably one of the first banks in Rockland to deliver checking images, overnight, online. Our customers could access checks the day after they paid them. They could confirm the check, they could print it out, email it—whatever they wanted—the next day. 

RBD: So the customer got it right up front as opposed to after processing, right?

Strayton: Correct. The issue of being able to deliver that over the Internet was instantaneous. They key is that we recognized we needed a partner that was headed in that direction and we brought them onboard. For small businesses one of the keys is to decide, ‘who are my strategic partners?’ Typically, you’re not going to develop those resources yourself, and those strategic relationships become really critical.

RBD: Lets talk about planning for a minute. As the CEO of a public company, how do you prioritize and plan what needs to be done and when?

Strayton: Well, as I said, we want to plan, so I start working kind of backwards. For instance, I have 12 board meetings this year. What do I have to do at every one of those board meetings? What’s required? What isn’t? I put a plan together and then keep track of what’s going on with that plan. 

We also have various committee meetings—banking or loan committees—so all that information comes into account, and then we begin planning from there. What does the bank need to get done on a quarterly basis? Or what does it get done on a monthly basis? Based on the performance of reality versus the plan, I begin to look at those particular issues, as well as my senior management team. And we begin to focus on those issues that we thought were going to happen. Why didn’t they happen or why are they happening? 

Before we made our first commercial loan in 1984, we spent 18 months writing a policy with the board. And that process really got them engaged in why that business was different than what we were used to doing. The point is, you need to be looking forward. My job is not getting back to that; that’s what my staff does. And does it well. My job is saying, “Where do we need to be tomorrow”? Where do we need to be the year after that?” 

RBD: What are some lessons you’ve learned about the delivery of customer service?

Strayton: It’s like any business’… once you get out there and understand it…, it’s not rocket science. And I guess everybody feels like that about their own business, but our business is…you know, it’s really about the customer. Letting them know that you know what? …. You may not know the answer but you’ll get it and you’ll be back to them. The key is, again, the customers. Like any large organization occasionally a mistake can be made. But you can win a customer by how you respond to that mistake that really counts. We have a customer care center that really does a nice job and they’ve been working at reducing the number of phone calls and they’ve reconfigured their workload. They now can measure calls.

RBD: While we’re speaking about customers, what is your strategy to attract new customers?

Strayton: Our best customer comes from word of mouth. We have advertising, a new logo (it’s not so new any more), but our theme is “connecting people with opportunities.” I call it 1950’s banking with 21st Century technology. Today any small business person could go into any Provident branch and talk to someone about a small business loan. Every one of our branch managers does that. And they knock on doors of people that are ready to do business with them: “How are you doing?” “Did you know about this product?” “Did you know about that product?” Our commercial lenders will call our small business lenders. Our community bank lenders. And then, beyond that, we have 18 commercial lenders in the Hudson Valley that will come out to your business and do the $3 million, $2 million or $1.2 million dollar loan. 

RBD: Well the “word-of-mouth” really keeps the customers coming back…

Strayton: Correct. But we back that up with advertising on various levels. We started cable television a couple of weeks ago. We’ll do direct mail. Clearly print media gets into most houses so that’s the primary focus and has been for a long time. Until that changes, the print world is half the bulk of what we do.

RBD: So, cross sell?

Strayton: Marketing brings the customer in the door. If they’ve seen a product they’re interested in, they walk in to talk to somebody about it. Somebody in there has to explain the product in an appropriate way and close the sale. While they’re there, often they’ll find out there are other options they might be interested in. That individual dynamic becomes real key. 

 RBD: Right, forming a strong, lasting relationship. 

Strayton: That’s what it’s all about. People often don’t bank at the bank; they bank with Mary, Frank, and Murray. My mother banked with Murray (laugh). And she’d wait for Murray…I’m serious (laughter). But I really believe a lot of that. The commercial lenders are always involved in different events where they’re trying to create relationships with lawyers, accountants, professionals, again to let them know what we do, and how we do it, so that if something comes across their desk they say, “Gee, I know Chris Fiarello up in Middletown.” 

RBD: Regarding networking, most people know you were the Chair of the RBA for 2 years and your company’s still very active. In your view, how can members get more business from networking?

Strayton: Look, RBA is the best networking organization we have in Rockland County. The RBA provides a number of vehicles for different organizations and different sizes. The RBA has provided a lot of leadership, both on the political side, and in trying to organize people and facilitate positive action.

As I got involved, I realized that some people really aren’t comfortable in different environments and so what the RBA provides is a number of different vehicles for people. Another good thing about the RBA is that its board members are made up of a cross-section of the membership—large and small business owners are represented. I think it’s terrific. It’s not controlled by just a couple of people. There’s a level of consistency as well as a level of change.

RBD: If I’m a business owner, how would I put some of these great thoughts on growing and maintaining a business onto one index card? 

Strayton: Geeze, that’s hard! I guess I would just go back to where I started and stop and think. (pause) Give yourself some time to think about your business and where you want to be. It’s all about planning.

One minute drill

Favorite book:
Any and all history books. Currently I’ve been reading about Ben Franklin, then I went to Alexander Hamilton, then I got into George Washington, who interests me. I’m currently in the French and Indian War and the pre-revolutionary period. What’s interesting—from a political perspective—is that it was horrible back then. I mean, we always think today is so bad, but it isn’t! The same thing was going on back then…the fighting between Hamilton and Jefferson, all the inter-play and subversion…you look back and it amazes me.

Must read magazine:
I’m a newspaper guy. I read the newspaper every day. I read Golf magazine. I read American Banker every day, as you would imagine. (laugh) Every once in a while I glance at the Wall Street Journal. But I stick with my books and newspapers.

Baseball team:
Mets fan. Been a big Mets fan for years. And I’m also a Nets fan. Have Nets season tickets. They had a ten game winning streak. They beat the Suns by a 40-point lead this season. 

Football team:
Giants. 

Favorite Rockland pastimes:
We’re moviegoers. We like to go out to the theatre as well. There are a lot of nice restaurants in Rockland.

Favorite restaurants:
Romolos. It’s near our house and it’s a nice place. We enjoy going over there. We also like Marcellos in Suffern.

George is married to Victoria, and has three boys and a girl. None of his children are in banking. RBD

About Provident Bank:
Headquartered in Montebello, N.Y., Provident Bank, with nearly $2.6 billion in assets, is an independent full-service community bank. Provident Bank operates 33 branches that serve the Hudson Valley region, including one office in Bergen County, N.J. The bank offers a complete line of commercial, retail and investment management and trust services.

A Community Partner:
Provident Bank Charitable Foundation Connects People With Opportunities

Another key to Provident Bank's growth and success is its continuing emphasis on community philanthropy. Through its Provident Bank Charitable Foundation, the bank provides a range of gifts and grants to area charitable organizations that range from the Girl Scouts to the Rockland Historical Society to the Ellenville School District.

Provident believes in having a strong community presence in each area the bank has a branch. "The objective of the Provident Bank Charitable Foundation is to establish and maintain a strong connection with our area's most vital organizations and services," says George Strayton, President and Chief Executive Officer of Provident Bank, announcing Provident's most recent contribution to Volunteer Counseling Services of Rockland, which received $10,000 in April of this year. "The VCS has created a program that creates zero tolerance for domestic violence in our communities. We are proud to offer our support to this much-needed program of services."

The Provident Bank Charitable Foundation was established in connection with the second-step conversion of Provident Bancorp, MHC and related stock offering of Provident New York Bancorp, which is the stock holding company of Provident Bank. According to Strayton, Provident believes deeply in supporting organizations and programs that improve the quality of life in the neighborhoods where the bank has a presence, with an emphasis on health and human services programs, as well as youth and educational initiatives in Rockland, Orange, Sullivan, Ulster, and Putnam Counties in New York, and in New Jersey's Bergen County.