From dress to success … Celebrating 125 years (Columbus and the Valley magazine, January 2014)
by Jim Lynn
By Jim Lynn
From a dress, a savings account. From a torn hem, a culture of the heart. From $60, an institution that became a cornerstone in the development of a community.
A woman working in the Eagle textile mill in 1873 had no place to keep her savings. She said if she kept money in her storage trunk, presumably in a boarding house, someone was sure to steal it. So she stored cash in the hem of her dress. But the dress got caught in a machine one day. A supervisor quickly freed the woman by slicing through her dress with his knife, and $60 in “greenbacks” fell to the floor. It was a lot of money when the highest wage for workers at the mill was $1.50 a day.
Columbus industrialist and Eagle Mill founder William H. Young offered to keep the money for the woman in the company safe. The same perk was soon offered to other employees, and the mill’s “savings department” was formed.
In one version or another, the story has been told many, many times. The workplace accident was described in some detail, though, during an 1883 hearing of the Senate Committee on Labor and Capital, which was examining post-Civil War working conditions in the South. Young testified that the savings department at that point had $1 million in deposits, and 6 percent interest was being paid to its 1,778 depositors. Other historical records indicate the mill used the deposits for “quick capital.”
“The largest depositor… has $9,128.95, which he has saved out of his surplus earnings since he has been with us, that is, during the past 10 years,” Young told the committee. “He has a family and has supported his family well, yet his deposits have accumulated to that extent.”
Establishing a culture that carries through to the modern era, the Eagle’s savings department helped get 19th Century Columbus residents through bad times. In one of several recessions, the department backed $300,000 in “shinplasters,” or script, that kept food on tables and kept the local economy from faltering.
Operating more or less as a community bank, the Eagle Mill savings department eventually prompted Columbus business and civic leaders W.C. Bradley and G. Gunby Jordan to start two banks in 1888. Those banks merged in 1930 to become Columbus Bank & Trust.
We don’t know the woman’s name, how old she was, or what she was doing when her dress was ripped. We don’t know if the woman’s descendants are customers of Synovus banks today. But her mishap set in motion the creation of one of three corporate institutions – the others being the closely related WC Bradley and Jordan companies – that have defined much of the community’s development and civic history.
“If there is a moral to this example of corporate serendipity it has to be that good leadership leads to good things,” said Columbus historian and journalist Billy Winn. “While CB&T has always had a good financial reputation in this community, the public’s admiration for the institution is really based on respect for the bank’s leadership over the years.”
From William Young forward, through Jimmy Blanchard’s reign and now Kessel Stelling’s, the bank has sought and generally succeeded at two driving missions – to grow the bank and to grow the community. “From the very beginning… CB&T has been an integral part of the city’s growth and development,” Chamber of Commerce President Mike Gaymon said. “And they are an extraordinary example of corporate servant leadership.”
The company has a tradition of being “about much more than banking,” Winn continued. “They have reached out to the community by investing their time and money in civic projects and development to an extent that really is remarkable. And the involvement of the bank’s officers, board members and employees has been personal, not just corporate. In fact, it is virtually impossible to imagine what Columbus and the surrounding area would look like without CB&T’s commitment to the community and its people.”
The bank’s history is built on a culture we now know as “the culture of the heart,” one that’s been a constant since the knife sliced through the dress.
“A hundred and twenty-five years is a long time, and not a lot of companies can say they’ve been around for that long,” regional CEO Billy Blanchard said. The company started with “an act of service, an act of kindness, and we still hold that value. That’s still what we’re trying to do today.”
It’s Blanchard’s father who’s most identified with the bank’s celebrated culture, the hallmark of which is treating employees, or “team members,” as if they’re at the top of the corporate pyramid, rather than the bottom. Jimmy Blanchard was not afraid to use the word “love” when talking to or about the bank employees. He became a larger-than-life figure in town, seeing a broad stage beyond the board room. With his legendary stories and his signature Wynnton drawl, Blanchard led his bank, and his community, through much of CB&T’s modern history.
“Those were golden years in many ways,” he reflected recently
“The culture of CB&T and Synovus is a culture that the bank inherited from its founders,” he said, referring to W.C. Bradley and G. Gunby Jordan. “There was a strong culture of service and of giving, of entrepreneurship and citizenship. So when I came along, the culture of the bank by that time was alive and strong.” Blanchard succeeded his father as the bank’s president in 1971 and remained at the helm for more than three decades, a period of the institution’s strongest performance.
“This culture thing, to me as a former CEO, is one of the most interesting and most important aspects of the 125 years of the company,” he said. “… It’s not without its critics, who say it’s too soft or too benign, but from an earnings standpoint, there was no banking company in America, large or small, that came anywhere near the record we achieved.”
Blanchard and other Georgia bankers pushed the General Assembly in the mid 1970s to permit banks to acquire other banks outside their home counties. And in the mid 1980s, federal bank deregulation let banks expand across state lines. Those two moves helped the company expand throughout Georgia, and eventually to banks in Alabama, South Carolina, Florida, and Tennessee.
Those years saw Blanchard and his bank growing their banking reach and their political might. Getting things done in Columbus meant getting Bill Turner’s blessing and Jimmy Blanchard on board. Blanchard led the charge for a referendum on air conditioning the city’s public schools, a plan to build “developmental highways” throughout the state, and other high profile and sometimes controversial stands. The make-things-happen model was reminiscent of the well-chronicled relationships between Atlanta bankers and political leaders in the 1960s.
“We were activists,” Blanchard said, now more open about his approaches than he was at the time. “We (would) take stands, back candidates. We were very proactively political.” It was the classic two-way street. The best way to make CB&T Bancshares and later Synovus successful, Blanchard said, “was to make sure the city grew and prospered.”
The approach naturally fostered some degree of populist resentment, from what was blandly called “the Talk Line crowd,” after a popular talk radio show. Blanchard credited newspaper editors Tom Kunkel and Jack Swift for unwittingly softening that anti-bank edge. The “Beyond 2000” public journalism project of the late 1980s fostered grass-roots ownership of civic challenges and helped shift populist thinking away from “‘what are they pushing down our throats,’” Blanchard noted, to ’what are we going to do in our community.’
But the glory years ended in dramatic fashion.
Blanchard’s phased retirement roughly coincided with the national economic collapse that began in 2008. He retired as CEO in 2005 but remained a member of the bank’s board until last year. Richard Anthony succeeded Blanchard as CEO and witnessed some of the bank’s bleakest quarters.
The bank lost $1.6 billion in 2009 alone, an unprecedented, jaw-dropping figure for Columbus, Georgia. The causes were not simple but boiled down to over-exposure in real estate and, more broadly, the near-collapse of the nation’s banking economy.
Anthony became seriously ill and was replaced as CEO in 2010 by the current chairman, Kessel Stelling.
“The company was in a crisis,” Stelling said flatly in a recent interview.
By then, lunch-counter chatter around town had taken on a tense tone, with daily wonderings about the very real thought that Synovus might not survive. Talk of love and inverted pyramids had pivoted sharply to hemorrhaging losses and fear of layoffs.
Stelling is no Jimmy Blanchard. He’s widely viewed as less charismatic, less visible and far less engaged in civic and political agendas. Even those inside the bank acknowledge a more inward focus since Blanchard’s retirement.
Stelling does have a seat on the Georgia Board of Regents, which oversees the state’s universities. While a prominent appointment, it’s also a low-key one. With banking roots in Atlanta and Augusta, Stelling is, one observer remarked, “a citizen of a broader community.”
But the leadership shift is a matter of necessity, all agree, and banking acumen is the virtue of the day. Stelling is given the lion’s share of the credit for turning the bank around. Such a key institution in the fabric of Columbus’ history could not be left moribund, and some predict when the full story is written on the 12 troubled quarters, Stelling will be the white knight.
“He’s had to get the ship righted,” Blanchard said. “And he’s done an incredible job.”
Stelling, in turn, says the culture didn’t leave with Blanchard. Rather, it’s the culture that gave the company the energy and emotional fortitude to fight its way back from near-death. “The culture got us through this crisis,” he said.
In January 2011, Stelling went downstairs from his fifth floor office overlooking the Chattahoochee River to announce that the company was eliminating an unprecedented 850 positions, after eliminating 300 jobs in the previous quarter. That was 18 percent of the company’s entire workforce. The first question reporters asked was whether the announcement effectively torpedoed the culture of the heart.
No, he insisted. “The culture never means not doing the tough stuff.” The culture demanded that people be treated fairly and with compassion, but at the same time to be transparent about the bank’s battle for survival and that sharp cost cuts were what it was going to take.
The bank is now returning both to profitability and emotional health. Stelling noted that repaying $968 million in federal bailout funds, plus reporting profitable quarters, has boosted the company’s reputation and team member morale. Getting the bank out of the ditch has proven the team can win, and at its core, the culture, as is banking, is all about relationships.
Since the rise of mega-banks, there are clearly two strata of financial institutions, says Tim Crimmins, who directs Georgia State University’s Center for Neighborhood and Metropolitan Studies. “Now with Bank of America and other large national banks, those local operations have become more like franchises,” he said. The evolution in banking regulations during Blanchard’s time allowed CB&T to grow, but it ultimately made it possible for larger banks to become country-wide financial behemoths, taking leadership farther and farther from local Rotary Club lunches and those decision-driving phone calls to mayors’ offices.
Where local ownership can be maintained, the sense of engagement in individual communities remains stronger, Crimmins said. The value of local ownership that fosters civic engagement is nothing to be dismissed as passé or unimportant.
For now, though, the focus is more on ensuring stability than on driving civic change. Stelling says Synovus remains in a banking “sweet spot,” small enough to be a hometown bank and large enough to have the resources needed to help grow communities. That’s always been Synovus’ mission and that hasn’t changed. Branch banking will continue to evolve as people frequent branches less for routine transactions, “but at the end of the day, the small business person wants to know a banker,” he said.
A century and a quarter from now, Stelling and both Blanchards predicted, people in the Southeast will still talk about the bank with a culture of the heart, a bank with a philosophy based on people and relationships among customers and team members.
“We’ve had 12 to 14 quarters of really bad news, but we’ve got 500 quarters of history in this company,” Billy Blanchard said. “We cannot let this company be defined by the last 12 quarters. This has made us stronger.”
And saluting the mill worker forever known only as the woman with the dress, Kessel Stelling has bought a condo at the Eagle & Phenix.
Jim Lynn is an independent journalist and former Knight-Ridder reporter and editor. You can reach him at Lynn36867@aol.com Virginia Causey, retired Columbus State University history professor, provided research assistance for this story.