01 Jun 1998

Long-Term Interest: Bill Crozier, a Banker Pegged to the Customer

by Eileen K. McCluskey


An innovative thinker who created BayBanks, one of the most successful retail banking franchises in the United States, William M. Crozier, Jr. (MBA '63) has a lot to say about the evolution of banking.

As head of BayBanks for 21 years, Bill Crozier forged a loose federation of Massachusetts banks into a New England institution and one of the leading consumer banks in the nation. Responding to demographic trends and consumer demands in the mid-1970s, Crozier moved quickly to launch a ubiquitous network of automated teller machines well ahead of the bank's competitors. He clinched BayBanks' leadership position in the Northeast through the strategic use of new technology, marketing savvy, and a management style that encouraged staff to invest themselves in their work.

In 1996, BayBanks merged with Bank of Boston to form BankBoston. As with his earlier business moves, Crozier approached the union of the two banks with an eye to the horizon. "Some years ago, BayBanks might have been seen as big enough to represent the northeastern United States adequately," Crozier explains. "But then so many large mergers started coming along that it seemed to me we were too small to be considered a serious player. The merger with Bank of Boston got us up to a required level of significance on the nationwide landscape."

Now the rules of the game may have changed again. Commenting on the recent proposed megamerger between Citicorp and Travelers Insurance, Crozier, who became chairman emeritus of BankBoston in January, is impressed not only by the size of the deal but perhaps even more by what it represents: the crossing of industry lines. "With this merger, universal banking - long the style of major banks in many other countries - has arrived in the United States," he says. "In blurring the boundaries in financial services, the two giants have challenged more conventional banking mergers in which organizations merely seek to grow larger while remaining banking concerns."

Crozier also sees the current merger trend as beginning to divide the industry into new segments. "One fault line is between companies that serve traditional banking needs and those catering to clients with more complicated financial lives. A crucial delineation," he says, "may be between those for whom federal deposit insurance is important - that is, those who need to know that their funds are guaranteed up to $100,000 - and those who don't. Some firms," he predicts, "may even stop offering federal deposit insurance altogether, thereby lifting from their backs the enormous regulatory burdens that come with that insurance plan."

With all the changes going on in his industry, Crozier voices some concern about how the current business scene is heavily skewed toward the shareholder. "Certainly the shareholder is important," he notes. "However, the shareholder role has gotten out of balance with the other important players - customers and staff."

In particular, Crozier thinks that the erosion of employee job security may hurt some services businesses. "It seems to me that job security is a major element in employee productivity," he comments. "If staff members spend a lot of time worrying whether their jobs will be there tomorrow, productivity - and quality - will suffer."

Interests such as these have spurred Crozier's involvement with the Harvard Divinity School's Center for the Study of Values in Public Life. "The Center is a good forum for executives to share what's on their minds as they make decisions," Crozier explains. "More and more executives seem moved to describe the things that are important to them over and above the bottom line."

As he moves into this new phase of his own life, what advice would Crozier offer to younger executives? "Don't be afraid of giving up ground in the short term for long-term results," he counsels. "Create your career carefully. Every step counts."


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