Greek Bank Transformation Case Study

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Founded over 100 years ago, the bank has over 370 branches located in central, western and south of Europe (Vakola et al 263). The bank has offered employment to over 6,800 people making it a huge enterprise. It provides a variety of services to its customers ranging from retail and corporate banking.

In addition, it offers other activities such as insurance, leasing, asset management, factories and many other miscellaneous services. The bank operates in a competitive and a challenging environment; thus, the need to adopt changes is paramount.

One major challenge that the bank is facing is competition from many banks that have merged and other public banks that have been privatized making them more competitive in customer services deliverance.

Despite its good name in terms of competence, the bank is facing inefficiencies in its entire operation. The bank is suffering from lack of adequate customer focus, bureaucracy and resistance to change. In response to these inadequacies, the bank has launched a restructuring program which is aimed at improving its entire operation (Vakola et al 264).

Pegasus, the name given to the restructuring program, is an innovative program whose objective is to meet the needs of the customers while at the same time meeting the employee’s expectations. Improved operations, better human resource system, service orientation and, a new corporate identity are some of the tools that the bank uses to achieve its goal.

According to Torrington (202), though difficult, it is important for all businesses to break their cultures if their performances do not meet the needs of the most important person in business; the customer. This bank has realized that; the reason why it decided to reconstruct the customer services management so as to improve its productivity and efficiency.

The restructuring of the program started with redefining the human resource management system (Vakola et al 267). This entails that individual employee focus facilitation was a key concept. To enhance that, the behavior of the employees, their knowledge and skills coupled with effective communication were analyzed.

Similarly, employees’ involvement plays a significant role in reengineering of programs accordingly. Following an in depth analysis of the situation, the bank representatives thoroughly reviewed the situation and came up with a conclusion based on some strategic principles.

The first principle was based on job descriptions and adoption of current practices so as to guarantee competence and survival of the program. Secondly, the framework contained a set of competency areas which allowed rapid adaptation of the model.

The third principle emphasized that every position in all the branches, depending on required competencies, would develop their profile of competency.

Each competency is required to indicate a detailed job related characteristics that are specific to that position. Finally, individual implementation of an individual profile based on job competency, behavioral and functional characteristics was considered.

All these principles led to a competency framework with three distinct processes paramount in identification of the competences. These competencies are based on; banking core capabilities, the banks competitive strategy and, the banking industry trends.

According to Kotter (196), banking core capabilities is a comprehensive analysis that is used to differentiate between the best banks and low performing ones. The bank used a team composed of experts to identify individual job related competencies.

In the banking industry trends, the relevant research papers, annual reports, and, industry reports were reviewed to identify current and expected future trends in the banking sector both at local and international levels. On the other hand, in order to understand the bank’s own strategy, an in depth analysis was done.

The analysis involved extensive interviewing of the high rank employees in the bank including the CEO, the president, the vice presidents, the directors and, the top managers (Vakola, et al p.270). After the generation of these competencies, they grouped them into:

  • Competencies that are generated from the core competencies within the leading banks
  • Competencies generated from the current and the trends in the sector of banking
  • Groups’ creation of competencies from synthetic list

These competencies were further explained in the following areas: interpersonal excellence, project operation management, business decision making, sales management and, people management. After elaboration of the competence model, a research was done to validate from job holders.

This was done through interviewing 60 employees who represented various branches (Vakola et al 272). A functional competency is based on development of good public relations, banks responsibility in promotion of local market and, proper communication channel.

On the other hand, behavioral is based on creating a climate of trust, coping with unexpected situations and, conflict resolution. The model was later introduced and communicated to all the branches of the bank accordingly. This bank has realized that; the reason why it decided to reconstruct the customer services management so as to improve its productivity and efficiency.

Various areas of focus were used to implement and support change effectively. As Todd (210) points out, communication is one of the most effective ways to enhance successful implementation of change. In the bank case, the central human resource system had a great responsibility in communicating the strategic changes as well as their implications in operation.

The process was equally facilitated through workshops where the employees were made aware of the changes. This was done with a purpose of making the employees understand how to reach the set goals of the structured program.

Another major tool that was used to enhance change was the improved feedback from the bank’s branches to the headquarters (Vakola et al 272). Several assessment centers were run so as to prepare the employees for their new duties implemented in the program.

This was important as the senior management was able to note the inherent gaps in competences that could hinder the program. Through trainings, the obstacles that hinder the whole transformation process were solved.

The success of any business transformation is seen depending on how new behaviors are incorporated into daily routines (Todd 89). To ensure the new behavior and practices are incorporated in work places, assessment and trainings where necessary are implemented. Similarly, employee participation and involvement in the program serves to enhance a successful program.

Limitations

Although the program was successful, there were quite a number of limitations that the whole program faced. There was a great challenge in measuring some of the key performance results. Despite the inception of the project interviews and observations done, there was delay in the release of outcomes.

Similarly, employees’ involvement in the program was limited thereby making change a tedious and slow exercise as many people were not aware of what was expected. Inadequate trainings equally affect the quality of the expected program. Employees need to be thoroughly trained or else there would be a delay in performance of the whole program.

Recommendations

Employees are very important in every business set up; therefore, they should be actively involved in the whole program from inception to its completion. Employee involvement prepares the employees on what to expect and how to adapt to the changes.

In addition, trainings should be held from the first time when the changes are implemented. This means that no one should be left behind in the transformation process. Equally, employees’ active participation motivates them as they feel important and recognized by their employers.

Institutionalization of new technologies and modern innovations can also help greatly in measuring the performance of the employees. Since the changes are implemented to increase the performance of the employees, a technology to measure the performance plays a great role to determine the success of the program.

Conclusion

Despite the need for transformation required by many firms including banks that wish to improve their services and brands, the major challenge they face is reluctance to undertake change. The bank is no exemption. All the strategies that it used to enhance the transformation program are ideal for the good of its operations.

In the recent times, competition is increasing and the companies that do not want to adopt changes are left behind. Innovations keep the enterprises moving as they help in attaining a competitive advantage.

The transformation of the bank has increased its performance which helps greatly in maintenance of customers as well as winning new ones (Kotter 77). This applies to all other enterprises which are reluctant to adopt changes.

Works Cited

Kotter, John. Leading Change. New York: Boston, Harvard Business School Press, 1996. Print.

Todd, Klein. Built for Change: Essential Traits of Transformative Companies. Santa Barbara, Calif: Praeger, 2010. Print.

Torrington, Derek, Hall, Laura and Taylor, sStephen. Human Resource Management. London: Prentice Hall, 2002. Print.

Vakola, Maria, Eric, Soderquist, Gregory, Prastacos. “Competency management in support of organizational change.” International Journal of Manpower 28.3 (2007): 260 – 275

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