A wise man adapts himself to circumstances, as water shapes itself to the vessel that contains it. –Chinese Proverb
Hello Readers, it is I again, knocking on your door. Can I come in? Yes? No? Well, whatever situation you are in, I have announced myself and stepped into your mind, this Monday morning to remind you of some of the bitter truths in risk management. I just share my opinions on the state of affairs in financial institutions, as I see them, whilst baring my heart and soul out to young professionals not to repeat some of the past mistakes we made as we climbed up the ladder in our banking career. So long as risk is an everyday part of life, my pen shall continue to write about it.
Today I want to veer into another interesting arena – organizational Change! Since organizational change is very rampant in the financial services, it has a bearing on how people are treated as well as how they respond to the effect of these changes. In some cases, people perceive the change as a blessing and welcome it with open arms, while others see it as a curse and fight tooth and nail to resist it. One known fact that we sometimes refuse to acknowledge is that change is the most permanent feature in the life of any system, whether the human being, institution, society or for that matter any modern organization. What a paradox! Apart from a few persons living in some remote parts of the world, every part of the world now remains a global village and unless we are living on an island that has not yet been “visited” by other persons, change is always lurking around the corner.
What is Organizational Change?
There are several definitions of organizational change. According to the Cambridge Business English Dictionary, it is a situation in which a large company or organization changes its working methods or aims, for example in order to develop and deal with new situations or markets: Sometimes deep organizational change is necessary in order to maintain a competitive process.
Similarly, organizational change is both the process in which an organization changes its structure, strategies, operational methods, technologies, or organizational culture to affect change within the organization and the effects of these changes on the organization. Organizational change can be continuous or occur for distinct periods of time. When an organization fails to change, the cost of failure may mean its survival.
The Dynamism of Banking
Banking is one of the most dynamic professions in the world. No economy can survive without financial intermediation. Although bankers are perceived to be conservative in their outlook, the truth is that without adapting to the changes in the economic, social, legal, political, and all other environmental factors, banks can go extinct.
The Changes in the Ghanaian banking scene evidence how far banks have come. Some thirty years ago, there were several types of banks in the country. These were made up of Commercial banks, Investment and Merchant banks, Development Banks (mostly state owned) as well as Community and Rural banks. All these come under the umbrella of supervision of the Bank of Ghana, known as the Central bank.
In the past it used to be very frustrating transacting business in Ghanaian banks particularly if one was not privileged to be a member of one of the few elite banks operating in the country. It was a common thing to see very long and winding queues extending several meters outside the banking halls. In Ghana as in most parts of Africa, public sector workers receive their pay usually at the end of the month. And with their low bank charges and also been state owned, these local banks were usually very crowded at the end of every month.
The New Order
The Ghanaian banking sector is now very vibrant and modern. The beginning of the twenty first century saw the breaking down of barriers in banking. The approval of the universal banking concept by Bank of Ghana witnessed all banks moving from their specialist position and acquiring the universal banking licence. Now you can conduct any transaction in one bank, right from “susu” transactions, to investment transactions.
Banks now employ cutting edge technologies to roll out their products to their customers. Banking halls are housed in ultra-modern buildings, staffed with well- trained smart looking ladies and gentlemen. Ghanaians living in the big commercial towns are now spoilt for choice. After the banking crises and the collapse of several local banks and microfinance companies, twenty-three universal banks are chasing about 10 per cent of the bankable segment of the population. Nigerian banks are well represented in the new banking sector in Ghana. Nigeria has one of the largest banking sectors in Africa. And the sector is one of the most competitive among emerging market countries and it known for its innovation and resilience. Flotation of shares of banks on the Ghana Stock Exchange has also changed the organizational structure of such banks.
Some Mergers and Acquisitions
I am sure older folks will remember the acquisition of National Savings and Credit Bank (NSCB) by Social Security Bank (SSB). More recently, we have witnessed the acquisition of The Trust Bank (TTB) by Ecobank, Standard Trust Bank by United Bank of Africa (UBA), Amalgamated Bank (AMAL) by Bank of Africa (BAF), Intercontinental Bank by (Access Bank), and UT Financial Services and Metropolitan and Allied Bank (MAB) which later became UT Bank and now under GCB.
The Proliferation of Microfinance Companies
The microfinance companies have also caused a revolution or may I call it, an excitement in financial intermediation a decade or more ago. For several years, they sprung up in every major street in the country and have really caused an upset to the universal banks. The negative perceptions associated with some of them is now a big issue to the regulator, Bank of Ghana. Since 2018, over 300 were closed as the recalcitrant ones were “whipped” into submission by Bank of Ghana to “walk in their lane”. Are they really walking in their lane? See how some rural banks are opening branches in the nearby towns. Sometimes I do not blame them. If their territories are no more profitable, they are tempted to veer off their lane to make profit elsewhere in the urban areas.
The People Factor
As these hustles go on, financial institutions are undergoing massive restructuring, rightsizing, and what have you. Structures, policies and procedures are changing drastically. Old staff are being laid off, new staff are being recruited to blend with existing staff. Now after all this jigsaw puzzle has been put into place, what happens to the people?
How easily do people change their mindsets and attitudes within this new order that I have enumerated above? Since the most prized asset in any institution is the people, if the puzzle is not solved with the human touch, here are some of the negative consequences of the teething process:
- Unknowledgeable staff
- Rift between the “old and new staff”
- Lack of Unity and Trust
- PHD…..Pull Him Down Syndrome
- Bad Customer Service
- Dissatisfied Customers
- Loss of business
Some global banks across the world have been known to have invested billions of dollars in acquisitions, restructuring and organizational change, which rather turned the scales and caused losses and reputational damage. The underlying cause was the People Factor.
Although I am a firm believer in change, I am a bit hesitant to say this, but I do not believe in a system that claims to have a supposed magic wand that can do the trick, but rather, a change that listens, putting perceptions aside and working to create teams that believe in the change. In short, organizational change is a blessing but sometimes the process is effected with a whip, making the beneficiaries think it is a curse!
I will pause here and hope to see you again next week as I ponder over some practical issues, observations and lessons learnt in my banking career. I will share some tit-bits of the “old and new staff syndrome”, the “pull him down syndrome”, young and old, management vrs staff as well as all the exciting, positive and innovative stuff. Perhaps some of the examples may give you food for thought. I will end here with Bill Clinton’s words….”The price of doing the same old thing is far higher than the price of change”.
TO BE CONTINUED
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud.
CONTACT
Website www.alkanbiz.com
Email:alberta@alkanbiz.com or [email protected]
