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The objective of the research being to achieve market leadership status, the bank should concentrate on focusing on this critical success factor and align its resources on achieving same.
This chapter will focus how the bank should do so in the short, medium and long term. The recommendations given will need to be approved before implementation by the management, taking into account costs, acceptance of change etc.
Due to the subject matter being sensitive in nature, the answers to questions may not be 100% accurate and therefore have a bearing on the data and analysis of results. This has been taken into account in making suitable recommendations.
Conclusions and Recommendations
Flowing from the literature review (Chapter 2) and analysis (Chapter 4), the following conclusions and recommendations are made.
In today's dynamic world we need effective leaders to challenge the status quo, to create and run towards the achievement of that vision.
Leadership should be developed to incorporate the following elements (business dictionary.com 2.2 above):
Establishing a vision
Communicating that vision
Providing resources to achieve it
Coordinating and balancing conflicting interests
Building on the above and Bolman and Deal (1991) theory, the most important influence on the leadership would be to have a vision. A Visionary leader is the answer to this situation, who will act as an inspirer, visionary and a prophet by envisioning the future. At the same time, it is important for the others in the organization to catch that steam and run with the leader. This can be done by the leadership style exhibited. The most suited style would be the transformational leadership style: Bass (this could be seen as an extension of Level 5 leadership: Good to great: Jim Collins) where the leader leads from front depicting a role model for others to follow. However, given the culture as discussed earlier, this style should be encouraged over the long term goals of the organization. Until then, the modified autocratic leadership should be used with a transition to the transformational leadership. Since it is the intention of the bank to become the market leader, this type of leadership is advocated and should be instilled by coaching and role modeling by its selected leadership.
The structural framework type of leader should be developed at the next level of leadership who will focus on the strategies, environment and implementation, based on this vision. While a servant style of leadership would be more suitable, the operative leaders or supervisors entrusted with the execution should be encouraged to use transactional leadership and they also to transit to transformational over the long term, to lead the SBU to perform at optimum level, whilst appreciating the fact that presently people have to be directed and told what needs to be done in the Sri Lankan culture.
The total organization should focus its energies on becoming the market leader and break down the departmental barriers to achieve this. CEO together with HR and Training departments should be required to co-ordinate with the change agent (consultant) to achieve this.
Setting an example should be the motive of the top leadership: "Tell me and I'll forget; show me and I may remember; involve me and I'll understand" Chinese proverb). Leader to adopt the "walk the talk" approach encouraging trust and transparency.
The management should immediately conduct a skills audit and prepare a succession planning programme to identify, select and train the required personnel to take up leadership positions as and when retirements occur and to fill in other vacancies. This should be overlooked by the CEO and assigned to the HR and training departments as an ongoing HR process.
The bank should identify people with the type of leadership it wishes to pass down to others and use such people with the necessary training as role models.
By changing the leadership culture the bank will be able to reverse the adverse sentiments expressed by the employees, in the medium to long term.
The bank should change its recruitment processes forthwith to identify the right talent by adopting other forms of testing as discussed and its promotion policy from seniority to performance based.
Next would be to provide systematic and structured training using these role models, case studies, simulation and education to groom the leadership of branches who are the income generating SBU's of the bank. This should be done on a regional basis, based on the geographical location of the branch in order to minimize cost and other infrastructure difficulties. Draft proposal given below.
Managers, Asst Managers (40 Nos)
CEO, Head of Training, Head of HR, Head of Marketing and Resource Personnel
1 day x 12 ms
Increase in target achievement
Increase in motivation (less turnover, more productivity)
Transfer of skills to branch staff
Increase of knowledge of staff
KPIs and Variance analysis
Turnover index to decrease, lesser absenteeism etc
Customer surveys, CPD exams
Mystery Shopper concept to identify the change in staff through outside person
The training should be repeated at a two month frequency over the second year and on a quarterly frequency in the third. A review, thereafter, would determine the frequency for the subsequent years. The impact of the training should be measured against the KPIs and any amendments deemed necessary done to the content of the training. Introduce CPD as part of KPIs.
R & D
The bank should immediately set up an R & D department to conduct surveys and obtain feedback from customers and also to be aware of what competitors are doing. This will help the bank innovate new products for its customers, catering to their needs rather than the bank coming out with products and selling it the customers (Customer engagement). Identify suitable personnel from within or recruit from outside.
Proactive management practices should be taught and practiced rather than the bank reacting to competitor moves in the market. The bank should lead and dictate the direction of the market if it intends to be the market leader. The R & D department should be set up and entrusted with this.
The R & D Department should come under the head of marketing Division who reports to the CEO.
The upper level management should, immediately, break down barriers of communication and accessibility by encouraging openness. They should also visit branches to show their concern and availability to them.
Also valuable and important information should be shared so that they are not in the dark about what is happening.
Routine, repetitive tasks and non-core competencies should be outsourced in order to achieve economies of scale and use the talent for other creative purposes. Example, Banking Assistants performing data entry roles could be outsourced at a much lesser pay and use them as marketing executives to develop business of the bank or as staff for new branches. Also ancillary services such as call centre, document scanning for retention, dispatch of bank statements, building maintenance, cash sorting and transportation including ATM loading, recoveries etc to be outsourced minimizing the risk, and freeing staff for other useful value adding purposes.
A flatter organization structure to facilitate faster approvals and efficiency is also advocated to be done over the next 12-18 months.
An operational and customer focus team should be appointed immediately to identify the short comings in the system and processes practiced by the bank and make recommendations within the next 3-6 months. Arising from these findings, new guidelines and instructions should be issued forthwith.
Change of culture
A change to a culture cannot be done overnight. This would require long term goals with strong leadership. With the development of leadership as above, a change in culture over medium to long term is advocated which can be achieved, by adopting the following behavioural changes.
The leader needs to create a "great place to work" concept within the organization to bring out the best in employees in their morale, motivation and productivity leading to increased profitability.
By creating a learning culture and open communication, where decision making is done openly, a climate of trust can be created leaving little room for "grapevine" to thrive.
A culture which encourages openness, discussion of issues, problems, mistakes made by them should be created in order to identify and deal with such issues rather than it been hidden inside the minds of the employees for fear of rejection, ridicule, loss of promotions etc. As an initiative to overcome fear, the management should be encouraged to first begin such discussion which shows their issues, problems and mistakes made. Employees who offer viable solutions to problems should be rewarded to recognize and encourage same.
Build a culture which makes others feel important with the removal of self centeredness. This will also promote team spirit and team building, promote enthusiasm and motivate employees. Apply the golden rule to appreciate publicly and reprimand privately.
The bank should involve employees in decision making processes. This could be done in objective settings, learning about the inefficiencies in the work process to eliminate non value additions and bottle necks since they have first-hand experience in it. It will also help in getting them to catch the vision of the leader to achieve the targets and goals of the SBU.
Motivation levels could be kept high by introducing performance bonuses as a monetary measure where when the targets achieved by the SBU's will see them receiving a bonus. Similarly, non monetary incentives (Refer 2.6) and. such as being eligible for selection as a role model for others etc would also appeal to those not seeking monetary rewards. This will also appeal to the 72% employees who are below the age group of 40 where this will have a greater appeal and impact.
This will definitely enhance the motivation, team building and team spirit as well as the performance of the units as they know that they are being monitored and rewarded for achievement rather than just on seniority and individual capabilities. This will definitely motivate even the new comers (Refer 4.1 Analysis of service - 32% with less than 5 years service) to the bank since they know that seniority is not the criteria for succession.
The bank should use the SWOT and BCG matrix to identify the strategies it needs to adopt in order to stay ahead of competition. This should be undertaken by the R & D on a monthly basis in order to identify the competitor movements and come up with competitive strategies (Porter).
The Bank should undertake aggressive marketing campaigns immediately to leverage on its strengths (SWOT) which should be highlighted to create a positive image in the minds of the consumer to rebuild the "best bank" or "number one" bank of the country.
Encourage a performance based culture where "what gets measured gets done" and "what gets done gets rewarded" will be seen in order to avoid subjectivity and ensure well managed customer centres, increased profitability, effective systems and procedures, increased efficiency and ultimately achieving market leader status (Refer 2.3). This will also have a positive impact on employee turnover. This will also be in line with the "team leader" approach of Blake and Mouton.
It can be rightly concluded that with effective leadership at the helm of the organization with the right tools and techniques, success of the organization can be achieved through a change of leadership culture. Therefore, leadership is the vital element to bring about a change of direction and to achieve market leadership status through improved, superior performance by using people to achieve business goals fulfilling the objectives of this research.