Business — Banking — Management — Marketing & Sales

Delegation of Objectives and Responsibilities



Category: Strategy Implementation

Need of a clear definition of priorities and timing

As already mentioned, an effective delegation by the head-office to the profit centres is a crucial condition of success. In order to send clear messages, priorities have to be precisely defined, with timing for each of them.

Identification of key tasks

Each strategy requires, to be implemented, a certain number of key tasks, for instance:

Information for the network, coming from the head-office, about the new strategy, the products concerned by it, their prices, the related organisation

Delegation of a set of objectives and authorisations

Production of a marketing document for the customers

Production of documents to be filled in by the branches when they sell the new product

Adaptation of the computer systems (or new developments), in order to allow the branches to input the activity related to a new product (volume and price, by client)

Adaptation of the accounts

A comprehensive identification of all the tasks related to a project is crucial to avoid problems that could go against the desired targets. For instance, if the systems can not deal with a new product, the branches could be in trouble when they want to process it and the clients could be unhappy with the information they receive from the bank. It could undermine the strategy and even damage the image of the bank.

Allocation of responsibilities

For each of these key tasks, a department or a service (marketing, systems, and accounts) has to be clearly in charge, with a deadline. The co-ordination of the whole work to be done is essential, and it is usually more efficient to have a person dedicated to the project. This project manager could work in the commercial department of the bank.

Specific case of a matrix organisation

It is more and more common for the banks to be organised under a matrix structure. It means that a global commercial department is in charge of the branches, with sometimes several regional offices to assist it, with product line managers being in the same time responsible of the development of specific activities. Therefore, a branch manager has two lines of reporting: his (her) regional office and the commercial department, as well as the head office’s product line manager. The revenue of the branch is made of the sum of all the revenue by product. Normally, if the analytical tools are correctly designed, there should be no discrepancies between the total announced by all the branches and the total produced by all the product lines (assuming that the whole activity of the bank is split in product lines).

Matrix organisations are useful because they allow having on one side very specialised and professional people, knowing very well a product, its market and characteristics, and, on the other side, salespeople of the branches totally dedicated to offer their clients what the product lines produce. The trouble is when the split of responsibilities between the two areas of the bank is not clear enough, with potential conflicts of interest. The monitoring of an efficient matrix organisation requires defining the rules of the game, the various responsibilities, and the criteria to judge and compensate the people working in the different areas (product lines and branches).

Incentives and rewards

It is usual, in the banking area, to pay the staff, mainly the salespeople, not only with a fixed salary, but also with variable compensation. To help in the process of reaching a specific target, the incentive schemes have to be adequately designed. If a product, judged as a key element of the strategy, generate less commissions for the salespeople than another product, less strategic or less profitable, the risk for the bank is to go against its own objectives.


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