Business — Banking — Management — Marketing & Sales

Facing reactions of the social system and facilitating social changes

Category: Bank Management

To successfully achieve a change, one still has to take into consideration social factors.

For instance, a model of learning usually goes through three steps:

— assimilation, e.g. integration of new knowledge,

— accommodation, e.g. modification of behaviour,

— equilibration, i. e. balancing aspiration between maintaining and changing.

Thus, one should take into account at least two kinds of factors:

First of all, the relationships of the different concerned parties with the expected change. That is to must understand the favourable and unfavourable aspects of the existing institutional and social system.

Then, one will have to find the accurate actions to deal with the unavoidable (individual and group) resistances to change.

Analysis of the social system.

The probability of the success in changing depends on the degree of divergence of interests between the concerned parties, the power (force) relationship between them.

An analysis of the dynamic structure of the existing social system has thus to be established:

— Who are the « actors »?

— What do they want?

— What are their respective powers?

— How is the work organized in the considered institution and what are the relationships between its members?

— What strategies have been chosen by the leaders?

— What are the H.R.M. practices in use?

— What does the culture interiorised by the staff make them choose and refuse?

— How far should the existing system be considered as having rigid characteristics?  Etc.

Somehow, a culture supportive of change should be fostered, heroes of change identified, and a clear vision enunciated, a careful listening to the reactions has to be maintained, a set of required behaviours has to be developed and intensive communication has to be fostered in order to preserve cohesiveness.

For instance, let us describe the most frequent positions of the three most important « actors » that we found in the C.I.S. banks (local bank’s managers, westerners, and local bank’s staff) have then to be taken into consideration.

The local bank’s managers:

Commitment, involvement and support of the banks top management is fundamental for the achievement of the required changes: « if top management do not change, the banking system will not change ». Some people told us that « top management is the biggest problem in terms of change ». Thus, all interventions should be made conditional on top management support.

But, previously, the top management has to be trained to assume efficiently all its functions (« only one fourth of them have the conceptual skills needed »), despite the fact that top management tends usually to be very busy.

Some specialists consider that the professionalism of senior management can be improved only by more exposure to Western thinking, that is spending time in Western banks. Thus, important people should be sent abroad. In fact, to date, the concentration has been on taking top management people to Western countries to see banks there. The results were not always very positive. It is why we suggest that it would be useful to encourage more meetings (even between local top management and their counterparts in Eastern European countries (such as Poland, Hungary, etc.) that have had a similar recent history) and more working together on common (or shared) transverse projects.

This means offering them conferences and courses dealing with all the possible weaknesses of their management (see table, here after) and, usually, mainly with:

— understanding macroeconomic changes, anticipating the results of economic policies, elaborating strategic vision and planning, establishing strong cooperative relationships with authorities, developing his own ability to implement plans,

— establishing strong teams, working well with staff (to build trust) and people (Human Resources), developing staff’s motivation (including introducing financial incentives),

— analysing and implementing the useful organisational optimisations,

— managing changes, etc.

Then, the top managers should be convinced that their own involvement is important.

The C.I.S. banks have also become more conscious of the importance of the involvement of their new and middle managers and of the improvement of these managers’ efficiency to achieve their changes (see table, next). This requires developing a systematic approach to bank management, a better understanding by the banks’ managers of their roles and an improvement of their capacities to assume them. Specifically, it seems that they should be trained in:

basic banking skills and qualifications (« training and practical experience in these topics remain a high priority »), concrete marketing bases, planning, internal controls and audit, despite the fact that they are still not perceived by C.I.S.’ bankers as major insufficiencies, even if most banks are looking for M.I.S. systems, organisations optimisation and « projects management methods » and aptitude to learn from mistakes, local staff management: communication skills, good teamwork (« team building is going to become more and more important »), motivation (« management has very little experience of reward relationships »), adaptation of personal leadership style.

For instance, Ebtra’s Management Of Change module named « How to develop managerial skills and best organisation practices » provides concrete answers dealing with such topics as:

— managers’ (technical, economical and social) roles and functions,

— problem-solving, creativity and decision-making processes and methods,

— elements of strategic diagnostic and planning,.. and of risk management,

— tools to find improvements of an existing system, organisation or structure,

— principles of human relations: communication, motivation of staff and leadership,

— approaches to set the staff’s objectives, to follow-up the results and to conduct performance appraisals and to contribute to Human Resource management (training of the members of the team).

Further management trainings can be developed to deal, for instance, with task distribution, delegation, team building, conflict handling, coping with stress or reporting systems.

The westerners

Specific difficulties may arise considering the relationship between the C.I.S. bankers and the western consultants. We have already mentioned most of them. However, in technical assistance, partnership and integrated cooperation between western and local experts is an important factor. Building-up trust is thus crucial. It should be a priority in the preparatory phases of the project and recommended attitudes in the interpersonal relationships should be taught to western consultants.

The local bank’s staff

Their attitudes and the way they are managed (H.R.M. policies and practices) also have to be taken into consideration. For instance, it may be useful to manage so that salaries are performance related.

To achieve this change of attitudes in the C.I.S. banks’ management and staff, training in psychology, motivation and human relations is becoming necessary.

To successfully achieve the required changes, the C.I.S. banks should also increase and adapt the knowledge’s and skills of their staff. Their need for training covers:

— professional technical knowledge’s, banking norms, legal aspects and regulations, etc.

— all the basic aspects of modern technology (P.C.’s,),

— ability to work with colleagues and customers and also foreign languages,

— discipline, accuracy and self-control (high quality execution of tasks) and sense of responsibility,

— self-improvement (desire to develop one’s professional qualifications),.

Nevertheless, it should be mentioned that the right level of transfer must include the practical use of what is learnt: sometimes local staff has the right theoretical knowledge, but when it comes to applying it, does not know how, what forms should be filled in, etc.

But, first of all, the C.I.S. banks’ staff has to be willing to change and, thus, aware of the necessity of changing.

Some specialists consider that to encourage employees to use their initiative, the best approach might be to have specialists from Western banks (or from Eastern European banks which have had similar experiences) spend time in local banks.

The needs for management improvement in c.i.s. banks

Management training in the eastern states should primarly cover such topics as.

Knowing one’s (potential) clients: up-dating a network of relationships, identifying and understanding their needs, their expectations, and their requirements, conducting a market study: sampling, analyzing and interpreting data, etc.

Defining the vocation of the considered entity. Elaborating a diagnosis (prognosis) of its possibilities:

— the opportunities and threats offered by its environment —> challenges,

— its past performances,

— its inner strengths and weaknesses —> distinctive features

And designing the main orientations of its strategy and establishing its business plan:

— Choosing one’s wanted clients.

— Offering the right products, tailored to reach customers’ needs.

— Calculation of the right prices.

Setting-up medium range objectives and action plans, and choosing an accurate implementation process.

Marketing the offer: highlighting current advantages, selling, and negotiating optimum conditions. Organizing products delivery and customer follow-up.

Organising the work, identifying the tasks, defining and describing the duties, and the limits of delegation. Setting up complementary teams for various projects. Etc.

Controlling the manpower (gaps between the jobs requirements and the employee’s abilities and competences) and hiring adequate staff (considering their skills and motivations), and organizing the reception of the new staff.

Establishing efficient administrative procedures and circuits, and coordination means or tools between the different units (departments, branches, etc.).

Putting a team together and managing it: the styles to adopt within the hierarchical relationships with the personnel, etc.

Defining the objectives devoted to the team and to individuals.

Planning the vacations (holidays).

Managing a budget: forecasts, financial control (incomes (fees and charges), wages, facilities (buildings and equipments) and research and advertising and communication, etc.).

Controlling the time tables, and optimising the productivity and overall efficiency.

Personal achievement follow-up (monthly report) and performance appraisal interviews.

Carrying out negotiations on the remuneration and salaries progressions.

Constructing training programmes to improve individual performance and organizing internal on-the-job-training, and dealing with cross cultural gaps.

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