Taking strategy out of the boardroom: the GCB Berlin cases
- This case is available at ECCH. For the (A) case: reference 811-049-1. For the (B) case: reference 811-050-1. For the (C) case: reference 811-051-1.
- The (A) case, 'Bringing German Cooperative Bank Berlin back on track: Can a rural bank thrive in the city?,'sets the scene and describes the challenges Arthur Berthold faced when he entered as a newly appointed director. The (A) case provides more information on the personal background of Arthur Berthold, and on his track record with previous employers. Furthermore, the case describes German Cooperative Bank (GCB) Berlin, a subsidiary of the German Cooperative Banking Group. After working some weeks in this new organization, Arthur detected fundamental financial and cultural problems. He decided to tackle the challenges by launching a Balanced Scorecard project, but was struggling how to do it. Should he opt for a top-down approach, or is a bottom-up approach more appropriate?
- The case, 'German Cooperative Bank Berlin (B): Managing people, customers, and financial results,' describes the start of the change process at GCB Berlin. The (B) case describes how Arthur Berthold transformed GCB Berlin from an undifferentiated and unprofitable bank into a real customer-oriented, profitable financial institution. The top management team launched two strategy maps, one for the Retail Division and one for the Corporate Division. The (B) case describes how the strategy maps were introduced and what were the effects on the management culture and the operations of the organization. The (B) case also describes a change in the sales-and-service culture within the Retail Division through the introduction of the Cohen Brown program.
How to make change happen?
Prof Kurt Verweire warns that balanced scorecards alone are no guarantee of success. “Introducing BSCs in particular, and performance management in general, involves change. Studies indicate that 70% of all change initiatives fail.” The case study of the German Cooperative Bank Berlin illustrates the importance of an enabling organisational context and change management.
Create a burning platform
Make sure people understand the need for change. Create a common sense of urgency. The Cooperative Bank Berlin sparked that sense of urgency by demonstrating that most of its loans were sold at a loss.
Address obvious issuesThere is no easier way to gain commitment than to address issues that will prompt people to say, “That’s what I’ve been saying for years!”
Expect and accept resistance to change
People don’t like change and some need more convincing than others. Different parts of the organisation will adapt to change at a different pace.
Focus on the willingDon’t waste time trying to convince everyone. Some people will choose to leave or will have to be asked to leave. During the turnaround at the Cooperative Bank Berlin, about one-third of the staff left.
Let results speak for themselves
Work to gain credibility through successful pilot projects. Pick one that will make a difference. A successful turnaround of a department accounting for 60% of sales and one-third of the workforce secured the green light for a company-wide rollout at the Cooperative Bank Berlin.
Balance top-down and bottom-up
To achieve sustainable change, experience has shown that it is best to balance top-down vision and commitment with bottom-up engagement and autonomy.