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SUMMARY PERAFACE
/ TRANSFORMATION By Ahmet Hamamcıoğlu/Editor Reconstruction, transformation are They are the most important factors of success. Our planet
now experiencing a swift transformation process. Such a big and swift
transformation that everything is changing day by day such as thoughts, desires,
expectations, works, and life at the end. Competition sets fire to the transformation. Effectiveness
and productivity that the matters strengthen the competition are developing. An e-business revolution is being enjoyed and brings about
transformation of everything. New non-stop services arising from advances in
computer and communication technologies facilitate to make business in Internet,
and offer rich possibilities for e-business and e-trade. E-business and e-trade are being developed swiftly to make
business for consumers and companies as a new way, thanks to rapid adaptation to
the transformation; an environment that has no place restriction; and minimum
operating cost. Just look at the transformation since the beginning of
90’s: A world that has been changing by increasingly focusing onto cultural
activities together with unforeseen economic opportunities and astonished
political developments. However, we may reach to the goals with a power resulting
from knowledge. Information use must be taken into consideration first. We may
catch the useful result if we use right information and then share it properly. Transformation is a process that needs preparation. For
this, we have to benefit from IT and then to raise the productivity.
Globalization, heavy competition, technology, mergers and other arrangements
force the business world to change the way of their work. Everybody who be able
to understand the transformation is going to catch the era, and then jump to
front. Nations that be able to catch the transformation are going to put their
signatures on some new inventions. While the future is being the source of big expectations,
it’s also bearing big anxieties possibly. Globalization, competition, rapid
transformation and the different expectations of customers are put the
institutions into difficult positions, whose they haven’t been able to get the
adaptation to the new conditions. Help sounds that comes from
some sectors are increasing. But there’ll be no any support from the
governments in this new period. Private sector has to make a range of reforms. Companies which will not be able to achieve reducing the
costs while quality is increasing, and also not be able to follow up the rapid
transformation of demands coming from both domestic and foreign markets, may
come face to face with the permanent stagnation. We believe that our business environment will perform the
constitutional transformation and then our global companies going to born from
these changes. Everybody in the country should believe and give support to this
transformation, and give their hearts to it. We want not only political and economical transformations,
but in every area of social life. We expect the government to leave current role of nowadays
and then to do organizational studies. Transformation as a word, that is being used repeatedly
today, has the important meanings in social and economic life. But, do we
understand the content of it, and the reflection to it in the business world?
How much we make an effort to create a new vision for our institution, and for
to be able to reconstructed of it. In our changing world one of the main function of the
managers is to have managing ability of transformation. A good manager has to be a good coordinator. A
STORY / A SECTION Gökhan Üçok and Kâmil Aydın narrate It was the high school days. When I was going home after
school I saw a boy whose name was Kyle, just as he was leaving the class I went
to. As if he was taking all his books to home. I thought myself, why a student
takes his all books to home on Friday? He might be a dull foolish one who
couldn’t find anything to do but deal with books at weekend. However, I had
some plans for the weekend – first a party with the friends and then a
football match to play in the afternoon. I didn’t concern and went on. When I
was walking again I saw a couple of children was going towards him. They jumped
onto him, then he and his books fell down in to the mud. I saw his glasses
flying and falling down far away on the grass. He was looking very sad. Just
that moment I gave my heart to him. I run towards him. He was looking his
glasses and was crying. When I was giving him glasses I said “These boys are
hobos, they should learn the life!” He looked at me and thanked. He was wearing a big smile on his face that was
representing a real sense of gratitude. I helped him to collect his books up
from the ground then asked him where he was living. He said he was near to me. I
asked him then why I hadn’t seen him before. He said he went to a private
school before. We talked all the way. He was a wonderful person. When I
asked him if he wanted to play football on Saturday he said “yes”. I liked
very much him when I recognized him closer. So my friends did. We were very
close friends for four years. At the end of the school days we had to decide for the
further plans. Kyle went on to the university at Georgetown. My school was in
Duke. Even there are kilometers of road between us it was not be a problem for
us to last our friendship. He wanted to be doctor, as for me, I was going to a
football school. He was great when the graduating ceremony time. He was one
of the students who developed a personality of his own. Even he was going out
with girls more than I had! Oh my God! I was jealous of him sometimes. He was
very tense because of speech he had to make. I hit him on his back and said,
“Big man, you’ll do it!” Before his speech he said, “Graduation ceremony is the
time to thank everybody you helped all throughout
that hard years. To your mother, your father, your teachers, your sisters
and brothers, even to your coach…. But to your friends most. Now, I am here to
say that a best present given to me is the friendship. I’ll tell you a story….” As he was telling about the day we met first when I was
looking at him unbelievably. He said he wanted to kill himself! He said how he
collected his stuff from the school not to force his mother to come to school to
collect after his dead. He looked at me and smiled. “Thanks God!” he said,
“I was saved. My friend saved me from the things that I didn’t be able to
tell now.” …………. You should never underestimate your power of behaviors.
You may change one’s life with a little gesture. To better or worst. God created everybody to effect another’s life in a
way. Every new day is an award to us! OVERCOMING THE FEAR
OF SELLING
By Julie Monahan On the surface, it appears that banks are working hard to
transform their branches from transaction sites to revenue-enriching sales
centers. Employees are put through one training program after another. But these
efforts often merely inject a temporary enthusiasm that disappears once the
employees return to the office. Rousing sales slogans start to fade from memory while
entrenched obstacles to selling endure. The hard fact is that most branch staffers don't want to
sell. Some fear alienating customers; others believe selling is dèclassè. A
job at the bank has long held an aura of dignity and stability. Many employees,
especially veterans, believe an emphasis on selling detracts from that image.
And for many, the conflict involves job descriptions – they weren't hired to
sell in the first place and are resentful when requirements change. Training simply marks the beginning of a process that must
also include the proper incentives and commissions, coaching and role–playing,
weekly sales meetings and detailed tracking of performance. And key to the whole
effort is buy–in from the executive suite to the teller platform. But training can't get the job done by itself. All too
often, newly energized branch employees quickly find themselves enmeshed, once
more, in administrative and operational tasks. Building an effective sales
culture requires shifting those duties out of the branch. It also requires
financial incentives that reward the right kinds of behavior. Ideally,
institutions should shift to commission–based compensation. Managers also need to maintain the enthusiasm generated in
the initial training sessions. Experts in the field recommend regular reviews of
employee performance, with frequent coaching on sales management techniques.
Finally, senior managers need to get involved by measuring, evaluating and
supporting ongoing sales activity. None of this is easy to do, and all of it requires
persistent management attention. Changing
Behavior Training is the beginning of this process and, in some
respects the easiest, thanks to a plethora of consultants available to run these
programs. It's not a good idea to provide training only for customer
service representatives. To build an enduring sales culture, it's better to
provide training for branch managers as well, and give them the responsibility
of setting the pace for the staff. "We've found that 80% of what people do
is based on what they see their managers doing," says training consultant
Kevin Higgins, executive vice president of Forum Corp. in Chicago. Sales training, however, doesn't help when life at the
branch is defined by paper shuffling and handling routine customer requests all
day. In any case, operational tasks are no excuse for poor sales
performance, according to sales management consultant Nick Miller. "Even if
90% of employee time is spent on operational tasks in the branch, staff can
still make a sales impact with the remaining 10%," says Miller, president
of Clarity Advantage Corp., Acton, Mass. In Miller's view, managers often set
unrealistic sales goals for branch employees. They would do better by following
a "reasonable and sustained" activity model, he says, which would
drive sales. In addition to sales activity models, banks need to provide
the right financial incentives. This is a complicated topic. Compensation is
perhaps the most accurate measure of a bank's progress in boosting sales culture,
and incentives are a common carrot dangled by many banks to get employees to
sell. But financial incentives don't always work cleanly.
Oftentimes they cast selling as an "extra" responsibility, separate
from the tasks employees were originally hired to do. Commission–based pay provides a clearer signal that the
organization is serious about selling. But shifting salaried employees to the
pressure of commission pay is fraught with difficulty. Some banks fear a
wholesale exodus of employees accustomed to a steady paycheck. Cleveland-based
National City Corp., for example, is inching closer to commission pay after
using incentives for several years. But executive vice president Robert K.
Healey Jr., Ohio branch network executive, admits that full-scale commission-based
pay "will be tough to implement" at his institution. Coaching
Rules Coaching is a simple concept to grasp but actual practice
can go awry, particularly when executives try to manage the exchange too closely.
Berch says coaching works best when employees get a chance to share their
experiences without judgment Well–coached tellers learn to greet customers
with a smile, address them by name, and thank them when the transaction is done
– all the while keeping an eye out for a potential referral. Coble, who conducts frequent surveys of bank sales
practices, recommends that employees be shown how sales can actually help
customers. "If I could do one thing to help client banks move along the
road to a sales culture," he says, "it would be to change the
definition of 'sales' in everybody's mind to 'proactively helping customers
solve problems.' The key word there is 'proactive.' You have to ask questions to
understand where customers are in their decision–making process. Then it's
natural for bank employees to facilitate that process." Management
Accountability The key to the effort is getting managers focused on
measuring and evaluating the ongoing sales programs, which doesn't come easily
to some banking institutions. "I'm always struck by the reluctance of line
sales managers to make clear demands for performance," says Jim Schneider,
president and chief executive officer of Schneider Sales Management, Englewood,
Colo. In a recent report, Schneider attributes this lack of accountability to
banks' fears that they will lose staff by burdening them with aggressive sales
goals. Schneider's client surveys show that 95% of sales managers
responsible for coaching and staff development do not receive feedback on their
own performance. One institution that tries to hold managers accountable is
BB&T Corp., Winston–Salem, N.C. President Kelly King meets with more than
a dozen of his regional presidents every week to review sales activity. Knowing
the boss is watching the numbers makes everyone that much more motivated.
realize that they can't cut much further," Schneider says. "It's time
to get more productivity out of each person that is there." TWILIGHT OF THE
EMPIRE
By Sean Ryan A turning point is looming for the banking industry, and
newly–formed titans likely will be the ones most affected. After nearly a
decade of low inflation and interest rates, robust economic growth and soaring
stock valuations, the good times are likely to top out this year, leaving
institutions with an even tougher revenue growth challenge. But smaller, nimbler competitors are likely to have a
better shot at revenue growth. The reason? Some of them used this recent holiday
from the business cycle to fundamentally change the way they do business. They
are now using data mining techniques to deliver useful customer information to
front-line personnel. Those employees, equipped with proper training and
rational incentives, in turn are able to sell more products and improve
relationships with customers. Viewed from another angle, the robust economy of the last
decade masked the weaknesses of the very largest institutions. These weaknesses will become more evident in an era when
managers must move quickly and nimbly to meet the changing needs of their
customers. Even in the current benign economic environment, mega-banks find it
increasingly difficult to sustain growth rates. Longer-term, the large banks do have some remedies, if only
they have the will to pursue them. Most fundamentally, they must cut through the
hype surrounding information technology and product development and pay
dramatically more attention to human resources management. With 2000 marking the transition into a very different
banking environment from what we saw in the '90s, the successful competitors
will be those that cultivate a motivated and skilled workforce and stay focused
on serving customers. Race
for Size Another factor driving the race for bigness was a growing
emphasis on conglomeration. Managers were eager to develop new business lines,
and they capitalized on weakening regulatory restrictions to buy their way into
a variety of businesses, including brokerage, insurance, mutual funds and
subprime consumer finance. In fact, the industry's top-heaviness could become even
more pronounced in the near term. The recent elimination of Glass-Steagall
restrictions on cross-sector financial mergers, along with the prospective
elimination of pooling–of–interests accounting by yearend, will create a
temporary "window of opportunity" for aggressive acquirers. Insurance
now represents fresh territory for commercial banks, broadening the range of
potential deals. And the regulatory approval of recent big in-market bank
mergers has pushed the antitrust envelope farther than would have seemed
possible only a few years ago. Size does not translate into strategic vindication, however.
One way or another, the coming year is likely to provide further compelling
evidence of the irrelevance of scale to banking success. A mountain of academic research and empirical evidence
illustrates that skill, not scale, determines success in banking. Bureaucratic inertia, particularly, is a direct function of
size, as senior management becomes ever more removed from customers and
frontline employees. In such an environment, even the most promising initiatives
can fizzle. High
Water Mark? This year, in fact, may represent the high water mark for
financial consolidation in this cycle. Once this wave has passed, we can expect
to see some divestitures, possibly followed by a de–conglomeration wave that
may dwarf that of the '80s. Thus the twilight of the age of empire looms near.
Already, the independence of three of the nation's six largest banks – First
Union Corp., Charlotte; Chicago-based Bank One Corp., and New York's J.P. Morgan
& Co. Inc. – looks increasingly tenuous. We also should see the beginning of turnover in the ranks
of top banks. Superior operators who just a few years ago were not even among
the fifty largest banks will displace some of today's leviathans. Front-runners
will include previously obscure names such as BB&T Corp., Winston-Salem,
N.C.; AmSouth Bancorp., Birmingham, Ala.; and Centura Banks Inc., Rocky Mount,
N.C. – companies that have demonstrated the ability to win market share,
rather than a mere compulsion to buy it. The
Human Dimension The real challenge, overlooked by too many managers, has to
do with human resources. It is not enough to give employees advanced tools; they
also must be taught to use them. Then incentive compensation must be revamped in
a way that rewards employees for using the tools effectively on the frontline. The future of banking belongs to those institutions that
can master the human resources issues. However, this category is not likely to
include most of the vertically integrated empire builders, who are subject to
severe diseconomies of scale. Instead, the lead will be taken by a small group
of high-performing banks of varying size who can harness the potential of data
warehouses to cross–sell more effectively, boost customer profitability and
retention, and gain profitable market share. Many of today's giants put the cart before the horse,
pursuing ambitious acquisitions before developing strong sales and service
cultures. Now, precisely because of their massive scale, top banks have much
greater difficulty bringing about cultural shifts, since bureaucratic inertia
tends to increase geometrically with size.
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