Introduction:

The Client:          Leading Cyprus Bank

Description:        Offices in Cyprus, Luxemburg, London, Moscow

Case Location:   Cyprus

Products:            Banking

The Client:

The client is one of the largest financial institutions in Cyprus and a significant EU bank. The Bank offers corporate, investment and retail products and services to clients from around 50 countries.

The bank is a private financial institution. It is headquartered in Limassol, with branches in Luxembourg and representative offices in Moscow and London.

With over 20 years of history and expertise in banking, the bank has earned a reputation as a financially stable and reliable bank. The bank offers a wide range of everyday banking products and services as well as tailored investment solutions and aspires to establish a long-term strategic partnership with its clients.

The Situation:

In 2014 the Client approved the 5-year strategy that is directed at expanding the horizons and driving the business with the key focus to deal with the key issues that represent the weaknesses to be dealt with:

  • Dependence on key large clients (big financial and industrial groups) and, as a result, a need to diversify a range of the clients
  • Dependence on key regions (such as Russia and Cyprus) to get the clients that in the current conditions (Russia) and past experiences (Cyprus) may represent threats to the bank’s stability and, as a result, a need to expand into the clients from other regions (Greece, UK, Europe, etc.)
  • Dependence on attracting clients via introducers and personal networks of the bank’s executives that needs to compliment business development efforts with operational accountabilities
  • Poor maturity of the sales/business development system to ensure consistent work with attracting new clients and retaining existing clients to generate the volume that matches the rates prescribed in the strategy

As a result, the slower than expected pace of the strategy realisation generated the question and enquiry from the bank’s CEO whether he has the right team of the people to deliver the strategy effectively and reduce the above-mentioned dependencies that are considered by CEO as threats to the bank’s long-term stability and viability.

Operational Effectiveness and People:

Operational Effectiveness is the ability to minimise and prevent the risks of losses from failures of IT systems, business processes, external environment and people.

The majority of respondents to a survey at the OpRisk Europe conference in London said people pose the biggest operational risk to their business.

More than 60% of conference attendees voted for people, compared with just 7% who identified external events as their top operational risk.

When it comes down to it, most operational risks are ultimately the result of people failure whether at strategic or operational level.

As a result, People Risk is the potential financial and reputational loss caused by immature decision making (work) of an employee in regard to processes, systems and external events

 

People factors that negatively impact the Operational effectiveness:

  • Fraud
  • Breaches of employment law,
  • Unauthorised activity
  • Loss or lack of key personnel
  • Inadequate training,
  • Inadequate management,
  • Poor decision making, etc

At the end the people failure via poor decision making impacts negatively all other elements of operational effectiveness:

The C3 approach: Criticality. Complexity. Capability

C3™ is a breakthrough approach to assessing, analysing and managing the People Risk as a key component of Operational Risk. It enables H.R., Governance and Business Functions to improve the management of risk and prioritisation of valuable and often scarce internal resource.

The objective of C3 is to minimise the development of people risk in critical roles for the organisation and prevent the negative impact of poor decision making in relation to IT systems, business processes and external environment.

The understanding of the levels of complexity and capability is constructed based on the principles of Stratified Systems Theory and Requisite Organization that differentiates:

  • The complexity of the organisation is ranged between Level 1 and Level 8
  • The complexity of work in the roles of an organisation is ranged between Level 1 and Level 8
  • The capability of the employees to deal with various organisational decisions and work is ranged between Level 1 and Level 8

As a result, key tasks of C3:

  • Identify the critical roles for the organisation and strategy implementation – Criticality
  • Evaluate the complexity of work and decisions in critical roles – Complexity
  • Match the complexity of work with the right level of people capability to ensure effective decision making – Capability

Criticality:

The department accountable for sales and business development with the purpose of expanding the range of the bank’s clients internationally was identified by CEO and Senior Leadership Team as the critical one for delivering the bank’s expanding strategy.

Complexity:

The complexity of work for the department’s roles are evaluated based two critical dimensions:

  • the complexity of the client/businesses with whom the team of the department needs to interact in order to attract (new clients) and retain (existing) clients:
    • the complexity of the client’s organisation
    • the complexity level of key decision makers in the client organisation
    • the complexity of the business need
    • the complexity of the value message for every level of the client’s organisation

 

 

 

  • workload complexity that is measured based on:
    • number of clients to be attracted and retained based on the strategy approved
    • the duration of the sales cycle for attracting the clients of various complexity
    • the approach to the management of the existing clients to increase the “pocket depth”

  • the complexity of the functional work in regard to the business development to be performed in the role of by the department’s team to ensure the maturity of sales/business development system:
    • the complexity of the ongoing accountabilities in the role
    • the complexity of the improvement accountabilities in the role
    • the complexity of horizontal working relationships in the role
    • the complexity of the information to be dealt with in the role
    • the complexity of the decisions to be made in the role

Capability:

A set of tools is applied to evaluate the level of the capability existing in the department and the level of the complexity that the current team of the department can deal effectively:

As a result, the capability report is generated for the team of the department:

People Risk of Operational Effectiveness

Based on the established levels of the work complexity to be performed by the department and the levels of existing capability the people risk to the department’s operational effectiveness and sales effectiveness was identified as a mismatch between complexity and capability:

  • the poor maturity of the sales/business development system can be explained by the low level of the functional work performed in the department and an absence of the right level of capability to deliver a significant improvement in the maturity – level 1 initial maturity
  • insufficient number of the sales/business development personnel to deliver the sales numbers designated in the strategy – up to 50% in general and for some client groups up to 70%
  • insufficient number of the capable personnel to deal with the clients of the certain complexity (especially with the client businesses at level 6 and 5) of business complexity

The C3 Solution

As a result, in order to mitigate the people risk identified the following solutions based on C3 approach are proposed:

  • quality of the workforce – align the complexity of the client businesses, decision makers and contact points within these businesses with the roles of respective complexity within the banks and assigning the people with the capability level to match the work complexity. This will allow guarantee that the value message about the bank’s products is delivered to the right people in the client businesses by the right people in the bank

 

  • the quantity of the workforce – ensure the right number of people is assigned to the roles of various complexity level in the department to deal effectively with the workload of clients of various complexity by applying the C3 quantity workforce planning:

Return on Investment

The investment into the business development team to be made over the period of three years to ensure right people in right roles dealing with right clients led to:

  • the income of the international business is doubled in three years
  • increase in the conversation rates in a key group of clients
  • increase in clients’ retention and “pocket depth” with the existing products

About En-Sync 8020

En-Sync 8020, was established to bring together many specialist experiences to deliver a unique range of aligned and support services across a vast range of industries. Our alignment starts with the company tagline “Our business is people”, and is cascaded through all of our products and services.

Our combined experience exceeds 100 years. Our service delivery methods guarantee our clients success by ensuring that they have a robust and well-communicated strategy, a healthy structure and reliable systems and processes, supported by the right people in the right roles. We have delivered our services throughout the world and across industries such as:

  • Natural Resources
  • Manufacturing
  • Finance
  • Education
  • IT

Our services support the whole organisation, from the Board of Directors and CEO’s to the First Level of Management support which includes:

  • Business Consulting
  • Business Transformation
  • HR Support
  • Management Training and Development
  • Strategic and Operational Reviews

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