Tag archives: teamwork

Sustainable Change in Organizations – Gathering of the Great Minds

I recently spoke at the Gathering of Great Minds organized by Live and Inspire. My topic was sustainable change in organizations. I talked about sustainability in terms of people, organization and the environment. This Q&A by Gerald Chuah of the NST is a good summary of the talk.

Managing for Success

Key Issues 

This article will take a holistic view of management. Subsequent articles will focus on the specific areas in greater detail. In Malaysia, in particular the financial sector, among others has been going through various stages of consolidation, with fewer and larger banks in the marketplace. The consultants or investment bankers who propose the mergers or acquisitions paint rosy pictures and their analysis often includes the terms “economies of scale” and “cross selling”. In theory this sounds good but it doesn’t always happen in practice. Studies estimate that between 50 to 80% of all mergers fail to add value. For this article we will be focusing on the financial sector. However, most of the lessons are applicable across industries and functional areas.

There are 3 key initiatives that companies can use to achieve “economies of scale” via “cross selling”, :-

 Breaking down walls

·       Customer focus

·       Single point of contact

1)    Break down walls between departments.

A mortgage salesperson at a large bank is not aware of the bank’s recently launched platinum credit card, When asked by his customers, the reply is “I don’t know, we have so many products. I don’t know what that department is doing.” This is a farly typical response from frontline sales people.

The reasons for this barrier to departments include:-

(a) different locations for the various business units

At one Multi National Company, I observed a division between floors. The 3rd floor sales team were fearful and suspicious of the 4th floor corporate offices. Neither party wanted to go to the other floor. Many banks face not just the challenge of different floors but also have the various business units located at different premises up to 30 minutes drive away. This divide can also happen when people are on the same floor but they put up barriers/silos between units.

(b) No real incentive to cross-sell other products.

Most employees today are often pushed for time. As such, without an incentive to cross-sell and learn about other products, it is unlikely to happen. Frequently, employees don’t put other department requests on top of their list of priorities.

To bridge this divide, companies can implement two measures – the “sponsored lunch” and a revised reward structure. 

“Sponsored Lunch” – Companies should ensure that the heads of department and key personnel to have lunch on a regular basis. People then get to know each other better and build a working relationship. Companies should allow employees to expense the lunch as the benefits of departments working together will show a return many times the lunch investment. In implementing this, departments could take turns hosting the lunch for their guests.

Reward Structure – An important determinant of corporate behaviour is the reward structure. The adage “you get what you pay for” will ring true with any sales manager who has increased commission for slow moving products. If a bank wants it’s employees to cross sell products, it should have an appropriate incentive scheme for them to do so. People fail to realize that the reward structure is one of the most important determinants of corporate culture and behaviour. As a sales manager for commercial vehicles, the most effective way to clear stocks of vehicles/accessories was to give double commission to the sales team.

2) Customer Focus. So often, many new products and processes are thought up in the top floor corporate office without taking into account the customer’s needs.

For example, when a local bank took over another company, they removed the drop box where a large number of customers paid their bills. This action was done without thinking of the customer. The ensuing customer uproar and card cancellation caused the drop box to be reinstated.

When banks want to encourage cross-selling, lack of customer focus is a major hindrance. In today’s market, customers are often pressed for time – yet banks require existing customers to fill out countless numbers of forms and submit the same batch of documents over and over again.

When banks come up with new products or processes, we would suggest they examine the key customer insight. 

Customer insights – All new processes and products should be based on a customer insight. New products especially should be there to meet an unmet consumer need. 

It is rare that the front line staff are ever consulted before a new product is introduced. If they are made part of the product development process then they are more likely to buy into the product and sell it.

A key consumer insight is that there are so many credit cards out there – does the consumer really need another card? The recently launched American Express Platinum Credit Card in Malaysia by Maybank offers golf course entry and discounts at the Shangri-La hotels for dining. These privileges are combined with a complimentary Longines watch if customer spending exceeds RM20,000 in the first 6 months. The benefit is designed to entice high net worth individuals to sign up with American Express.

The dining and golf privileges are designed to entice the customer in while the Longines watch is a smartly designed “carrot” to persuade the consumer to use the card as their primary card over a 6 month period. Once consumers get into the habit of using the card, it is likely that they will continue to use it thus giving Amex a high share of wallet by virtue of continued behaviour patterns. People will continue doing what they do.

3) Single point of Contact. Human beings prefer dealing with people they know and with whom they have a pre-existing relationship. 

A banking executive has an existing relationship with a customer who has taken RM10 million of company loans from the bank. He now requires financing for a BMW 5 series in his wife’s name. The banking executive passes his customer’s contact details to his colleague in auto finance. Frequently, the customer doesn’t receive the call from the auto finance colleague when promised. (BAFIA issues)

Due to silos/barriers mentioned in 1) above, there is little co-operation or incentive to work between departments. To truly maximize the economies of scale, the reward structure mentioned earlier should be in place. Also we would suggest that the customer have one key person that he/she talks to throughout the transaction. 

The single point of contact would help given the following :-

1) Pre-existing relationship – the banking executive would or should have some knowledge of the modus operandi and preferences of the customer. The relationship should also be at a certain point that each party can manage expectations clearly.

2) One person to be accountable – This will avoid finger pointing between departments – the buck stops at one person. For this to work, the bank should make sure that its inter department processes are able to run effectively and efficiently, i.e. minimal repeated processes that are so common with many banks.

If these key strategies are in place, the companies/banks should then be able to capitalize on their large size and truly becomes a seamless “one-stop shop” experience to their customer. This action plan would achieve economies of scale and offer a unique selling proposition. These solutions seem simple and obvious. If they are so simple and obvious, are we implementing them and more importantly are we implementing them successfully? juarezlowe helps implement these and other value added solutions to your organizations.

Juarez Salih Lowe, MBA, LLB, CLP is the Chief Executive Officer of juarezlowe. He has worked at Johnson & Johnson, Cycle & Carriage, Sapura and Lee Hishammuddin. His experience includes management positions in marketing, sales and law across a variety of industries in both Malaysia and Singapore. 

juarezlowe offers corporate training, coaching and consulting services in the areas of change management, negotiation and sales/marketing. juarezlowe‘s learning success across organizations and industries through its unique combination of:-

Interactive Learning where participants are able to interact, leading to the cross-fertilization of ideas. This is achieved via case studies and group exercises with a focus on application of theories.

World-class content adapted from the top international scholars made easy to understand and grasp.

Professional trainers with excellent academic qualifications and relevant corporate experience deliver the above.


For further details on how juarezlowe can add value to your organization or general feedback on the article, please contact us:-

Tel – 03 22614248

Why do So Many Mergers Fail, Holthausen, Robert, Knowledge@Wharton March 2005