Case Study: Managing a branch closure program: an exercise in planning and managing the process of...

 

  
 

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Case Study: Managing a branch closure program: an exercise in planning and managing the process of change The aim of this activity is to explore the issues and choices involved in developing an overall strategy for large-scale change. The scenario A long-established bank is facing strong competition from new entrants into the retail banking market. The new entrants have acquired some high-street branches but specialize in the provision of telephone and internet banking services. Consequently, they have a lower cost base because they do not carry the overheads associated with a large branch network. The operations board of the traditional bank is busy working on a number of important projects and does not seem to have recognized the potential impact of the new competition on their market share and margins. You are a member of the operations board and you have given a lot of thought to the problem. You believe that the only viable strategy is to reduce the size of the existing branch network in order to reduce overheads, but to do so in a way that will lead to an increase in net revenue per customer. At this stage, you have not thought through all the details of the strategy. For example, should the branches targeted for closure be city-center branches occupying expensive properties, but providing services for high net worth customers who the bank would be reluctant to lose, or small rural branches occupying less expensive premises but with fewer customers of high net worth to the bank? Step 1 You have brainstormed a list of possible actions that could provide the basis for a way forward. These are listed below in Table 1.1. You are invited to review and revise this list of actions and use your experience to: a. Delete any items that, on reflection, you feel are unimportant or irrelevant. b. Add, in the space provided at the bottom of Table 1.1, any other actions that you feel should be included. You are allowed to add up to four additional actions. c. Think about how the actions might be sequenced from start to finish. For each action, identify whether you think it should occur early or late in the change management process. You can record this view in the space provided on the right-hand side of the table. Table 1.1 Possible actions that will inform the strategy taken by the bank 1 Identify key stakeholders who might be affected by the change 2 Provide a counselling service and retraining for those who are to be displaced 3 Inform staff how they, personally, will be affected by the closure plan 5 Identify a project leader and set up a branch closure team 6 Announce the scope and scale of the closure plan to all staff 7 Brief key managers about the problem and win their support for the closure plan 8 Identify which branches are to be closed 9 Review the success (or otherwise) of the closure programme and disseminate throughout the organization any lessons learned about change management Identify the information that will be required in order to decide the number and location of branches to be closed in order to achieve targeted benefits 10 11 Announce closure plan to existing customers 12 Train members of the branch closure team in change management skills 13 Identify (and quantify) benefits sought from closures 14 Develop a personnel package for displaced staff 15 Assess effects of the closures on other aspects of the bank's functioning 16 Plan any training that may be required for staff who are to be reassigned to other work 17 Hold team meetings to brief staff about the closure plans and indicate when they will be informed about how they (personally) will be affected by the change 18 Identify what steps could be taken to retain high value customers affected by the closures 20 Issue newsletter outlining progress towards full implementation 21 Decide who should be involved in analysing the information relating to whether a closure plan will deliver sufficient benefits to justify the costs involved 22 Seek views of customers who might be affected by the closures about what issues should be given attention Early 23 Seek views of branch staff about the issues that will have to be given attention if the closure plan is to be successfully accomplished Post-implementation, provide feedback to staff about how the change is affecting performance 24 25 Initiate programme to make properties suitable for disposal (e.g. remove vaults) 26 Celebrate successes and build on them in order to motivate people to continue working to improve the bank's competitive position 27 Decide on date for first closures 28 Identify any personal gains or losses that might be perceived by those employees who will be affected by the closures 29 Specify timetable for implementing the closure plan 30 Consider what might be done to motivate employees to accept the change Late 31 Issue a press release about the closure plan 32 Monitor progress against timetable and anticipated benefits 33 Explore the best way of disposing of redundant properties 34 Identify social banking issues raised by the closures (eg what will happen to customers without transport when their local branch closes) 35 36 38 Reflect on how well the change is progressing and discuss with colleagues what else could be done to ensure the change is successful 39 Decide who should be involved in identifying which branches are to be closed Plan what will happen to displaced staff (redeployment, early retirement, redundancy) Arrange an awayday for members of the ops board to focus their thinking on emerging threats and opportunities Step 2 Consider your list of action statements and assemble them into a plan. a. Identify the sequence of actions from start to finish, recognizing that some actions may occur in parallel or be repeated. b. Identify relationships between actions in your plan and consider how different actions might be grouped together to form separate steps or distinctive parts of your plan. Case Study: Managing a branch closure program: an exercise in planning and managing the process of change The aim of this activity is to explore the issues and choices involved in developing an overall strategy for large-scale change. The scenario A long-established bank is facing strong competition from new entrants into the retail banking market. The new entrants have acquired some high-street branches but specialize in the provision of telephone and internet banking services. Consequently, they have a lower cost base because they do not carry the overheads associated with a large branch network. The operations board of the traditional bank is busy working on a number of important projects and does not seem to have recognized the potential impact of the new competition on their market share and margins. You are a member of the operations board and you have given a lot of thought to the problem. You believe that the only viable strategy is to reduce the size of the existing branch network in order to reduce overheads, but to do so in a way that will lead to an increase in net revenue per customer. At this stage, you have not thought through all the details of the strategy. For example, should the branches targeted for closure be city-center branches occupying expensive properties, but providing services for high net worth customers who the bank would be reluctant to lose, or small rural branches occupying less expensive premises but with fewer customers of high net worth to the bank? Step 1 You have brainstormed a list of possible actions that could provide the basis for a way forward. These are listed below in Table 1.1. You are invited to review and revise this list of actions and use your experience to: a. Delete any items that, on reflection, you feel are unimportant or irrelevant. b. Add, in the space provided at the bottom of Table 1.1, any other actions that you feel should be included. You are allowed to add up to four additional actions. c. Think about how the actions might be sequenced from start to finish. For each action, identify whether you think it should occur early or late in the change management process. You can record this view in the space provided on the right-hand side of the table. Table 1.1 Possible actions that will inform the strategy taken by the bank 1 Identify key stakeholders who might be affected by the change 2 Provide a counselling service and retraining for those who are to be displaced 3 Inform staff how they, personally, will be affected by the closure plan 5 Identify a project leader and set up a branch closure team 6 Announce the scope and scale of the closure plan to all staff 7 Brief key managers about the problem and win their support for the closure plan 8 Identify which branches are to be closed 9 Review the success (or otherwise) of the closure programme and disseminate throughout the organization any lessons learned about change management Identify the information that will be required in order to decide the number and location of branches to be closed in order to achieve targeted benefits 10 11 Announce closure plan to existing customers 12 Train members of the branch closure team in change management skills 13 Identify (and quantify) benefits sought from closures 14 Develop a personnel package for displaced staff 15 Assess effects of the closures on other aspects of the bank's functioning 16 Plan any training that may be required for staff who are to be reassigned to other work 17 Hold team meetings to brief staff about the closure plans and indicate when they will be informed about how they (personally) will be affected by the change 18 Identify what steps could be taken to retain high value customers affected by the closures 20 Issue newsletter outlining progress towards full implementation 21 Decide who should be involved in analysing the information relating to whether a closure plan will deliver sufficient benefits to justify the costs involved 22 Seek views of customers who might be affected by the closures about what issues should be given attention Early 23 Seek views of branch staff about the issues that will have to be given attention if the closure plan is to be successfully accomplished Post-implementation, provide feedback to staff about how the change is affecting performance 24 25 Initiate programme to make properties suitable for disposal (e.g. remove vaults) 26 Celebrate successes and build on them in order to motivate people to continue working to improve the bank's competitive position 27 Decide on date for first closures 28 Identify any personal gains or losses that might be perceived by those employees who will be affected by the closures 29 Specify timetable for implementing the closure plan 30 Consider what might be done to motivate employees to accept the change Late 31 Issue a press release about the closure plan 32 Monitor progress against timetable and anticipated benefits 33 Explore the best way of disposing of redundant properties 34 Identify social banking issues raised by the closures (eg what will happen to customers without transport when their local branch closes) 35 36 38 Reflect on how well the change is progressing and discuss with colleagues what else could be done to ensure the change is successful 39 Decide who should be involved in identifying which branches are to be closed Plan what will happen to displaced staff (redeployment, early retirement, redundancy) Arrange an awayday for members of the ops board to focus their thinking on emerging threats and opportunities Step 2 Consider your list of action statements and assemble them into a plan. a. Identify the sequence of actions from start to finish, recognizing that some actions may occur in parallel or be repeated. b. Identify relationships between actions in your plan and consider how different actions might be grouped together to form separate steps or distinctive parts of your plan.

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Answer Table 11 Possible Actions for Managing a Branch Closure Program Action ImportanceRelevance Ea... View the full answer