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Sena Aslan, FDM Turkey CEO, newly hired to lead an initiative towards cashless online banking transactions, spearhead banking kiosks, and implementing a text-based method driven towards agility in the business. The organisational changes seen by management and her as core to the company’s performance, improvement in service delivery, competitiveness, and embracing change in the market, receive positive reception by some stakeholders but also hugely criticised negatively.
The changes she is introducing such as laying off some employees including senior management to pave way for new talents and restructuring hierarchical corporate culture to performance-driven, as well as moving away from siloed branch structure have received both positive but mostly negative reception.
Particularly, she faced resistances including FDM Turkey’s COO- Erkan Malas who as she noted hates change challenging every strategic shift she made. She has non-banking background (a young former consultant to the financial industry – with seal and big ideas on ways the company should adapt to rapidly changing market). However, she is seen as outsider with no experience on banking system- leave alone executive position- saying she had a lot to learn. Listed are challenges faced in attempt to introduce and implement changes:
Factors Driving Changes
Among other functions, the primary role of CEOs revolves around transformation of an organisation. These roles have increasing become complex particularly in an environment driven by rapid advancing technologies, heighten consumer demands, and complication bound around international collaboration and regulations. Even for a small relative local and ‘isolated’ companies, changes in external environments attributable to internationalisation and globalisation of business activities and people collaboration in larger scale have had significant impact to the point where for survival, growth, and performance, a company has to change in conformity to the external marker demands, consumer preferences, environmental regulations, and technological advancement. However, attempt to modernise and being in par with as well as going beyond the current market state induce number of changes. First, change adoption requires integrating different components, which have to come together perfectly for the desired outcome to be a success. These components that include technology acquisition, framework development, skills and knowledge development, building and maintaining required team, and restructuring organisational culture can be quite expensive both financially and human resources needed. Therefore, for CEOs, a big question they have to bounded when faced with change adoption always revolves around weighing between the cost and benefits balance. For instance, integrating new technology when organisational structures such as employees’ skills and knowledge, organisation culture, inherent internal bureaucracy, and employees’ attitudes towards changes would have detrimental effects not just driving a wedge among the stakeholders leading to dysfunctional structures within the company but also result in financial losses.
Hence, for this case, implementation of restructuring process would not be worth it despite the long run benefits it would have for the company. However, for the company to remain competitive and bracing for future performance under survival and sustainability through continuous changes whether internally or externally, a CEO has to make a decision on changes to implement and respective rates. These under need to embrace business innovations while managing what to change and extent of the transformation is present number of challenges to CEOs. For Sena, as a new CEO, the extent of ‘shaking things up’ through introduction and implementing changes come with to remodel banking systems but question is whether customers are ready to embrace changes –applying for loans without specialist assistance –guide them through --- need for more data. Data driving changes informing decisions rather than going with assumptions is key taking time to understand the consumer needs (preferences and not just reacting to market’s perceived changes
Incorporating the entire team, organisation’s stakeholders in this case. – for Sena, slowing down regrouping and ensuring all members buy into the change- understanding why transformation is needed, extent of change to be implemented, affected areas, and addressing satisfactorily any concern held – job loss, their new role, what happens to consumers, what the future happens for them? For a change to be success, the affected players should see them as part of the initiative not just managements’, employer’s, or Sena’s in this case.
For some, as indicated, slowing down might send a perception of second-guessing the decision taken but it actually given people needed break and time to internalise the changes such as understanding the scope, need, and extent is core in addressing any concerns. For instance, being first to enter the market in attempt beat the competitors to the market and differentiating oneself need to be followed by the question whether it is worth it. Being first in delivering a product if the employees and organisation culture do not support as well as not adequately prepare for it (similarly, not knowing for sure how the consumers/ market will react to the products and changes)
Change might be necessary and good for the long-term organisational survival and performance but it not taken with proper planning including incorporating key stakeholders that include customers, employees, investors, and management, it may end up destroying firms ideals, cultures, and wastage of resources. However, change is needed for business survival but at what rate so as not to obliterate business core values- culture, encounter employees resistance
Among other things, change implementation need to manage change fatigue. The change need to given employees and management adjustment period enable understand the reasons for the changes. For instance, explaining to them and not just assuming the do know and understand that the industry is changing such as customers shifting to mobile and online banking.
Bierwolf, R.E. and Frijns, P., 2019. Consciousness, Competence, and Organizational Change. IEEE Engineering Management Review, 47(4), pp.32-38.
Healy, P., 2017. Case Study: How Much Should a New CEO Shake Things Up?. [online] Harvard Business
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Lock, D. and Wagner, R. eds., 2018. The Handbook of Project Portfolio Management. Routledge.
Ramani, S., 2018. Improving business performance: a project portfolio management approach. CRC Press.
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