Case Study Description of Nedbank: Transformational Leadership in Sustainable Turnaround
In 2013, the chief executive officer of South Africa's fourth largest bank, the Nedbank Group Limited, is considering the past and future of his organization. The company is in the process of transformation from a low point in 2003 of poor staff morale and falling share prices, with the threat of losing its licence because of poor capital liquidity, to the best bank in Africa, winning praise for its efforts in environmental sustainability and promoting the post-Apartheid government's broad-based black economic empowerment policy. Through acquisitions and joint ventures, the company is expanding into neighbouring countries with the result that, after a period of retrenchment, the number of branches and staff has grown. Clearly, his and his predecessor's clear vision, measurement and focus on culture have enabled the turnaround and subsequent organizational transformation. Yet, in the midst of the global financial crisis, the company is facing increasing competition not only from other banks throughout Africa but from telecommunications companies and retailers that operate financial services. The question now is: Can these transformation efforts be sustained?
Authors :: Caren Scheepers, Jabu Maphalala, Chantel van der Westhuizen
Swot Analysis of "Nedbank: Transformational Leadership in Sustainable Turnaround" written by Caren Scheepers, Jabu Maphalala, Chantel van der Westhuizen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nedbank Transformation facing as an external strategic factors. Some of the topics covered in Nedbank: Transformational Leadership in Sustainable Turnaround case study are - Strategic Management Strategies, Leadership transitions, Organizational culture, Succession planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Nedbank: Transformational Leadership in Sustainable Turnaround casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of Nedbank: Transformational Leadership in Sustainable Turnaround
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nedbank: Transformational Leadership in Sustainable Turnaround case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nedbank Transformation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nedbank Transformation operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nedbank: Transformational Leadership in Sustainable Turnaround can be done for the following purposes –
1. Strategic planning using facts provided in Nedbank: Transformational Leadership in Sustainable Turnaround case study
2. Improving business portfolio management of Nedbank Transformation
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nedbank Transformation
Strengths Nedbank: Transformational Leadership in Sustainable Turnaround | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nedbank Transformation in Nedbank: Transformational Leadership in Sustainable Turnaround Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Nedbank Transformation are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Nedbank Transformation is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nedbank Transformation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nedbank: Transformational Leadership in Sustainable Turnaround Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Nedbank Transformation is present in almost all the verticals within the industry. This has provided firm in Nedbank: Transformational Leadership in Sustainable Turnaround case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Nedbank Transformation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Nedbank Transformation is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nedbank Transformation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Nedbank Transformation is one of the leading recruiters in the industry. Managers in the Nedbank: Transformational Leadership in Sustainable Turnaround are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Nedbank Transformation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nedbank Transformation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Nedbank Transformation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nedbank: Transformational Leadership in Sustainable Turnaround Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Nedbank Transformation is one of the most innovative firm in sector. Manager in Nedbank: Transformational Leadership in Sustainable Turnaround Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Nedbank Transformation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nedbank: Transformational Leadership in Sustainable Turnaround HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Nedbank Transformation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nedbank Transformation has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Nedbank Transformation has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nedbank: Transformational Leadership in Sustainable Turnaround - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Nedbank: Transformational Leadership in Sustainable Turnaround | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nedbank: Transformational Leadership in Sustainable Turnaround are -
Increasing silos among functional specialists
– The organizational structure of Nedbank Transformation is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Nedbank Transformation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nedbank Transformation to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nedbank: Transformational Leadership in Sustainable Turnaround, in the dynamic environment Nedbank Transformation has struggled to respond to the nimble upstart competition. Nedbank Transformation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nedbank Transformation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nedbank: Transformational Leadership in Sustainable Turnaround can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Nedbank Transformation, firm in the HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Nedbank: Transformational Leadership in Sustainable Turnaround that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nedbank: Transformational Leadership in Sustainable Turnaround can leverage the sales team experience to cultivate customer relationships as Nedbank Transformation is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Nedbank Transformation has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Nedbank Transformation products
– To increase the profitability and margins on the products, Nedbank Transformation needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Caren Scheepers, Jabu Maphalala, Chantel van der Westhuizen suggests that, Nedbank Transformation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Nedbank Transformation has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround, is just above the industry average. Nedbank Transformation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Nedbank: Transformational Leadership in Sustainable Turnaround | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nedbank: Transformational Leadership in Sustainable Turnaround are -
Buying journey improvements
– Nedbank Transformation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nedbank: Transformational Leadership in Sustainable Turnaround suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nedbank Transformation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nedbank Transformation is facing challenges because of the dominance of functional experts in the organization. Nedbank: Transformational Leadership in Sustainable Turnaround case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nedbank Transformation can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nedbank Transformation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nedbank Transformation to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Nedbank Transformation has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Nedbank Transformation to increase its market reach. Nedbank Transformation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nedbank Transformation in the consumer business. Now Nedbank Transformation can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nedbank Transformation to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nedbank Transformation to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Nedbank Transformation can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Nedbank Transformation can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Developing new processes and practices
– Nedbank Transformation can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Nedbank: Transformational Leadership in Sustainable Turnaround External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround are -
Increasing wage structure of Nedbank Transformation
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nedbank Transformation.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nedbank Transformation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nedbank Transformation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Nedbank Transformation is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nedbank Transformation.
Stagnating economy with rate increase
– Nedbank Transformation can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nedbank Transformation in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nedbank Transformation can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nedbank Transformation needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Nedbank Transformation has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Nedbank Transformation needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nedbank Transformation in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Nedbank Transformation high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Nedbank: Transformational Leadership in Sustainable Turnaround Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nedbank: Transformational Leadership in Sustainable Turnaround needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nedbank: Transformational Leadership in Sustainable Turnaround is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nedbank: Transformational Leadership in Sustainable Turnaround is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nedbank: Transformational Leadership in Sustainable Turnaround is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nedbank Transformation needs to make to build a sustainable competitive advantage.