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Keeping  Wema Bank on Treadmill too long

When a medication fails to truncate or  terminate the existence or  operation of an ailment for which it is targeted, it is either the ailment is wrongly diagnosed or the medication is impotent. In the corporate world too ,its corollary is not disputable :when  the strategies employed fail  to deliver the expected values to the stakeholders , the management of the affected corporate entity needs an urgent review of its strategies to properly diagnose its operations to get a clearer picture or definition of  the trouble.

However, where either a physician or a manager  is ignorant of this fact either by commission or omission, the consequence ,indeed, could be utterly dangerous . The patient either dies while the corporate entity becomes moribund , staying in the treadmill for too long or goes to  extinction.

Wema Bank Plc , one of the oldest banks , has been on the treadmill for long; no doubt , the bank is a victim of some wrong medications of its less savvy past leaders drafted to rescue it from the doldrums .Since this  bank was dethroned by some unconventional players and thrown to the back seat to start afresh like a demoted student , it is yet to get  the right kind of  leadership ,a leader with capability to reinvent it again to regain its lost competitiveness  For this lacuna , its strategic position , the impacts of the changing external environment, inefficient deployment of its  resources   by its successive leaders as well as  the negative influence of its powerful stakeholders, has  remained  uninspiring .

For this reason ,the only bank among the tier 2 banks that Wema Bank could claim to outperform is Unity Bank , a bank with negative shareholder funds .A 2021 analysis tagged Tier 2 Banks in the Afrinvest Paradigm and published by Proshare , a financial firm, confirms this assertion. Wema Bank ranked the least performing , overtaking only Unity Bank in all performance indicators amongst tier 2 banks in gross earnings, profit before tax, profit after tax , total asset, shareholders fund, customers deposit and net loans and advances. And even its 2022 figures confirm its treadmill position .

Until recently ,the bank had long been written off by investors as a clunker, characterised by low growth, low margins and an unmatched ability to destroy shareholder value. It became competitively enfeebled, experiencing downturn in every imaginable dimension .

While some companies overcame seemingly insuperable resource handicaps and built positions of global leadership , it is otherwise for Wema Bank ; due to this managerial malfeasance ,a richly endowed bank with heavy resources and talent almost destroyed itself .Today , the bank remains the shadow of its former self.

There is no smoke without fire .The reason for its current ugly strategic position may not be far to seek . By the fruits of any corporate entity you shall know its leaders .  To know the leadership of Wema Bank better , all you need is  just to  peep hard into its  interior workings ; what you see, indeed, is a laggard and certain big facts that stare you in the face are its usual traits. The bank has remained a corporate entity where a  leadership   still  spends   more time worrying about how to position the bank  in the existing competitive space  while  less time is  deployed to create  fundamentally new competitive space, just  protecting the past than creating the future and taking  the  industry structure as  given  while seldom challenging the prevailing conventions; more so, because its leadership  lacks    a clear and broadly shared understanding of how the industry may be different in the future and its headlights  is  not shining farther out than those of its competitors, its point of view of the future is not competitively unique.

The negative effects of  those wrong corporate attitudes are firmly  linked to what it takes to be  corporate laggard  and  are , indeed, palpable and enormous. Consequently , one of the effects of the the above tactical choices that is not hidden is the bank’s lack of influential power for  setting the new rules of competition in the industry simply because it is neither regularly defining the new ways of doing business nor building new capabilities and setting new standards for customers  satisfaction .

For this  ,  it  has remained more a rule taker than a rule maker within its industry ,less intent on challenging the industry status quo than protecting it ; and neither at alert to the dangers posed by new ,unconventional rivals nor keen at reinventing the current business model or regenerating core strategies as it is re-engineering the core processes .

Instead of pursuing growth and new business development with a vigorous passion to gain the ability to know where next revenue is coming from and where to save costs , it is pursuing downsizing .

That is the reason why its percentage of the improvement efforts that is focused on creating new advantages  which  is new to the industry is minimal and miserable compared to that that is  focused on catching up with the competitors .For this , it is driven by the actions of the competitors rather than its own view of opportunities

In the final analysis , what you see in the bank is the management that is more of a maintenance engineer keeping today’s business rather than an architect imagining tomorrow businesses .Consequently , the balance between the hope and anxiety in the bank , between confidence in its ability to find and exploit opportunities for growth and new business development and concern about its ability to maintain competitiveness in the company’s traditional businesses , between sense of opportunity and a sense of vulnerability, both corporate and personal, is more of fear than hope .

All the above inadequacies of its past leadership  that are reflected in the bank’s strategic position are nothing but outcomes of the leadership strategic choices that failed to deliver competitive advantage to the bank. These are the challenges confronting its new CEO ,Moruf Oseni. Can he create a history for the bank and himself by giving it the right medications and its    much expected competitiveness and values in the industry where it has been demoted to the basement .

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