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 .
