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MORUF  OSENI: Another  Dilettante or Ace in The Hole   for Wema Bank ?

One of the biggest lessons taught by Gary Hamel and C.K Prahalad  in their book  ,”Competing for the Future”,is the power and importance of  competitiveness”  .According to these Authors    ,  competitiveness” is a growth industry and a  highly critical issue when discussing the progress of a person or an entity. For this, presidents and prime ministers vow to improve it, legislators debate it, economists measure it, and editors feature it. What is equally undisputed is that when a corporate entity is  highly  competitive or otherwise ,usually  the accolade  or blame is always apportioned to the leadership behind it  .This is because  the bulk stops at the leaders’ table.

  History  ,indeed, is littered with the leaders who have demonstrated their wizardry in delivering this feat ;  they carved  the  future of their organizations’  from the  scratch .  Steve Jobs , one of such leaders ,  built the massive Apple empire from scratch and made it great with this power of competitiveness .  Apple is not just  great, but “insanely great,” as he exploited the best of his employees and partners  ;   Elon Musk is another one . He has shown that one of the best ways to get people talking is to  ditch traditions and simply be yourself.  In Nigeria  , Fola Adeola  and Jim  Ovia , to mention just a few , nurtured both Guaranty Bank and Zenith Bank from the scratch to industry leaders ,overtaking the incumbent till today with that critical  element  of performance  .

However, some leaders   have done exactly the opposite too ; they  turned some highly competitive entities to corporate laggards. For his failure to see the opportunities in the digital world or precisely for his complacency and lack of vision , Kay Whitmore , CEO of Kodak ,lost the same power ;he failed to rescue this company from a serious  decline as digital started to take over the world .

In  Nigeria , Wema Bank Plc, a 77  years old bank  suffered the same fate as Kodak.  For this, the bank is currently on the throes of malfeasance and ineptitude leadership .Its performance as indicated by the figures from its annual reports on yearly basis tell this story better .Although  the bank prefers to use historical  data comparison to bench mark its progress to  give its stakeholders the impression of an impressive performance year on year  ,when an  industry or sector  comparative  bench marking is adopted to measure its competitiveness , 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 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.

 That is why most of its woes could  be pinned down to its leadership  inadequacies . In other words ,Wema Bank , a onetime industry  champion ,has remained in the treadmill too long   simply because the bank has been unlucky to be under the leadership that were merely dilettantes . The types that were only content to follow, that desired not or lack the capability to rewrite the rules of the game , those that were afraid of orthodoxy, less inclined to build than to cut , less concerned to make the difference than making career and not absolutely committed to staking out the future first .

The bank is a victim of a set of leadership without a masterful blueprint that addresses how executives can ease the tension between competing today and clearing a path toward leadership in the future ; its leaders from one time to another were not only less attuned to the changing trend but lacked the necessary strategic capability to activate  this stunted entity

Lack of foresight, stretch, and leverage, the critical elements  which  provide the energy and rationale for proactive advantage building and industry re-engineeringIts are the key reasons and critical leadership lapses for its inability to regain its competitiveness . For these  reasons ,it  has remained  relatively a glorified community bank without any drive to be competitive or outperform its competitors .

   Truly , the   challenges  confronting Wema Bank are beyond the capability of the dilettantes that had been behind this bank’s driver seat; it needs   a leader  with the capacity to influence others through inspiration motivated by passion, generated by. vision, produced by a conviction, ignited by a purpose.  

   Some observers and analysts noted that unless a strong strategic leader with appropriate strategic choices  is sourced  and its resources are creatively deployed to create critical and competitive values to its stakeholders  , the hope of reviving and returning the bank’s past  competitive  position  appears to be remote still  . This is simply because of the heavy gravity and magnitude of damage inflicted on the bank by its past leadership. This pessimism could be pinned down what is believed to be   its management  strategic errors  in the past which still  persist today in the bank .

THE HARD NUTS , THE CHALLENGES BEFORE ITS LEADERSHIP .

 A detailed analysis of the bank’s heath status and the initiatives adopted  by its successive leaders to tame it , no doubt , could shed more light on the above observation and assertion.

 Indeed ,  the  challenges before the past leaders deployed to revive this bank were enormous and deep seated . The foundation of the bank’s past , no doubt , had shaken and fractured terribly ; the industrial terrain changed shape faster than the top management could refashion its basic beliefs and assumptions on which markets to serve ,which technologies to master ,which customers to serve and how to get the best out of employees .

Specifically, the bank’s past leaders assigned to rescue it were the victims of  the new competitive realities that  ruptured the  industry boundaries, overthrown much of standard management practice, and rendered conventional models of strategy and growth obsolete. Unfortunately , its leadership could not wake up on time to those challenges .   

In other words , the painful upheavals in the bank over the years were enormous and  reflected the failure of its past leaders that destroyed the bank by one way or the other to keep up with the accelerating pace of industry change  not necessarily those brought to reposition it . Unfortunately , the successive leaders brought to rectify the anomalies of the past have proved less savvy despite some frantic efforts deployed . This is particularly so  because when faced with the tides of technological, demographic, and regulatory change, the past  success  of  the bank had been eroded or destroyed  due to the order of magnitude productivity and quality gains made by non-traditional competitors .  

    This is not unusual.  Honestly , some analysts believed ,this is usually a kind of  task  reserved only  for  a strong  strategic leader to resolve in any clime ; in all too many cases , only  few leaders could control the destiny of any  organization under  those circumstances .

Under these circumstances , the leadership of Wema Bank ,no doubt , lost its control of the bank’s destiny as it was  buffeted by the above forces . This has remained the trouble with Wema Bank.

   The Strategic Choices That Keep It  on Treadmill      

 A very significant hallmark of a strong leadership is an understanding of the bases for the future strategy as well as the options for developing strategy in terms of both the directions and methods of development . However , certain strategic errors made by its leadership deployed to reposition for better competitive advantage continues to keep the bank in the treadmill.

But this observation may not be farfetched . In this situation ,  Wema Bank ,    an organization believed by some analysts to be  run by managers not leaders ,by maintenance engineer not architect   what happens usually is  that the urgent usually drives out the important , the future goes largely unexplored and the capacity to act rather than the capacity to think and imagine becomes  the sole measure of leadership.

Sequel to the above scenario , instead of competing for the  future or building competences or rewriting the rules of the game to beat its competition , what occupied the senior managers attention of Wema Bank were restructuring and reengineering .

This restructuring, as usual ,comes under different names like refocusing, delaying, decluttering, and right sizing .However they give the same results: fewer employees ,reduces the entity size or assets .

 To be fair with those who came later to reposition ,it  might be difficult to blame  a leadership in such a circumstance for taking the above initiative  as it was confronted by the problem of either no growth or slow growth.  This is because ,with this problem it might not be able to support the burgeoning employment rosters and significant investment programmes. The problem of low growth is often compounded by ballooning overheads , diversification into unrelated businesses and the paralysis imposed by unfailingly conservative corporate staff.

In the process of this and faced with competitive problems of stagnant growth, declining margins and falling market share, the past leadership just  embarked upon restructuring   .Every successive CEO   of the bank in order to save the bank consequently  picked  up the knife and started the work of brutal restructuring . The goal of this was usually to carve away layers of corporate fat ,jettison underperforming businesses and raise the asset productivity. And the  fear was that those executives who don’t find room for emergency surgery in this type of situation  might lose their jobs .

To deliver and execute this agenda  , its CEOs  just made use of the corporate resources, launched some tough programmes to improve the return on investment ,ROI .  In the process of this  , usually a leader usually targets one of the two components  of ROI which include , firstly  , the numerator or net income and  secondly  , the denominator or investment, net assets or capital employed. In a service industry like banking , headcount may be appropriate denominator.  

 However , knowing that raising net income is usually a harder slog than cutting assets and headcount, Wema Bank leadership   preferred and opted for cutting the assets . Grappling with the challenge of competing in a harsh environment., the bank was at work, sleeves rolled-up, digging a trench for bad and delinquent loans .To its management , it was the sinecure for a stronger balance sheet in the future     

The reason for the management’s  denominator cutting  option is simple:  to grow the numerator , top management must have a point of view about where the new opportunities lie ,must be able to anticipate changing customer needs ,must have invested in building new competencies and so on

However , this is difficult when such a top management is under a quick pressure to improve ROI . indeed , the  past leaders of Wema Bank  were glaringly under a severe pressure to improve  the bank’s returns on investments  or turn the bank around for better value delivery .

Sequel to this , its management from one leader to another   from all indications usually reached out for the lever that brings the quickest ,surest improvement in ROI and began to cut the bank’s to generate better returns to justify its leadership .

To cut the denominator, however , top management doesn’t need more than a pencil . This is reason why managers are usually obsessed with the denominator , an accountant short cut to assets productivity. This is usually to gain efficiency and higher productivity or to be able to get to the future first and get there for less . However , this option is usually less preferable or desirable to analysts as a route to productivity or return improvement.

What some analysts prefer to the above strategy is reaping productivity and efficiency gains by growing the revenue stream atop slower growing or constant capital and employment base .They believed ,an aggressive denominator reduction, under a flat revenue stream ,is simply a way to sell market profitability cheaply   , what marketing strategists term a ‘harvest strategy ‘and consider a no brainer. But that was the option  preferred by some past leaders  of Wema Bank  .

 Moreover , Wema Bank over the years  did not only embark  on restructuring as strategy of its survival it also added reengineering its processes .The reason for this  clear: reengineering is a necessity child of restructuring.

Recognizing that restructuring is ultimately a dead end , smart companies have moved on to reengineer their processes. The management of Wema  is not left out . First , this is to root out needless work and get every process in the bank for customer satisfaction, reduced cycle time and increased total satisfaction.

However , one good observation that should be noted is that though the ostensible goal of reengineering is to focus each and every process on customer satisfaction, its main purpose is the promise of reduced costs.

Despite the above frantic efforts , Wema Bank has remained on the treadmill for so long and less competitive held hostage by the worst cost of doing business in the industry . In 2021 ,Wema Bank had the highest cost of funds at 4% and cost to income ratio is above 80%, going by its 2022 results . The most damaging is that the bank is neither better nor bigger relative to its competitors .

The failure of those  strategic choices to remove the bank from the treadmill  , however , should not spring any surprise . Although the two tasks of restructuring and reengineering are legitimate and important ,  they have more to do with shoring up today businesses than creating tomorrow industries  ; they are no substitute for imaging and creating the future ; and don’t ensure continued success if the company fails to regenerate its strategies .

Moreover , a company that succeeds at restructuring and re-engineering but fails to create the markets of the future could not gain the position of leadership.

This is because the process re-engineering and advantage building efforts are more about catching up than getting out in front .

Furthermore , any company that is more successful at restructuring than re-engineering will become more smaller faster than getting better  as Wema Bank currently .This is because re-engineering offers at least the hope , if not the reality, the hope of getting better as well as getting smaller. But the issue is that a company with those strategic choices surrenders today’s businesses when it gets smaller faster than it is getting better, surrenders tomorrow businesses, when it gets better without getting different .

In addition to the above , one of the inevitable results of downsizing is the plummeting employee morale just as it seldom results in fundamental improvements in the business. At best , some analysts believed , it buys time . That is why a savvy investor is usually encouraged to look at restructuring announcement as a signal to sell rather than to buy .

The simple fact is that getting smaller is not enough since downsizing is believed to be an equivalent of corporate anorexia and could make a company thinner not necessarily healthier .

  WERE ITS LEADERSHIP SO DAFT OR LAZY?

With the above initiatives , it would be unfair to accuse the past leadership  of laziness .In fact ,  stress ,burnout and perpetual jet lag are their less occasional occupational hazards  than a way of life for most  of its executives  till today . What happened ,however , is that   it takes substantial and sustained intellectual energy to develop high quality, robust initiatives  that could tame the bank’s   corporate impotency and they seemed to lack this  . Moreover , some analysts observed and alleged  that   the knowledge and experience that justified  their position in the corporate pecking order , was  either irrelevant or wrongly  headed for the future .

Though to some people  those observations raised above  on the strategic position of Wema Bank could appear exaggerated ,however , those views and observations  could be justified by its weaker position relative to its competitors in the industry .  And  this is the  only way to glean valuable insights into the damage done to Wema Bank by its past leadership and truly measure its performance .

The Need To Regenerating its Core Strategies

The current status of Wema Bank is not only unfortunate but highly worrying as none of those appointed to lead the battle for its resurgence has succeeded  . For several years, Wema Bank was a banking’s front player ; it was not merely a household name; it was a verb. But for more than two decades now , the bank had been swiftly dethroned by some unconventional competitors that have dominated the industry since then .

But the hope is not lost yet . To lift Wema Bank of the treadmill analysts believed it needs a leader who must be capable of fundamentally re-conceiving itself, of regenerating its core strategies and of reinventing its industry ;it must be capable of getting different .

.

To create new businesses, the bank must or will have to regenerate its core strategies and reinvent its very concept of self — its channels, manufacturing processes, customers , criteria for promoting managers metrics for measuring success and so on .

It needs a leadership that could create new value and competitive advantages for the future. Beyond building competitive advantages in relation to current competitors, it also needs to identify growth opportunities for the future   and create  new products and services, technologies, resources and capabilities.

In other words,  the bank needs a strategic entrepreneur as a leader to embark on advantage -seeking strategy activities and opportunity-seeking entrepreneurial activities to create value. While  the leadership  strategy supports this by forming competitive advantages,  its  entrepren- eurship contributes the identification of new opportunities in the market or environment. The latter involves entrepreneurs that innovate by identifying and exploiting new ideas and inventions that result in innovations.

Strategic entrepreneurship and its outcome, innovation are essential for the long-term survival and success of all organizations; entrepreneurship and one of its most central ingredients and outcomes, innovation, are fundamental not only for creating value for customers, organizational growth and prosperity, but also generally for today’s economy. The management of this has failed to do the above at least  competitively   . 

 Can Moruf Oseni  Make the Difference?

 However, a spate appointments to replace its retiring CEO  and the board chairman as well as some key positions recently has continued to raise mixed reactions towards the possibility of the bank changing its fortune under its new leadership . The  recent   appointments include Mr Moruf Oseni who was appointed as the substantive Managing Director and Chief Executive Officer effective April 1, 2023 succeeding Ademola Adebise .Also , appointed is the board chairman,  Dr. (Mrs) Oluwayemisi Olorunshola   . “In addition to the Board Chairman and Oseni’s appointments , the CBN also approved the appointments of Wole Akinleye as Deputy Managing Director, and Tunde Mabawonku as Executive Director,” it noted.

“Wole Akinleye previously served as the Executive Director in charge of Corporate Banking and the South-West Business, while Tunde Mabawonku served as the Bank’s Chief Finance Officer.

 While there were the usual excitements as expected in  such an occasion in the bank , however ,outside the four walls of Wema Bank , it was the opposite among some analysts and other stakeholders . Despite the pedigrees of those newly appointed ,the question remains,  are they not another lame ducks  ?

To some analysts ,though those  appointed  have the necessary experiences and trainings that could be leveraged to lift the bank out of the sideline ,they also expressed the fear that there could never be any dramatic change in the fortune of Wema Bank because Mr Morouf and the existing board members are the same  products  of the same organization culture that keep the bank  where it is today in the industry as a back bencher . 

   But there are those who believed that with the sterling profiles and pedigrees of those not at the driver’s seat the bank is likely to witness a dumfounding turnaround .

Then , where does the truth lie?  Truly , if the task of turning Wema Bank were a question of its leadership’s  profiles , then the bank has landed in the right  hands . “Before his appointment as MD/CEO, he served as Deputy Managing Director for the last four years, a role where he demonstrated the capacity to lead the bank to even greater heights as it continues to evolve into a financial powerhouse,” the statement read.

“With over 25 years of experience, including more than 16 years at senior to executive management levels, Oseni was the MD/CEO of MG Ineso, a principal investment and financial advisory firm.

The bank added that Oseni has an MBA from the Institut European d’Administration des Affaires (INSEAD) in France, a Master’s in Finance (MIF) from the London Business School, and a B.Sc. in Computer Engineering from Obafemi Awolowo University (OAU).

He is also an alumnus of the Advanced Management Program (AMP) of the Harvard Business School and King’s College, Lagos, according to Wema Bank.

Dr. (Mrs) Oluwayemisi Olorunshola joined the Bank as a Non-Executive Director in year 2022 and until her new appointment, was the Chairman, of the Board’s Nomination and Governance Committee.   Prior to her joining the Bank, Dr. (Mrs) Olorunshola had worked with Unilever Nigeria Plc for fifteen (15)years with experience spanning across supply chain, business re-engineering and process management. She has over ten years of boardroom experience and business management. She possesses a B.Sc.degree in Education & Economics from the prestigious Obafemi Awolowo University, Ile Ife, a Master of Business Administration degree from University of Liverpool, UK, and a Doctorate degree in Business Administration from Walden University, USA. She is a well trained professional in various aspects of business management and corporate governance practices from various training facilities such as Four Acres Training Facility, Unilever UK, FITC, Leishton Academy, H Pierson

But the task of turning the bank around appears to beyond the above profiles of its new leaders . Some observers believed selecting a CEO  is  a fiscally serious issue and this where Wema is not getting it right  .

 A consensus opinion is that everything depends on the quality of the bank;s Board of Directors . Not only in Wema , they believed mostly ,the board of directors entrusted with this responsibility   is a decisive determiner of the bank’s future .

Analysts  most the error of  selection of a new CEO comes from this organ . The first observation is that they usually go looking for hard facts —evidence of rock-solid performance such as proof of technical skills  or academic brilliance when it comes to making their choice for that critical position. With that kind of indisputable data in hand, boards feel they won’t go wrong.  But leadership ,they claimed ,  is a combination of personal behaviors that allow an individual to enlist dedicated followers and create other leaders in the process.

 For instance,  real leaders, like Intel’s Andy Grove, Corning’s Roger Ackerman, TIAA-CREF’s John Biggs, are great because they demonstrate integrity, provide meaning, generate trust, and communicate values. In doing so, they energize their followers, humanely push people to meet challenging business goals, and all the while develop leadership skills in others ;real leaders are known  move the human heart.   

The problem with Wema Bank or  the  major challenge before  it  is how to get a leadership  with the  above combination of capabilities that could enable it to  gain competitiveness .

 This  situation, which  is  believed  by some analysts to be responsible  for the   bank’s inability   to move out of the treadmill , could be  pinned down   to its  board   directors that is allegedly   unable to live up to the expectations .

 They believed    that  Wema Bank  Plc  could only  restore its past glory and  gain its much desired competitiveness when its  Board of Directors come to a shared definition of leadership with the above traits . This ,according to them  ,contains  something about the ability to move human hearts—to challenge people and make them want to scale steep peaks .

 Other things include ability to  resolve strategic and political conflicts that hinder its capability to pick  a candidate that has  real leadership capabilities  and   actively measure    the soft qualities in CEO candidates such as integrity, the ability to provide meaning, and the talent for creating other leaders.

 Its  board of directors is also  warned   to beware of candidates who act like CEOs   that  merely seduces  by his or her articulate, glamorous charismatic dreamers who send multiple frissons down their collective spines .This , some analysts noted , is because  many of the greatest corporate leaders come up short on the charisma scale, because charisma typically goes hand-in-hand with inflated ego  .

   Moreover , a situation where  its   board is averse  to outsiders who threaten to shake things up    is equally considered  a serious handicap to the bank’s competitiveness ; this appears to be a threat to those intent on preserving the status quo.

 They believed the    person  to be selected to lead Wema Bank  , they warned,  should not  necessarily be a candidate who comes with a detailed plan to “turn things around ”  but  a candidate who has a broad and long-term  perspective, a set of convictions about the company’s strategic direction, a clearly thought-out managerial philosophy, and an understanding of how to galvanize the entire organization toward change.

 Poor Strategic Position , Outcome of Poor Leadership, Still Lingers

 When the strategies employed failed to deliver the lost competitiveness because of the impacts of the external environment ,internal resources and competence as well as the expectations and influence on those strategies , the strategic position remains uninspiring . The absence  those  qualities that are imperative for good leadership is reflected in Wema Bank’s strategic position and could be traced to its managerial lapses. For instance , one these lapses that is obvious that while its  successive leaders  had been spending more time worrying about how to position the bank  in the existing competitive space  , less time is being deployed to create  fundamentally new competitive space, protecting the past than creating the future and taking  the  industry structure as  given and seldom challenging the prevailing conventions ;  Its leaders were also believed to lack   a clear and broadly shared understanding of how the industry may be different in the future as   its headlights   were equally believed not shining farther out than those of its competitors while neither its point of view of the future was competitively unique.

Consequently , the bank lacks the  influential power in setting the new rules of competition in the industry 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  , the bank 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 operational efficiency and downsizing .

That is the reason why its percentage of the improvement efforts that is focused on creating new advantages 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 a nutshell , the reason for this ugly  scenario may not be far to seek. Behind 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. . 

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