F&A POLICIES READY
FOR THE MILLENNIUM
6
info exchange
What'S NewS Issue 8 August/September 1997
In the run up to the millenium, the new Food and Agribusiness (F&A)
Plan has been unveiled, bringing with it profound change.The new
look, in line with our customer focus strategy, promises to be both a
challenging and far-reaching one. What's NewS reports on the how's
and why's of F&A's revolutionary new approach.
'People have to
understand: we're
talking about
nothing less thart a
revolution in the way
we operate,says
Peter Greenberg.
Food and agri's new policy plan for the
period 1997-2000 will bring a profound
shift both in our operating philosophy and
in the composition of the F&A business
itself. Moreover, it mandates that the
added value of all our F&A activities must
be increased substantially. The dual aim
being to generate superlative value for our
clients and, in this manner, to increase our
own return on solvency.
SOLUTION SOLVING
So far, we have succeeded in placing
Rabobank International's F&A operations
in a leadership position on the world map.
However, our corporate banking activities
within the F&A field place too much
stress on solvency-intensive credit
products and not enough on the service
and solutions-oriented lines of the
consultancy business. We must consolidate
our global position by becoming the
authoritative source of state-of-the-art
F&A corporate finance and investment
banking advisory services. At present, of
course, we are primarily engaged with
medium- and large-sized agribusiness
companies. These are active (and often
leading) players in their respective
markets. Our intimacy with these
customers and our affinity with their
industry have been key factors in our
success to date.
TARGETING VALUE
In the future, however, we will also be
targeting large customers operating
downstream in the F&A value chain: the
global food companies. This is a highly
competitive market. In many cases, these
companies are less interested in our
traditional strengths - such as industry
knowledge and access to industry
networks - and more concerned about
specific treasury/capital markets products
and services. The implication is that we
will have to radically increase our efforts
not only in corporate finance and
investment banking but also in
agribusiness research (with respect to
F&A markets overall) as well as in equity
research (on the individual company
level). More importantly stilt, F&A
relationship managers will have to learn
not only to extend the scope of products
and services on offer, but also to
reconceive the very way in which they
work.
CLIENT RELATIONS
If we are to achieve our goal of becoming
the Banque du Référence in global F&A,
then relationship managers will have to
learn to assume an altogether new role.
Fienceforth, they will have to jettison their
accustomed function as salespeople
offering credit products, and learn instead
to act more as consultants, who can
demonstrate an ability to listen to clients
with care, to match service offerings to the
customers' specific and ever-changing
business needs, and to generate enduring
relationships based on mutual trust.
'People have to understand: we're talking
about nothing less than a revolution in the
way we operate,' says Peter Greenberg,
the business manager of our F&A
division. 'We are moving away from a
monochromatic, asset-driven
organizational structure and are rapidly
moving towards an era of multi-
disciplinary teams. We will have to devote
considerable resources to reconfiguring
our most valued resource - our network
of F&A professionals - in preparation for
this imminent change.'
FACTS OF LIFE
One of our top priorities is therefore the
implementation of a far-reaching
retraining programme to educate F&A
staff about the 'facts of life' about
working within the matrix operating
environment. An international
Relationship Management Training
programme is being designed in close
cooperation with the Nijenrode Centre for
Corporate Renewal. It will be comprised
of three three-day modules, taught by
instructors from Flarvard, the London
School of Economics, Nijenrode
University and several other institutions,
and will extend over a period of about six
months. The modules will focus on food
and agribusiness, corporate finance
investment banking, plus relationship
management and marketing. The first
class of twenty Rabobankers are
scheduled to begin in January of next year,
and will be required to pass rigorous
qualification tests at the programme's end.
SEVEN PRINCIPLES
Meantime, the new F&A Plan articulates
the following 'Seven Principles of Change':
Introducé a selective approach to
general lending: Regionally, it is clear that^®
Australia and New Zealand and the
emerging Eastern Europe are showing a
very vigorous performance. The activities
in Latin America are also developing well.
North America, meanwhile, is merely
'ticking over', while returns in the Western
European operations, apart from Utrecht,
have come under pressure. The business
plan foresees a twofold increase in our
F&A activities' ROSadd, the figure which
indicates cliënt profitability and return on
solvency, which is projected to rise from
the current 3.32 per cent to some 6 per
cent by the year 2000. In cases where we
cannot provide customer value and
achieve this higher ROSadd, general
lending should be ceded to other
providers. This will be particularly true in
developed areas like North America and
Europe.
Redirect our focus from that of primary
credit provider towards that of arranger
and underwriter: Rabobank
