'OUR PEOPLE ARE MAKING
THE STRATEGY WORK
4
customer value
What's NewS Issue 9 October 1997
It is almost 18 months ago since the first move towards developing
the customer focus strategy on an organization wide basis was
initiated. For months, Rabobank International turned itself inside out
and examined indepth every aspect of itself, its culture and its ways
of working in a rapidly changing environment.There was clear
consensus on one point and that was the way forward. Everyone
agreed we should focus our activities in areas where we could pursue
a valuable focus strategy for our clients.The shift in mind-set and
organization has not been an easy one. But, if the interim figures are
anything to go by, we are getting there, we are getting at a stage in
Rabobank International's development where our customer focus
translates into value for the cliënt - and for Rl. Arthur Arnold
As this issue of What's NewS goes to
press, our Marketing department will be
putting the final touches to a rather
different interim report for RI. This is not
only a listing of figures and numbers (they
are actually very encouraging), it also
contains a selection of the transactions
(provided by all our offices) that we have
done for our customers throughout the
network since the beginning of the year
and organized according to the customer
focus approach. 'We are definitely
beginning to see the results of generating
customer value by acting as more of an
intermediary in structuring solutions for
the customer,' says Arnold, 'and away
from being an investor by increasing our
loan portfolio on our balance sheet only.'
THE BIG ISSUE
At the same time, Arnold is convinced the
quality of the deals we are now doing
shows both greatly increased focus and
networking. 'Most of them are a direct
result of teamwork between the people
regardless of where they are located. That,
I think, is a big improvement.' He believes
firmly that the network is becoming less
sensitive to where a deal is ultimately
hooked. 'That's because of the single
bottom line concept,' he argues. 'We have
now built that into the 1998 budget
process. You start to consolidate results,
and you look at activities along business
lines following our customer target
groups. If you go through the business
plans that were distributed around the
network recently, you will see they are
clearly compilations of all our business
activities in all the different offices
following our seven customer focus
groups.'
MAKING CHOICES
Yet, in spite of the promising numbers (see
sidebar) which appear to confirm belief
not only in the feasibility of the customer
focus strategy, but also its efficiency in
carrying RI into a strong niche position
for the future, not everyone is clear on
how the whole thing fits together. Some
uncertainty has arisen around the almost
exclusive emphasis on food and agri,
leading some to ask: what about non-food
and agri? How do we meet our other
business targets when so much is being
injected into our image as a global F&A
bank? Apparently, Arnold is not suffering
from any lack of clarity. 'When you make
choices,' he says, 'you make choices. We
decided together about the do's and
don'ts. And you have to stick to that. It's
hard. But once you underwrite a strategy -
RI'STOP SEVEN
The customer focus strategy distinguishes
seven very specific customer focus groups:
Food and agri-corporates
Health care
Dutch corporates operating
internationally
International corporates
Financial institutions
International high net-worth
individuals
Rabobank organization
Arthur Arnold 'Enabling is the key word'.
remember, we all did - then you have to
implement it and accept the consequences.
That's what we're doing.'
BUSINESS BENCHMARKS
There has been some muttering in the
ranks about time consuming and even
large deals that didn't make it through the
credit committee at head office, and about
the concentration on F&A to the
detriment of other sectors. 'I don't
understand that,' Arnold says. 'We made
the choice for a customer focus strategy
and we have clearly defined the seven
customer target groups we are focusing
on. All of our people in the network can
continue to serve our customers, including
those who are not in the F&A or health
care sectors, if they meet the minimum
requirements laid down in the strategy.
You can do international corporates, in
fact they are a target group, provided you
meet the benchmark. And we actively
encourage that. What we don't encourage,
and what will not pass the credit
committee is a straight USD 500 million
loan to XYZ motor company at 25 basis
points. If you are clear on the customer
focus strategy, then you know that a deal
like that will never be approved.'
STRATEGIC SHAKE-UP
Arnold agrees that people may have
thought the customer focus strategy was
just another fashion, one of those
intermittent shake-ups that happen from
time to time in organizations. 'Fm sure
