Constructive criticism
Shadow Group
identifying vicious circles
A group of five young Rabobankers, undercover as the Shadow Group, were invited by our
executive board to analyze the entire Rabobank Group's policies, with the intention of
providing a fresh and objective view of the entire Group's strategies. The Shadow Group -
selected from a variety of Rabobank functions - was given free reign to investigate and
come up with an unbiased blueprint, exposing not only the organization's strengths, but
also our weaknesses. Here's the essence of what they uncovered.
Spotting opportunities
Vicious circle
Identifying traps
Understandingdynamics
What'sNewS Issue 2 February 7 999
Eiso Bos and Mare Cootjans
from Rabobank Nederland
(RN), Tanja Cuppen from
Rabobank International (RI),
Marcel Geurts, then Rabofacet,
now with RI's APFT, and
Kathleen Goense from de Lage
Landen (DLL) make up the so-
called Shadow Group. Last
year, the executive board
brought thern all together with
the difhcult assignment of
analyzing the strategie
challenges facing the Rabobank
Group over the next five years.
'Our task,' says Geurts, 'was to
be as objective as possible. The
executive board feit they
needed new input and ideas, a
breath of fresh air, if you like.
We're all young and relatively
new to the organization, it was
therefore feit that we could
expose things perhaps not
otherwise accessible to top
management.'
The newly-founded Shadow
Group was given three rnonths.
They began by conducting a
thorough series of interviews
involving all aspects of the
Rabobank Group. On the plus
side, it took no time for the
team to discover that
Rabobank is generally quick to
spot opportunities. Another
advantage they discovered is
that being a large organization,
strategies are open to
interpretation, often resulting
in generating positive energy.
The example that sprung to
mind was the Allfinanz
strategy. 'Local banks had
already taken the initiative to
act as insurance brokers,' says
Geurts. 'Following their
success, the Allfinanz strategy
then became official.'
But, while being flexible and
identifying opportunities early
on is clearly one of our
strengths, a bottleneck often
occurred when it came to
realizing our goals. 'Sure, a
strategie plan is made,' says
Cuppen, 'but it is often not
fully realized or followed
goals.' This leads to what the
Shadow Group described as
'vicious circles'. For strategie
plans to be effective, these
traps must be stepped out of.
The Shadow Group came up
with a way of outlining these
system traps. One example was
teamwork - because in many
areas cooperation is vital to
delivering integrated financial
solutions. The Group came up
DERIVC STATUS FROM
OWN BALANCE SHEET,
PROEIT AND LOSS
ACCOUNT, NUM8EA OE
EMPIOTEES, ETC.
REOUIREMENT TO BE SELF-SUPPORTING
LESS DEPENDENCE ON «NOTHER'S PERFORMANCE
teamworking/cooperation
KNOWING EACH
OTHER'S AREAS
OE COMPETENCE
KEEP ACTIVITIES
WITHIN OWN GROUP,
SRANCH, DEPARTMENT,
SUBSIDt ARY
MUTUAL RESPECT
through.' The Shadow Group
feit that improving the
Rabobank Group's ability to
realize its goals and objectives
is the biggest strategie
challenge we face. 'It seems we
often expect that just because
something is part of a strategie
plan, it will automatically
happen,' continues Cuppen.
'But this linear relationship
doesn't exist. The organization
should be seen as a dynamic
system - with people, branches,
departments, subsidiaries and
board members continuously
reacting on each others actions
to realize their own
interpretation erf strategie
with three vicious circles (see
above). Firstly, due to our
structure and culture, all
departments and subsidiaries
are autonomous, and are
currently profit-driven. 'A
branch's status, for example, is
directly derived from their
profit contribution, giving say
London priority over Paris,'
says Cuppen, 'meaning
departments or branches
become principally driven by
their own achievements, taking
away the incentive to work
together outside their own
branch, departtnetit or product
group. Short term, separate
profits and losses grow, giving
the department or branch tnore
status, thereby starting the
circle all over again. We feel the
effect of this trap would be
diminished by taking the
emphasis off profit appraisal
and on cross-fertilization.
Assessment could be based
instead on, for example, how
many products were
constructed in cooperation
with the network, rather than
their own profit contribution.
Even more effective, but very gt
difficult to influence, is the
informal way of judging each
other's performance.'
Next to teamworking, several
other strategieally important
processes within the Rabobank
Group were analyzed. But the
Shadow Group's general
conclusion was that future
strategie plans should not only
pay attention to banking
strategies alone, but should
also explicitly involve the
particular dynamics of realizing
the strategy. 'We need
cooperation to realize our
strategie goals,' concludes
Geurts. 'And that doesn't onlv^j
mean saying "let's cooperate".™
We should work on this
weakness and put in place
specific strategie conditions to
ensure that cooperation can
and will evolve.' In fact, all the
Shadow Group agree, any
future strategie plans should
not be accepted unless explicit
attention is paid to the
conditions under which they
can be realized. To complete
the picture, Wouter Kolff,
member of the RI managing
board, commented on the
Group's findings. 'Execution of
strategie goals and weak
networking should be improv-
ed and tackled. We can do this
on one hand by stressing
accountability and on the other
by delivering internal services.
The latter should be part of the
individual perfortning criteria.'
