ACT LOCAL
Of course, one of the main aims of the structure is to mitigate risk
and the matrix makes virtually everybody responsible for risk at
some level. Every manager is responsible for the risk inherent
in their business. They are, De Roo says, the fïrst line ofdefence.
Risk is an essential part of our business, so thinking about risk has
to become part of the bank's DNA. And if there are any doubts
about the risk involved in a transaction, this can be escalated to
the next level, whether that is to a country manager, the Risk
Control department or to the managing board itself. "And that
goes for every aspect of our business. If you don't like something,
teil someone or escalate it to the next level. Communication is
vital to the success of the new structure."
This brings De Roo to one of the greatest challenges of a
matrix led organisation: embedding it in the culture of the
organisation and effectively changing how people think and
behave. For instance, the matrix structure also assigns account-
ability for collaboration and cross-selling. So it is designed, in
effect, to increase business but unless people look beyond their
own business it won't work.The heads of Global Business Lines are
accountable for the execution of their business lines but manag
ers are accountable for cross-selling products in their country or re-
gion.This should createa push-pull effect. "Selling more products
and improving execution is good for everyone, including our
clients. But we all have to look beyond our own boundaries or
business lines and think about how we can increase cross-selling
and collaboration. We are in this together, for Rl as a whole, not
just for our part of the business."
Harry Clevis, Global Head of Human Resources at Rl, agrees that
there is little point in changing the entire structure of an organi
sation, if this is not accompanied by a change in behaviour. Rl
had, over the years, developed into a company with numerous
silos. That has changed a lot in recent years and co-operation has
become an inherent part of how the bank works; but real col
laboration is even more of a challengefor a co-operative bank like
Rabobank, with about 174 virtually autonomous member banks
and independently operating subsidiaries, like De Lage Landen.
"One of the biggest challenges is getting people to share their
clients. Corporate Finance may have a cliënt they could sell other
products to, but they may also be resistant because they see
none of this in their own financial results, or their bonuses. That's
whatwe are changing underthe new matrix system. People
now own their entire business, both in terms of targets and
rewards."
Rabobank Group's strategie objectives have now been trans-
lated into ambitions for Rabobank International, with these goals
incorporated into the Rl matrix structure. Accountability for
cross-selling is now directly built into the reporting and perform
ance management systems. And perhaps just as importantly into
the bonus assessment systems. So not only are people directly
accountable for the financial results of their businesses, they are
also rewarded on the basis of the overall results of their business.
Harry Clevis (left) and Harry the Roo.
Rl has set very clear financial targets for 2008 and beyond and
defined clear goals for the various parts of the business, inclu
ding cross-sales. Each part of the business now knows what it
has to do and they have defined their own SMART objectives
outlining how they plan to do it. HR has gone one step further
with a succession program designed to put the right people
in place to make the matrix structure work. 'These are people
willing to accept accountability and know how to think cross
border and cross-product line. These people will then cascade
the matrix concept down through the organisation in the years
to come."
Because, Clevis says, one sure way of making this work is for the
top people in the organisation to lead by example and that in-
cludes the management board itself. The aim is to increase clar-
ity and transparency across the organisation, setting clear goals
and making it very clear what Rl expects from its people, but
also making it very clear what employees can expect when they
meet their targets. "Getting the right people in place, people
who think about how they can contribute to Rl as a whole rather
thanjust their region or country and setan example, is half the
battle."
The matrix structure has to be more than a mere diagram. The
right kind of behaviour should evolve quite naturally from the
clear targets and clears lines of accountability. Luckily, Rl is a
pretty open organisation and people are used to dealing with dif
ferent business and social cultures and having a common goal
should make this process of change reasonably painless. This
is not going to happen overnight, as any change as dramatic as
this creates uncertainty. But we truly believe the certainty and
clarity of the matrix structure will help to make this work. After all,
we all own Rl now. That should make it a lot easier and a lot more
rewarding."
Z ISSUE 16 THE WORD
