Banking and Finance is a line of discipline just like Economics. In actual fact, Economics as a course is usually introduced to students much earlier than many other business subjects at Senior Secondary School level.
Expectedly, economics as an important social science course commands so much interest and understanding among students because the course is practical and not abstract. Most students like economics compare to other subjects. At the basic level, if you cannot secure a credit pass in any subject it shouldn’t be economics, because you will always found it interesting to read the subject except for some topics like elasticity theories of demand and supply.
Always, there are topics that you are sure of quick wins in the subject during examination. Some topics are just there that you don’t need to struggle to remember. Once you remember the factors, you develop them, you and your way to getting you nice result and the reason for this is the way the subject was uncovered to us at our elementary level.
As we get matured and gain deep insight in the study of economics from bachelor degree up to doctorate level, the practicality of that nice subject becomes a thing of concern to many of us.
The implementation of the theory that look real to us initially may soon become sort of magical, like the more you look the less you see in our economic managers’ hands.
Why is it difficult to manage an economy?
People routinely blame politics for outcomes they don’t like, often with good reason though: The entire economy is reeling under severe strain but we can see there is an element of silver lining here and there. One of such sector that is giving us some glimpse of hope is the banking sector in Ghana. We have seen the rate at which things are falling apart in the economy, if we can borrow the late Chuna Achebe’s best selling title “Things Fall Apart”. The free fall of Cedi against other international currencies, the uncontrollable double digit inflationary trend, unabated utility and pump price increases, huge public debt both domestic and foreign, huge arrears of unpaid statutory allocations etc just to mention but a few.
In all these the banking system is more than conqueror and they are smiling and wining when others are screeching and wailing through strike actions here and there or no pay no work labour actions. In one of my articles I titled ‘a tale of two people – the rich and the poor’. The story looks similar to what is happening between bankers in Ghana and the entire populace. While bankers who are a small fraction of the population are saying life is beautiful and this economy is good, like the rich will always say, majority of their customers and millions others are sweating like Christmas chicken who knows that in the next few hours some hot pepper, onion and oil will be having an important discussion on his head. Therefore the chicken is groaning under his feathers.
Why are banks doing well when the economy is groaning?
Tom Peters the co author of the bestselling book ‘In Search of Excellence’ wrote a book he titled ‘Thriving in Chaos’. I don’t know if our Ghanaian bankers read the book and apply the principles to their advantage or they capitalized on the naivety of the banking public or the weak regulations in the system that allow rooms for super profit or it is just the cheer smartness of the people in the leadership of these banks both the board and management teams that is responsible for their extraordinary achievements at the end of last financial year. Whatever the case may be, it is worthy commenting and commending the great performance of these people. Their collective performance has some resemblance to that of flawless German machine that destroyed the over rated Brazilian national football team at the just concluded World cup which they never recovered from before the end of the world cup fiesta.
Let’s look at the performance of the first 10 leading banks out of the 28 banks in the country and compare their cumulative result in 2013 with same period in 2012. The ranking here is based on their individual Total Assets from their year end audited accounts published in the dailies. Other banks in the sector also shown similar trend in their operational results.
Total Assets of the first ten leading banks in 2012 was Ghc18.01billion and Profit before tax was Ghc0.998billion approximately Ghc1billion
In 2013, with all the challenges in the economy and unfriendly nature of the business climate, the top ten banks Ghana pooled a Total Assets of Ghc24.6b and Profit before tax was Ghc1.7b. you will notice significant growth in the performance of these banks. In percentage terms, collectively, they recorded 36.6% growth when the entire economy dropped by about 6% of its growth projection. The profit before tax for these banks rose from Ghc1b to Ghc1.7b within that same period. A whopping 70% growth in one year in an economy everyone is screaming and gasping for air to survive. The overall economy performances suppose to be the barometer or gauge to measure the performance of sub sectors and major players in the economy. The story is different in the case of Ghanaian banks. They redefined the landscape by showing us that there can be an Isaac in every land of Philistine who will plant in the same year and reap hundredfold even in the face of biting economic hardship in the land.
What lessons can we learn from these banks’ operational performance that can be replicated or benchmarked by other sectors of the economy going forward?
Looking at the four reasons I noted above that may likely be the reason for the amazing achievements of these banks; I am assuming one of them that they applied the principles learnt from the book ‘Thriving on Chaos’. I am going to highlight some of these principles for the benefit of those that have not yet read the book or may not know how to apply such principles that makes one to turn misfortune to fortune or overcome major setbacks and turn it around to become a highflyer.
Lesson 1: There will always be external confusion in the business environment.
Banks in Ghana have learnt this important secret of doing business in a ‘hostile’ environment where they work. They are aware that things won’t ‘shake out’. Confusion, volatility and rapid change are constants today. They are part of the business landscape. The only constant thing in our world is change. They imbibed the quote that says “One day at a time–this is enough. Do not look back and grieve over the past for it is gone; and do not be troubled about the future, for it has not yet come. Live in the present, and make it so beautiful it will be worth remembering’’.
They constantly dance to the drumbeat of change. Thriving companies (banks) move to a rhythm of constant change. They don’t resist it. They seek it out, move with it and dance to it. They get excited like the eagle dance at the wave of ranging storm. They eat change for breakfast, they cook it for dinner and both management and employees look at change as survival.
Lesson 2: There are always new opportunities and changing times for those that are smart
Economic volatility is creating opportunities in every sector of the economy, for those that are smart enough, fast enough and flexible enough to see and seize them. There is constant improvement through the use of brainpower in encouraging every employee to contribute to a constant stream of small innovations.
They know the value of taking opportunities by using what they have to get what they need. This is well captured in the following quotation which says “Opportunity comes to those who have devoted time to improving themselves so when added responsibility, a new position, or opportunity knocks at their door they are prepared to take advantage of it. We judge ourselves by what we feel capable of doing while others judge us from what we have already done”. Now, we are talking about how these banks seize their moment and turn bad situation to a good one for their business.
Lesson 3: The rule of the game is, you have got to keep up. No room for let’s wait and see.
Organizations can no longer afford to “wait and see” about new ideas, markets and technologies. If there is any innovation in any part of the world that can change the way we do business, improve our turnaround time and get our customers better satisfaction, why not go for it, if we can afford it? Those who fall behind in adopting new technologies will find it impossible to catch up. This is their slogans.
They are aware that ‘’When you do nothing, you feel overwhelmed and powerless. But when you get involved, you feel the sense of hope and accomplishment that comes from knowing you are working to make things better.” This is another hidden secret of success which banks have discovered and applying to make them superstars.
Lesson 4: Keep up with change or you are gone. Change all the changeables
The pace of business is relentless and winning organisation are competing in time, reducing order, manufacturing and processing time by about 90% or more. If you are not moving in the direction where the wind is blowing, you may end up being swept aside by the ferocity of the wave of change.
The age of chaos is an unstructured age. Flexibility is the order of the day. If it is convincing enough let’s go for it. The winners have already flattened the pyramid. There is no more room for bureaucracy in the approval process of any winning company. The Berlin wall between management and employees has been lowered.
Knowledge becomes the real assets these banks are banking on to succeed. In the information economy, brains and information, not tangible resources like buildings or cars, are the organisational assets that matter. They know that clever people, making clever things or providing clever services, add value, sometimes lot of value and they can change the result of the game. They have schooled them to imbibe the statement credited to Og Mandino that says “Today, and every day, deliver more than you are getting paid to do. The victory of success will be half won when you learn the secret of putting out more than is expected in all that you do. Make yourself so valuable in your work that eventually you will become indispensable. Exercise your privilege to go the extra mile, and enjoy all the rewards you receive. You deserve them!”
Lesson 5: They know that you have to ’Get smart or else’ you are doomed
To sum it up, in the information age, what you carry in your head is your most vital asset. Everyone – from floor sweeper to computer programmer – is or will be what Peter Drucker calls a knowledge worker. That means training, education, new skills and information. It adds up to uninterrupted lifelong learning as the most important investment any person or any organization can make. For those who commit to this lifelong learning, the extraordinary change in the years ahead can become exceptional opportunities. Training and skill development of your key assets still remains the deal breaker in a volatile environment like we are in now. Knowledge is power and when it is correctly applied it becomes wisdom that commands prosperity.
Let me conclude by asking this thought provoking question. Is your organization committing growing amounts of time and money to lifelong learning? Are you? If not, then we must be weary of getting into what my bible described in Prov. 20:4 ‘’the sluggard who will not plow by reason of the cold; therefore shall he beg in harvest, and have nothing’’.
We must take useful lessons from the approach adopted by these banks and use them to achieve the unthinkable.