Leadership in Banking Presentation - Idris Yakubu

7/31/2019 Leadership in Banking Presentation - Idris Yakubu

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THE LEADERSHIP CHALLENGE IN THE

NIGERIAN BANKING INDUSTRY

IDRIS YAKUBU

REGIONAL MANAGER - NORTH

FIDELITY BANK PLC

JOS NIGERIA

JUNE 3rd, 2010


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PRESENTATION OUTLINE

Issues in the Macroeconomic Environment

Economic Growth Vs Foreign Investments

Leadership Vs Management

The Nigerian Banking Industry - pre & post 2009 Key Challenges affecting Bank Leaders today

The New Industry Leader

IBMs CEO Search Criteria

Famous Quotes on Leadership

Closing


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ISSUES IN THE MACRO ECONOMIC ENVIRONMENT

Tough/Stagnant Economy Unstable Political environment

Frequent changes in Government Policies

Public Sector Reforms

Governments Anti - Corruption posture

Social Unrest - Niger Delta, Religious Crisis, MOSOP, etc

Political uncertainty - build up to 2010 Elections


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ECONOMIC GROWTH VS FOREIGN INVESTMENTS

Transformation in the Nigerian political structure (Military to civil rule) has reshaped thefundamentals of the economy to create new opportunities and challenges.

Successive governments (since 1999) aware of the investment benefits democracy representshave seized on the goodwill to create a platform for flow of foreign investment.

Investment flows have been helped by core reform programs such as privatisation,liberalisation, banking sector consolidation program, anti-corruption crusade, debt reliefprogram etc

Economic Growth has been substantially spurred by rise in non-oil investments particularly inkey areas like telecommunications, hospitality and financial services

As investment flows improve, government (holding the highest stakes) in the economy hassubstantially reduced its presence in many sectors including financial services


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LEADERSHIP

Influence, the art or process of influencing people so thatthey will strive willingly and enthusiastically toward theachievement of group goals.

- Koontz & Weihrich

People should be encouraged to work with zeal andconfidence. Zeal is ardor, earnestness and intensity inthe execution of work; confidence reflects experienceand technical ability.


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LEADERSHIP

The capacity to create a compelling vision, translateit into action and sustain it.

The art of influencing others to their maximum

performance in order to achieve the desired goal.

A Leader is a Dealer in hope.

- Allan Leighton


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LEADERSHIP

Leaders act to help a group attain objectives

through the maximum application of it

capabilities. They do not stand behind a group t

push and produce; they place themselves beforthe group to facilitate progress. They inspir

organizational goals achievements e.g, the Leade

of an Orchestra.


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LEADERSHIP

Effective Leaders guide & facilitate the work toaccomplish tasks & objectives while at the same

time maintaining cooperative relationships and

teamwork.

- Yukl, Gordon & Taber, 2002


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4 INGREDIENTS OF LEADERSHIP

- Power

- Fundamental understanding of people

- Rare ability to inspire followers to apply self

fully to a project/task

- Style of the Leader and the climate

(environment) he/she develops


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LEADERSHIP STYLES

- Autocratic Leadership- Democratic/Participative Leadership

- Free Reign Leadership


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QUALITIES OF A GOOD LEADER

Leaders are Strategic thinkers: they plan ahead andanticipate difficulties.

They quickly spot inefficiencies and re-organize

people to make improvements.

To effectively perform these functions, a Leader

must possess the following qualities:


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QUALITIES OF A GOOD LEADER ........Continued

TECHNICAL COMPETENCE: Business literacy and mastery of onesfield.

CONCEPTUAL SKILLS: a facility for abstract or strategic thinking.

TRACK RECORD: a history of achieving results.

PEOPLE SKILLS: an ability to Communicate, Motivate and Delegate. A

Leader without Followers is just taking a walk.


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QUALITIES OF A GOOD LEADER ........Continued

TASTE: An ability to identify & cultivate Talents within yourTeam

JUDGEMENT: making difficult decisions in short timeframes

with limited Data. Avoid buck passing; take responsibility

CHARACTER: This is the Quality that defines who we are. Itis framed by drive, competence and integrity (moral

compass).

Character is the mother/key to Leadership.


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KEY LEADERSHIP TERMINOLOGIES

- Power Visionary- Motivation Influence

- Charisma Mentorship

- Expertise Entrepreneurship

- Empowerment Will Power

- Delegation Servant Leadership

- Going the Extra mile Humility

- Effective Communication Followership


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MANAGEMENT

The process of designing and maintaining anenvironment in which individuals, working together

in Groups, accomplish efficiently selected aims.

Koontz & Weirich

Getting things done through the instrumentality of

others.

Focuses on the bottom line; how can I best

accomplish certain things?


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MANAGEMENT VS LEADERSHIP

Management Leadership1. Plans Visionary

2. Organizes Empowers

3. Delegates Involvement4. Controls Passion

5. Procedural Commitment

Inspirational


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MANAGEMENT VS LEADERSHIP (Contd)

MANAGEMENT

Transactional

Keeping the system going in thesame direction.

The Manager does things right.

LEADERSHIP

Transformational

Doing things that change thesystem.

The Leader does the right

things.


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THE BOSS VS THE LEADER

The Boss The Leader

1. Drives his men Coaches his men

2. Depends on Authority Depends on goodwill

3. Inspires Fear Inspires Enthusiasm

4. Says I Says We5. Fixes the blame for Fixes the breakdow

breakdown

6. Knows how to do it Shows how to do it

7. Says Go Says Lets Go


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EXPECTATIONS OF THE FOLLOWERS

Team members look up to the Leader to provide the following: FOCUS/PURPOSE: effective leaders bring passion, significance to the process of

defining organizational purpose.

GENERATING & SUSTAINING TRUST; trust is the emotional glue

that can bond people to an organization.

In building trust, the Leader must deliver competence, consistency,caring, candor and congruity at the work place.

FOSTERING HOPE: a Leader anticipates positive outcomes he

believes that things will work out well.

GETTING RESULTS: Leaders will provide meaning, build trust and foster hope; but all of

that counts for little unless Results are produced.


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THE LEADERS MOOD

The Leaders Mood drives performance!!! TheLeaders Mood & behaviours drive the Moods &

behaviour of everyone else. A cranky

and ruthless Boss creates a toxic organisation filled

with negative under achievers who ignore

opportunities

- Goleman, Boyatis & Mckee

Primal Leadership


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THE BANKING INDUSTRY PRIOR TO SOLUDO

The period 2004/2005 was a watershed era with the appointment of ChukwumaSoludo as CBN Governor.

Soludo introduced an industry-wide consolidation programme which required banksto raise their capital base (shareholders funds) from a minimum of N2billion toN25billion

The exercise recorded mass corporate actions of unprecedented scale involvingstrings of capital raising exercises, mergers, acquisitions and take-overs

Consequently, the Nos of Players sector shrank from 89 to 25 in separatemerger/acquisition processes while 13 banks were liquidated.


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..and the Bubble Burst

The new capital threshold created an industry of players of equal sizes as opposed to the era of the super powers (the

then Big 4) and the Floor members (the rest)

This heralded a new regime of Competition with banks struggling for every available space on the performance tableeven in areas that are not in line with their founding vision

and then the bandwagon began (Capital raising, product offering, branch network, E-business, international expansion,subsidiary developments)

Between 2004 and 2007, banks raised over N2.5 trillion in capital with over 35 appearances

Naturally, these developments created pressure points along the Income lines as banks became desperate to service thenew legion of stakeholders and investors

This provided the anchor for the Liquidity bubble and urgent search for investment outlets as income expansion becamean imperative

..and the Stock and Property markets became the unfortunate victims.


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CRITICAL ISSUES AFFECTING THE LEADERSHIP OF

BANKS

As the sector expanded, structural weaknesses began to emerge in such areas as:

Blindfolded competition premised on ego and personality contests

Quest for short-term profitability even at the expense of long-term results Asset/Liability Mismatch

Rise in speculation, rent taking and arbitrage business

Absence of clear-cut and functional management plan

Failure of Corporate Governance Insider Abuse and unhealthy use of privileges

Regulatory Circumvention and application of street-wise practice models

Defiance of sound risk management principles in asset creation


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CRITICAL ISSUES AFFECTING THE LEADERSHIP OF

BANKS(Contd)

Skill gap and human capacity challenge motivated by poor understanding of thepeculiar nature of the Nigerian business environment and the needs of the customer

Absence of enabling allied institutional support to accommodate the growing profile ofthe sector.

Lack of effective technological support to detect effective deployment of bankingsolutions across different product and market spectra.

Resource Management:

Availability Vs Allocation

Strategic Management Vs Change Management

Performance Management:

Motivation & Rewards


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ISSUES THAT AFFECTED THE BANKING INDUSTRY PRE 2009

Absence of Effective regulatory framework & structure todetect infractions

Corporate Governance/Insider Abuses

Poor Risk management practices

Short term focus & approach in Business development Skill gaps in Project/Development Financing

Recent Changes Global Financial Crisis, Niger Delta issues,Declining Government Revenues, etc.


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.And what have been the Effects?

Confidence crisis which was last noticeable in the early 2000 has returned. Many depositors,

particularly offshore institutions, are presently cautious of placing their funds in Nigerianbanks and accepting their Guarantees in view of the present crisis

The Credit market has virtually become Comatose while the Economy groans under the yokeof debilitating capital

High incidence of Non-performing loans and massive diminution in Asset base

Falling return on investment as demonstrated by declining share price, dissipating dividendsand bonus issues

Industry-wide capital stress

Increased Job Losses

h f h ki d h


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The Present state of the Banking Industry..the

Sanusi Era

Following the expiration of the tenure of Professor Charles Soludo, the Federal Government

appointed Sanusi Lamido Sanusi, the then Managing Director of First Bank of Nigeria Plc, asCBN Governor

The new CBN leadership in an industry wide audit exercise, in two separate reports,pronounced 10 banks as being in grave conditions and urgently in need of capital injection

Consequently the CEOs of eight of the banks were removed by the apex bank while a total of

N620 billion was injected into the banks to relieve them of their precarious liquidityconditions

The dire liquidity status of the banks, according to the CBN report, was essentially motivatedby huge exposure to of the banks to the capital market and petroleum marketing sectors

Th P f h B ki I d h


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The Present state of the Banking Industry..the

Sanusi Era (Contd)

The liquidity challenge has begun to show up in the balance sheets of the banks as recent published

results reflect huge provisionings arising from Non-performing loans (NPLs)

The development has compelled a Fresh round of Capital raising exercises as banks attempt tobridge the shortfall in their asset positions through new offerings for tier 2 capital. As at the time ofthis report, banks have announced plans to raise N2.7 trillion.

The Regulator in its response has also announced its plans to rework the entire gamut ofsupervisory framework in the industry. Under the new arrangement, the CBN will focus onCorporate Governance, Enterprise Risk Management as well as Liquidity/capital adequacy.

The Apex bank has also indicated plans to dump the Universal Banking model for a New system thatwill allow banks operate either as a Holding company or a Single purpose Commercial bank.


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Defining Features of the Present Era

Regulations have become tighter

Disclosure requirements have become stringent

Profits have become smaller

Capital has become scarcer

International alliances have become fewer


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The NEW LEADER.

will be defined by the Ability

To manage Cost

To operate outside the Bandwagon & Think outside the box

To see beyond the Immediate & Execute Strategies

To match the Facts with the Figures & Demonstrate Success

To build Sustainable alliances

To Take advantage of Opportunities & Mitigate the Risks

To take the Hard decisions


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IBMS CEO SEARCH SELECTION CRITERIA

- Creative Visionary

- Inspire and Motivates the Executive Teams

- A Strategic thinker

- Customer Orientation

- Immediate Credibility

- Record of Success as a Chief Executive

- International Experience (Exposure)

- High technological experience


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Selection Criteria

- Analytical Ability- Makes it happen

- Infallible


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FAMOUS QUOTES ON LEADERSHIP

Management is doing things right; Leadership is doing the right things.

Peter F. Drucker

Dont tell people how to do things; tell them what to do and let themsurprise you with their results.

George S. Patton

Leadership is the art of getting someone else to do something youwant done because he wants to do it.

Dwight Eisenhower



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............Continued

A Leader should have the ability to inspire, get into theTrenches and show How it is done.Jonathan Feuer, CVC

The very essence of Leadership is that you have a vision. You

can blow an uncertain trumpet.Theodore M. Hesburgh

Delegating work works, provided the one delegating workstoo. Robert Half



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............Continued

Only One man in a Thousand is a Leader of menthe other 999 follow women.

Groucho Marx

The Best Executive is the one who has sense enoughto pick Good men to do what he wants done and selfrestraint to keep from meddling with them whilethey do it.

Theodore Roosevelt


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OTHER QUOTES

The Person who gets ahead is the one who does more than i

necessary and keeps on doing it.

- Richard Denny

The Winners in life think constantly in terms of I can, I will and I am

Losers on the other hand concentrate their waking thoughts on

what they should have done or what they dont do.- Dennis Waitley

There is No Substitute for Hard Work. Do not talk about it, Do it

- Gerald Ronson


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THANK YOU

Leadership in Banking Presentation - Idris Yakubu

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