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Beyond Budgeting Round Table (BBRT). Konserndirektør Sigurd Aune holdt en presentasjon i London om SpareBank 1 Gruppen og Beyond Budgeting. The SpareBank 1 group’s road to a new corporate governance based on the principles of Beyond Budgeting.
Citation preview
TekstDynamicManagement
Rollingforecasts
Culture andorganization
Benchmarkingand scorecards
Bonus andincentives
Dynamic ManagementThe SpareBank 1 group’s road to a new corporate governance based on the principles of Beyond Budgeting
Sigurd Aune, CFO
BBRT, London29 April 2009
2
Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
3
SpareBank 1 Gruppen AS – the structure
SpareBank 1 Gruppen AS
Focus areas– Brand– Technology– Competence– Common processes and use of best practices– Purchasing
Regional competence centers– Payment services: Trondheim– Credit: Stavanger– Training: Tromsø
SpareBank 1SR-Bank (19,89 %)
SpareBank 1SMN
(19,89 %)
SpareBank 1Nord-Norge (19,89 %)
SparebankenHedmark (11,14%)
SamarbeidendeSparebanker (19,89 %)
LO(9,29%)
Alliance Co-operation Programme
SpareBank 1 Oslo
(100%)
SpareBank 1Skadeforsikring
(100%)
SpareBank 1Livsforsikring
(100%)
ODIN Forvaltning
(100%)
Actor Fordrings-forvaltning
(100%)
Argo Securities
(75%)
SpareBank 1 LTO
(100%)
SpareBank 1 Factoring(100%)
Verdigjenvinning(100%)
First Securities(24,5%)
SpareBank 1 Boligkreditt
EiendomsMegler 1
BNbank
(Bank owned activities)
SpareBank 1 Gruppen Finans
Holding AS(100%)
SpareBank 1Medlemskort
(100%)
4
The SpareBank 1 Alliance
The SpareBank 1 Alliance, key figures (31.12.08)
- 20 independent savings banks - Including 7 exchange listed primary capital
certificate banks- Co-ownership of two commercial banks (BNbank and
Bank 1 Oslo)
– Total assets: ca NOK 583 billion (incl. BNbank)
– 352 branches across Norway
– 378 distribution offices
– Total no. of employees: ca 6,300
– Internet customers: ca 530,000
SpareBank 1-banks:SpareBank 1 Nord-Norge, SpareBank 1 SMN, SpareBank 1 SR-Bank, Sparebanken Hedmark, SpareBank 1 Ringerike, Rygge-Vaaler Sparebank, SpareBank 1 Hallingdal, SpareBank 1 Buskerud-Vestfold, SpareBank 1 Gran, SpareBank 1 Gudbrandsdal, SpareBank 1 JevnakerLunner, SpareBank 1 Nordvest, Halden SpareBank 1, Sparebanken Telemark, Modum SpareBank 1, SpareBank 1 Lom og Skjåk, SpareBank 1 Nøtterøy og Tønsberg, SpareBank 1 Volda Ørsta, SpareBank 1 Hardanger, SpareBank 1 Kvinnherad, Bank 1 Oslo and BNbank.
Product companies in SpareBank 1 Gruppen AS:SpareBank 1 Livsforsikring, SpareBank 1 Skadeforsikring, ODIN Forvaltning, Argo Securities (75%), First Securities (24,5 %), SpareBank 1 Gruppen Finans Holding – a holding company for a subgroup consisting of SpareBank 1 Factoring, Actor Fordringsforvaltning, SpareBank 1 LTO and Verdigjenvinning.
Other enterprises owned by the SpareBank 1-banks: SpareBank 1 Boligkreditt, BNbank and EiendomsMegler 1.
5
The SpareBank 1 Alliance has a strong position in Norway2008
2,30
2,00
0,850,75
0,55
0,210,10
0,00
0,50
1,00
1,50
2,00
2,50
DnB NOR SpareBank 1 Storebrand Terra-Grp. Nordea N. Danske/Fokus HandelsbankenN.
Mill
ion
352
210189
125
5542
26
0
50
100
150
200
250
300
350
400
SpareBank 1 DnB NOR Terra-Grp. Nordea N. Danske/Fokus Storebrand HandelsbankenN.
Number of branches *
Total assets (NOK billion)Market shares
16,4 %15,4 % 15,4 %
17,4 % 17,5 %
19,1 %
12,2 % 12,0 % 11,7 %12,6 % 12,3 %
14,6 %
10,2 % 9,8 % 9,9 % 10,0 % 10,0 % 9,8 %
15,9 %
13,8 %
17,3 %
19,4 %20,3 %
12,8 %
0,0 %
5,0 %
10,0 %
15,0 %
20,0 %
25,0 %
2002 2004 2005 2006 2007 2008
Loans - retail market Loans - corporate market P&C insurance ODIN mutual funds
Retail market – Number of customers *
1832
583 549
382
198 190 172
0
200
400
600
800
1000
1200
1400
1600
1800
DnB NOR SpareBank 1 Nordea N. Storebrand Fokus Bank *** Terra-Grp.** HandelsbankenN.***
NO
K b
n.
* Numbers as of 2007** Numbers as of 3Q 2008*** Estimate based on average lending growthSources: Accounting reports, Statistics Norway (SSB), Norwegian Financial Services Association (FNH), Norwegian Mutual Fund Association (VFF).
6
The SpareBank 1 AllianceStrategic Platform
• Maximizing shareholder value and value created for the market regions covered by the banks by maintaining a regional structure of independent banks – through:
Purp
ose
Cor
ners
tone
s
Efficiency Local Market Focus
• As a group, the banks seek to increase their efficiency as compared to competitors by:
- Economies of scale- Mutually increasing critical core
competencies- Sharing development investments
• Each bank continues to maintain its link with its local community by:
- Keeping its own name and legal identity
- Taking advantage of its proximity to the local market
ALLIANCE PROGRAMME SEPARATE LEGAL IDENTITIESCOMMON SUPERBRAND
7
Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
8
Change starts at the top of the organization
• Eldar Mathisen was hired as new CEO starting June 2007
• He was acquainted with many of the Beyond Budgeting principles from his experience at Sandsvær Sparebank
• Group economy invited external speakers to top management meetings; including Lennart Francke, Jan Bergstrand and Bjarte Bogsnes
• Top management developed interest in the Beyond Budgeting principles
9
Analyzing the current situation- Project launched by top management
0
200
400
600
800
1000
1200
Feb.05
Apr.05
Jun.05
Aug.05Oct.
05Dec.0
5Mar.
06May
.06Ju
l.06
Sep.06
Nov.06Feb
.07Apr.0
7Ju
n.07Aug.07Oct.
07Dec.0
7
MN
OK
Budget Pre-tax profit
• The trend had already been discovered – the budget was outdated by February
• The project’s main purpose was to investigate a more dynamic model for corporate governance
• It was important to see how decisions could be made closer to the customers
• How could we as an organization be more ambitious?
10
Main conclusion
BONUS(incentive)
GOAL(desired future)
FORECAST(unbiased)
RESOURCE ALLOCATION
(best use offunds available)
• Universal tools, like the budget, will never quite cover the intended purposes satisfactory
Budget
11
Convincing the board of directors- “By separating processes you’re letting go of illusive control and gain actual control and flexibility”
”Traditional”budget/plan
Step 1 - Separate Step 2 - Improve
Goal• Front-loaded
• Ambitious
• Relative if possible
•Goal
•Forecast
•Resource allocation
Forecast
• Action-based
• Expected outcome – early warning
• Both financial & non-financial
• Limited detail
Resource allocation
• No pre-allocation
• Projects - decision gates & criteria
• Operations - relative KPIs etc.
• Monitoring - intervention if needed only”Same number –conflicting purposes” ”Different numbers”
12
Informing the organizationImplementing Dynamic Management is a big step and it will take time
• Video presentation to be able to reach all employees
• Use of social media to allow feedback from the organization
• The most important message we have communicated is:
“Continue to do what you’ve always doneuntil you’re being told otherwise”
13
Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
TekstDynamicManagement
RollingforecastsCulture and
organization
Benchmarkingand scorecards
Bonus andincentives
Rolling forecastsBrutally honest
15
The budget column has not been replaced by rolling forecasts
Change Year To Change ChangeFebruary from last Date from YTD Rolling from last
Figures in MNOK 2009 month 2009 2008 12 months 12 monthsSpareBank 1 Livsforsikring Additional provisions recognised as income in consolidated accounts ODIN Forvaltning SpareBank 1 Skadeforsikring Bank 1 Oslo EiendomsMegler 1SpareBank 1 Medlemskort Argo Securities SpareBank 1 Gruppen Finans Holding Correction subsidiaries - pro forma IFRSNet result before tax from subsidiariesTotal operating costs holdingNet investment charges holdingGains from sale of companies holdingShare of associated companyAmortisationPre-tax resultTaxesNet result for the periodMajority interestMinority interest
16
Rolling forecasts – process
• Rolling 12 months forecast each quarter
• Due to owners that still operate with a budget, the forecast made in October is 15 months
Jan Apr Jul Oct Jan
17
A one way process
3
2
1
• Quick build-up – bottom-up
• No immediate time to change, feedback, revision nor negotiation
• The manager is responsible for the forecast when it is sent up one level
• Forecasts should be built on information already available
18
How should we follow up on a forecast?
Q22009
Q32009
Q42009
Q12010Q2 2009
Q12009
Q22009
Q32009
Q42009Q1 2009 ∑ 12
months
∑ 12months
• The forecast created in Q2 2009 should be compared with the forecast created in Q1 2009
• Why did the forecast change?– Why is the result different than what we predicted last quarter?– Have any of the assumptions changed?– What actions can we take – if any?
19
Action plans
1. Does the forecast indicate that we will not reach our long-term goals?
2. Analyze – can or should we take action?
3. If so – what kind of action should we take?
3a. Strategic decisions 3b. Continuous improvement
– Meet new competition– Diversification– Changes in company portfolio– Organization structure– Etc.
– Reducing department costs– Efficiency improvements– Innovation– Etc.
TekstDynamicManagement
Rollingforecasts
Culture andorganization
Benchmarkingand scorecards
Bonus andincentives
Benchmarkingand scorecardsDaring to be ambitious
21
League tables
• How many football teams have a budget for the number of goals they will score in a given season?
• What action does a team falling behind take?
• How can you advance on the table next year?
• A league table with competitors that are comparable will tell you about your company’s real performance
F A GD Pts
Man Utd 61 - 23 38 77
Liverpool 66 - 26 40 74
Chelsea 56 - 20 36 71
Arsenal 60 - 32 28 65
Aston Villa 50 - 44 6 55
Everton 48 - 36 12 53
Fulham 34 - 28 6 47
West Ham Utd 38 - 38 0 45
Manchester City 53 - 45 8 44
Tottenham 41 - 41 0 44
Wigan Athletic 31 - 38 -7 41
Stoke City 33 - 49 -16 39
Bolton 40 - 51 -11 38
Portshouth 35 - 50 -15 37
Blackburn 37 - 55 -18 37
Sunderland 31 - 46 -15 35
Hull City 37 - 59 -22 34
Middlesbrough 25 - 49 -24 31
Newcastle 37 - 53 -16 30
WBA 33 - 63 -30 28
22
Reaching your long-term goal
TARGET
Q1 • If your long-term goal is to win your league, your short-term target is to score more goals than your opponent
• There are a number of ways to reach your short-term target
• It is therefore crucial to be able to make new plans when changes occur
23
Reaching your long-term goal
TARGET
Q4 • If your long-term goal is to win your league, your short-term target is to score more goals than your opponent
• There are a number of ways to reach your short-term target
• It is therefore crucial to be able to make new plans when changes occur
24
From plenty of goals, targets and activities to few and ambitious goals
Kunden opplever trygghet, nærhet og en enklere hverdag.
Nær og dyktig
Må følges opp√ OK
Må handles/besluttes
1. Vekst i balanse
3. God avkastning på
risikojustert kapital (RORAC)
4. Redusert kostnadsprosent
12. Profesjonell rådgivning
10. Vi snakker samme språk
13. Tar relevante initiativ
8. Tilgjengelighet i
alle kanaler
7. Til å stole på
9. Lokal engasjert
støttespiller
17. Vi har beste prosesser
18. God samhandling mellom enhetene
26. Engasjerte og læringsvillige medarbeidere
21. Yter det ”lille ekstra” 25. Lederne er
gode forbilder 22. Tar ansvar for helheten
2. Vekst i andre inntekter
11. Engasjert og interessert i kundens
behov
14. Økt kundeaktivitet
15. Flere medarbeidere i
salgsrettet arbeid
16. Bedre innsikt i kundelønnsomhet
5. Flere kunder(nye + beholde)
6. Selge mer til hver kunde
20. Tydelige krav til
rådgivere og ledere
19. Frigjort tid til kundearbeid
23. Økt kundeorientering i støtte og linje
24. Mer kremmerånd/salgs
kultur
"Vi ser ikke skogen for bare trær"
“You can't see the forest for the trees”
25
Breaking down a long-term goal
The most successful bank
Greatest improvement in
cost/income ratio
Return on equity close to average
Largest growth in loans and deposits
2004 2005 2006 2007 SnittBank 1 Oslo 7,7 15,3 16,8 8,0 11,9Hedmark 9,6 10,3 8,9 9,3 9,5Møre 11,8 13,8 13,5 15,3 13,6Sør 12,2 12,2 10,8 11,0 11,6Øst 17,2 24,7 7,0 13,2 15,5Pluss 10,5 11,4 13,1 12,0 11,7Sogn & Fj. 11,5 11,3 11,2 12,8 11,7Vestfold 12,1 14,2 12,6 11,1 12,5Sandsvær 13,6 15,8 10,5 10,4 12,6Snitt 12,3 14,2 10,9 11,9
SR-bank 19,5 25,5 22,6 16,1 20,9Midt-Norge 18,8 22,9 23,6 15,8 20,3Nord-Norge 14,8 20,2 22,8 14,6 18,1
2004 2005 2006 2007 SnittBank 1 Oslo 68,9 74,5 59,9 73,4 69,2Hedmark 52,2 49 54,3 56 52,9Møre 47 50,4 51,3 48,3 49,3Sør 53,3 53,2 54,7 51,6 53,2Øst 46,6 57,1 67,8 50,8 55,6Pluss 46 43,3 39,3 39,7 42,1Sogn & Fj. 52,9 56,1 56,5 50,1 53,9Vestfold 54,1 53,5 55,8 55,2 54,7Sandsvær 55,2 54,7 52,2 53,2 53,8Snitt 52,9 54,6 54,6 53,1
SR-bank 47,8 45,7 49,9 53 49,1Midt-Norge 48,5 50,1 49,7 52,2 50,1Nord-Norge 52,9 51,6 49,2 55,2 52,2
2004 2005 2006 2007 SnittBank 1 Oslo 0 14,4 13,6 18 11,5Hedmark 10,1 14,1 13,9 7,9 11,5Møre 5,4 10,5 14,8 13,9 11,2Sør 10,1 12,4 16,8 17 14,1Øst 4,7 8,9 16,3 10,9 10,2Pluss 16,7 17,4 17,6 16,7 17,1Sogn & Fj. 9,4 11,7 15,1 25,8 15,5Vestfold 17,7 13,9 11,4 11,3 13,6Sandsvær 7,2 28,2 16,7 1,7 13,5Snitt 9,0 14,6 15,1 13,7
SR-bank 11,8 13,7 25,4 13,4 16,1Midt-Norge 5,3 33,4 16,8 11,4 16,7Nord-Norge 3,3 9,9 11 8 8,1
League table League table League table
GOAL
TARGET
CHECK
TekstDynamicManagement
Rollingforecasts
Culture andorganization
Benchmarkingand scorecardsBonus and
incentives
Bonus and incentivesLinked to ambitious goals and league tables
27
New bonus and incentive program- Fixed maximum amount to all employees
Group level: Maximum
• Profit sharing• Based on a certain return on equity NOK 16,000
Company level:
• Relative performance• Position in league of ambitious goals NOK 34,000
Maximum amount NOK 50,000
28
Relative performance:Avoiding negotiation of short-term fixed targets and dysfunctional behavior to meet the numbers
• Bonus is dependent on relative performance in league tables
• The league tables are connected to the long-term goals to avoid short-term focus
• The target connected to the ambitious goal may change if necessary in order to be the most successful bank
GOAL
TARGET
CHECK
The most successful bank
Greatest improvement in
cost/income ratio
Return on equity close to average
Largest growth in loans and deposits
2004 2005 2006 2007 SnittBank 1 Oslo 7,7 15,3 16,8 8,0 11,9Hedmark 9,6 10,3 8,9 9,3 9,5Møre 11,8 13,8 13,5 15,3 13,6Sør 12,2 12,2 10,8 11,0 11,6Øst 17,2 24,7 7,0 13,2 15,5Pluss 10,5 11,4 13,1 12,0 11,7Sogn & Fj. 11,5 11,3 11,2 12,8 11,7Vestfold 12,1 14,2 12,6 11,1 12,5Sandsvær 13,6 15,8 10,5 10,4 12,6Snitt 12,3 14,2 10,9 11,9
SR-bank 19,5 25,5 22,6 16,1 20,9Midt-Norge 18,8 22,9 23,6 15,8 20,3Nord-Norge 14,8 20,2 22,8 14,6 18,1
2004 2005 2006 2007 SnittBank 1 Oslo 68,9 74,5 59,9 73,4 69,2Hedmark 52,2 49 54,3 56 52,9Møre 47 50,4 51,3 48,3 49,3Sør 53,3 53,2 54,7 51,6 53,2Øst 46,6 57,1 67,8 50,8 55,6Pluss 46 43,3 39,3 39,7 42,1Sogn & Fj. 52,9 56,1 56,5 50,1 53,9Vestfold 54,1 53,5 55,8 55,2 54,7Sandsvær 55,2 54,7 52,2 53,2 53,8Snitt 52,9 54,6 54,6 53,1
SR-bank 47,8 45,7 49,9 53 49,1Midt-Norge 48,5 50,1 49,7 52,2 50,1Nord-Norge 52,9 51,6 49,2 55,2 52,2
2004 2005 2006 2007 SnittBank 1 Oslo 0 14,4 13,6 18 11,5Hedmark 10,1 14,1 13,9 7,9 11,5Møre 5,4 10,5 14,8 13,9 11,2Sør 10,1 12,4 16,8 17 14,1Øst 4,7 8,9 16,3 10,9 10,2Pluss 16,7 17,4 17,6 16,7 17,1Sogn & Fj. 9,4 11,7 15,1 25,8 15,5Vestfold 17,7 13,9 11,4 11,3 13,6Sandsvær 7,2 28,2 16,7 1,7 13,5Snitt 9,0 14,6 15,1 13,7
SR-bank 11,8 13,7 25,4 13,4 16,1Midt-Norge 5,3 33,4 16,8 11,4 16,7Nord-Norge 3,3 9,9 11 8 8,1
League table League table League table
Example:
AVERAGE
75 % 60 % 95 % 77 %
Bonus: 34,000 * 77 % = 26,000
TekstDynamicManagement
Rollingforecasts
Culture andorganization
Benchmarkingand scorecards
Bonus andincentives
Culture andorganizationThe only implementation project still active
30
The devolved leadership principles of Beyond Budgeting as a starting point
1. Customers Focus everyone on their customers, not on hierarchical relationships
2. Organization Organize as a lean network of accounting teams, not as centralized functions
3. Autonomy Give teams the freedom and capability to act; don’t micro-manage them
4. Responsibility Create a high responsibility culture at every level, not just at the top
5. Transparency Promote open information for self management; don’t restrict it hierarchically
6. Governance Adopt a few clear values, goals and boundaries, not detailed regulations
31
New management policy = three words
Business insight
Involvement
Responsibility
32
Business insight
Business insight
Involvement
Responsibility
• Strategic information should be transparent
• Emphasis on developing skills
• Stimulate knowledge and understanding of business models, competitive conditions, value drivers, etc.
• Discussion of strategic questions on lower management levels
33
Involvement
Business insight
Involvement
Responsibility
• Involve middle management and other employees in decision-making processes
• Employees should be involved on higher levels in the organization
34
Responsibility
Business insight
Involvement
Responsibility
• Delegate responsibility to employees
• Processes for authorization and freedom of action must be developed as a foundation
• When you have the business insight, involvement and responsibility should come naturally
35
Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
36
Some lessons we have learned
1. Top management involvement is crucial
2. External speakers are great motivators
3. Look for best practice companies in all business sectors, not just your own
4. You don’t need to buy a new business intelligence system before you start
5. Communication: “Continue to do what you’ve always done until you’re being told otherwise”
6. Implementation projects have final dates
37
Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
38
How can we create a uniform corporate governance?
How should we follow up on a forecast?
Q22009
Q32009
Q42009
Q12010Q2 2009
• The forecast created in Q2 2009 should be compared with the forecast created in Q1 2009
• Why did the forecast change?– Why is the result different than what we predicted last quarter?– Have any of the assumptions changed?– What actions can we take – if none?
Q12009
Q22009
Q32009
Q42009Q1 2009 ∑ 12
months
∑ 12months
Action plans
1. Does the forecast indicate that we will not reach our long-term goals?
2. Analyze – can or should we take action?
3. If so – what kind of action should we take?
3a. Strategic decisions 3b. Continuous improvement
– Meet new competition– Diversification– Changes in company portfolio– Organization structure– Etc.
– Reducing department costs– Efficiency improvements– Innovation– Etc.
GOAL
TARGET
CHECK
The most successful bank
Greatest improvement in
cost/income ratio
Return on equity close to average
Largest growth in loans and deposits
2004 2005 2006 2007 SnittBank 1 Oslo 7,7 15,3 16,8 8,0 11,9Hedmark 9,6 10,3 8,9 9,3 9,5Møre 11,8 13,8 13,5 15,3 13,6Sør 12,2 12,2 10,8 11,0 11,6Øst 17,2 24,7 7,0 13,2 15,5Pluss 10,5 11,4 13,1 12,0 11,7Sogn & Fj. 11,5 11,3 11,2 12,8 11,7Vestfold 12,1 14,2 12,6 11,1 12,5Sandsvær 13,6 15,8 10,5 10,4 12,6Snitt 12,3 14,2 10,9 11,9
SR-bank 19,5 25,5 22,6 16,1 20,9Midt-Norge 18,8 22,9 23,6 15,8 20,3Nord-Norge 14,8 20,2 22,8 14,6 18,1
2004 2005 2006 2007 SnittBank 1 Oslo 68,9 74,5 59,9 73,4 69,2Hedmark 52,2 49 54,3 56 52,9Møre 47 50,4 51,3 48,3 49,3Sør 53,3 53,2 54,7 51,6 53,2Øst 46,6 57,1 67,8 50,8 55,6Pluss 46 43,3 39,3 39,7 42,1Sogn & Fj. 52,9 56,1 56,5 50,1 53,9Vestfold 54,1 53,5 55,8 55,2 54,7Sandsvær 55,2 54,7 52,2 53,2 53,8Snitt 52,9 54,6 54,6 53,1
SR-bank 47,8 45,7 49,9 53 49,1Midt-Norge 48,5 50,1 49,7 52,2 50,1Nord-Norge 52,9 51,6 49,2 55,2 52,2
2004 2005 2006 2007 SnittBank 1 Oslo 0 14,4 13,6 18 11,5Hedmark 10,1 14,1 13,9 7,9 11,5Møre 5,4 10,5 14,8 13,9 11,2Sør 10,1 12,4 16,8 17 14,1Øst 4,7 8,9 16,3 10,9 10,2Pluss 16,7 17,4 17,6 16,7 17,1Sogn & Fj. 9,4 11,7 15,1 25,8 15,5Vestfold 17,7 13,9 11,4 11,3 13,6Sandsvær 7,2 28,2 16,7 1,7 13,5Snitt 9,0 14,6 15,1 13,7
SR-bank 11,8 13,7 25,4 13,4 16,1Midt-Norge 5,3 33,4 16,8 11,4 16,7Nord-Norge 3,3 9,9 11 8 8,1
League table League table League table
New management policy = three words
Business insight
Involvement
Responsibility
39
The Balanced Scorecard- Do we need it?
• Does it add value?
• If so, which parameters should we focus on?– Only value drivers?– Critical result indicators?
• What should replace the old budget and fixed targets?
• Should we combine it with league tables?
• What about staff functions?
40
The financial crisisIn
dex
Index showing the value of subprime mortgages
Perc
ent
Delinquency rates, all banks, real estate loans, residential
thou
sand
bill
ions
US
D (t
hous
and
billi
ons)
World, Standard & Poors 1200, Index, Market Cap, USD
• A cost reduction program has been initiated by our owners
• How can such a central initiative be combined with delegation of responsibility?
• Will it undermine our new corporate governance?
41
Our ownership structure, the SpareBank 1 Alliance, presents an extra challenge
SpareBank 1 Gruppen AS
Focus areas– Brand– Technology– Competence– Common processes and use of best practices– Purchasing
Regional competence centers– Payment services: Trondheim– Credit: Stavanger– Training: Tromsø
SpareBank 1SR-Bank (19,89 %)
SpareBank 1SR-Bank (19,89 %)
SpareBank 1SMN
(19,89 %)
SpareBank 1SMN
(19,89 %)
SpareBank 1Nord-Norge (19,89 %)
SpareBank 1Nord-Norge (19,89 %)
SparebankenHedmark (11,14%)
SparebankenHedmark (11,14%)
SamarbeidendeSparebanker (19,89 %)
SamarbeidendeSparebanker (19,89 %)
LO(9,29%)
LO(9,29%)
Alliance Co-operation ProgrammeAlliance Co-operation Programme
SpareBank 1 Oslo
(100%)
SpareBank 1 Oslo
(100%)
SpareBank 1Skadeforsikring
(100%)
SpareBank 1Skadeforsikring
(100%)
SpareBank 1Livsforsikring
(100%)
SpareBank 1Livsforsikring
(100%)
ODIN Forvaltning
(100%)
ODIN Forvaltning
(100%)
Actor Fordrings-forvaltning
(100%)
Actor Fordrings-forvaltning
(100%)
Argo Securities
(75%)
Argo Securities
(75%)
SpareBank 1 LTO
(100%)
SpareBank 1 LTO
(100%)
SpareBank 1 Factoring(100%)
SpareBank 1 Factoring(100%)
Verdigjenvinning(100%)
Verdigjenvinning(100%)
First Securities(24,5%)
First Securities(24,5%)
SpareBank 1 Boligkreditt
EiendomsMegler 1
BNbank
(Bank owned activities)
SpareBank 1 Boligkreditt
EiendomsMegler 1
BNbank
(Bank owned activities)
SpareBank 1 Gruppen Finans
Holding AS(100%)
SpareBank 1 Gruppen Finans
Holding AS(100%)
SpareBank 1Medlemskort
(100%)
SpareBank 1Medlemskort
(100%)
SpareBank 1 Gruppen AS – the structure • Some owners budget while others operate with rolling forecasts
• They are used to the illusive control that the budget has represented, when following up on SpareBank 1 Gruppen’sresults
• For the several product companies, it is difficult to find relative targets and league tables
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"....a continuous journey of learning and adaption"Jeremy Hope et.al, BBRT
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Agenda
1.Company presentation2.How we started3.Four implementation projects
1. Rolling forecasts2. Benchmarking and scorecards3. Bonus and incentives4. Culture and organization
4.What have we learned so far?5.Challenges ahead6.Contact information
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Contact information:
Visit us at:
www.sparebank1gruppen.no
www.slideshare.net/SpareBank1www.flickr.com/photos/sparebank1www.youtube.com/user/Sparebank1Norgehttp://pengeroglivet.blogs.com
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