“Vision without action is a daydream.
Action without vision is a nightmare. ” – Japanese proverb Introduction According to Viewpoint, a vision is a statement giving a broad, aspirational image of the future that an organization is aiming to achieve. It outlines what the organization wants to be, or how it wants the world in which it operates to be.
A vision concentrates on the future and it is a source of inspiration that provides clear decision-making criteria.It may also create a sense of direction and opportunity to managers and other stakeholders. For a vision to inspire managers and other stakeholders, it should be achievable, and it should answer the question, what do we want to become? This paper seeks to evaluate the vision statement of Zimbabwe Allied Banking Group, herein referred to as ZABG and commenting of the relevance of the vision given the prevailing economic situation.ZABG was formed in February 2005 as a successor to three troubled banking institutions Barbican Bank, Royal Bank and Trust Bank. It operates in Zimbabwe and has nineteen branches and four agencies that are found in fifteen cities and/or towns of the country.
ZABG offers integrated financial services that include wholesale banking, retail banking, investment banking, stockbroking, treasury and leasing.Formed at a time when anxiety in the banking industry was high with depositors’ confidence in the industry at its lowest ebb, ZABG was created using the same model that was used in the formation of ABSA in neighboring South Africa with a view to provide an opportunity for depositors and creditors from the troubled institutions to realise meaningful value out of their investments and to undertake banking business with a strong, stable and well capitalized banking institution with a wide range of products and strategic service delivery channels.ZABG has its vision as “To be the leading financial services brand in Zimbabwe and the region while continuing to play the lead role locally in building confidence in the financial sector. Vision Evaluation Ad alluded to earlier, for a vision to inspire managers and other stakeholders, it should answer the question what do we want to become and it should be achievable. ZABG‘s vision statement may be broken into three segments for the purpose of affective analysis and these are ……….
. “to be a leading brand……….. ’, presence in the region, and building confidence in the financial services sector.The vision statement was crafted when the banking sector was over banked and there was instability in the industry following the collapse of a number of financial institutions. There was stiff competition in the market because there were many banks at that time so there was need to stress the importance of a leading brand. This was the time when all financial institutions wanted to differentiate themselves from others with the use of strong brands.
At the time branding was the in thing for financial services providers to survive.Having incorporated Trust Bank which was known for its powerful brand, and the highly capitalized position, ZABG had the potential to invest in the brand and achieve the dream. The other segments of its vision that of having a presence in the region was also achievable since it was highly capitalized and the Government being the major shareholder, the bank could easily penetrate the region. At the time that ZABG was formed, banks that had regional operations were performing better than banks that solely dependent on the local operations.This was as a result of the much needed foreign exchange inflows from regional operations. This segment of ZABG’S vision statement was achievable given the competitive factors mentioned above. According to the foreword by DR G Gono, the Reserve Bank of Zimbabwe Governor commenting on the supervisory action taken in terms of the troubled bank resolution framework, ……… “ The creation of ZABG represents the single major supervisory action taken ever by the Reserve Bank, with the main objective of being the protection of depositors’ funds and restoring stability and confidence in the financial sector………………….
. ’ The statement by the Governor reflects that it is not the responsibility of an individual bank to restore confidence in the sector. Having said that, it is therefore evident that ZABG’s quest to restore confidence in the financial services sector is not achievable. Since the vision articulated where the bank envisaged to become in the future, it worth noting that the question, what do we want to become, was well taken care of and was answered.
Relevance of the visionIn the current prevailing economic conditions that is characterised by low liquidity levels where the Central Bank has no control over the velocity of money, it becomes almost impossible that one of the players dream of building confidence in the market. Currently, the Reserve Bank cannot even perform one of its key functions that of lender of last resort. ZABG’s vision to build confidence in the sector is not relevant because it is not the responsibility of an individual bank to perform that function but for all the players in the industry.
ZABG’s vision has since lost its relevance in that in the current business environment brand loyalty has since lost significance but clients are now more interested in banks that are innovative in product development, flexible in the delivery of services as well as services that provide convenience. In a market where there money circulation is very limited and the disposable incomes for households are scarce, customers are interested in banks that can provide products such as loans. Given that scenario, the branding issue becomes irrelevant to ZABG if it does not meet customer needs.
We noticed a move by other banks to provide loans to the market in 2009 and ZABG lost a number of customers as a result of insensitivity to the brand because customers closed their accounts with the bank and opened where loans were being offered. It should also be noted that MBCA Bank offers Prepaid Visa Card that provides convenience to traveling customers. This is exactly what customers are expecting and this is the kind of bank that they are prepared to deal with irrespective of the brand.This in short means that the brand is no longer as relevant to the financial services sector as alluded to earlier. Following the isolation of Zimbabwe by the International Community between the period 2000 and 2008, the country’s reputation was dented to the extend that even some regional countries were no longer prepared to trade with Zimbabwe.
As such, the quest by ZABG to have a presence in the region becomes irrelevant because of perceived country or political risk.In addition, it would not make economic sense to invest outside its borders as the idea was to generate foreign currency. In an era where the economy is now using foreign currency, the ideal would be to consolidate operations locally and have highly innovated products using the latest technology in order to have the competitive edge.
Conclusion The environment that ZABG is now operating in has greatly changed following the formation of a Government of National Unity (GNU) that saw the economy adopting a multi currency system. It is therefore critical that ZABG aligns ts vision to be reflective of what is happening in its surroundings. As mentioned above, customers are not longer brand sensitive and as such now look for a service provider that gives value for their money in terms of product innovation and flexibility in providing the services. It is under this background that ZABG should align its vision to be reflective of the changing operating environment. ZABG should concentrate more on having a competitive advantage over other players as opposed to dreaming of building confidence in the banking sector.This function is a responsibility of the Reserve Bank of Zimbabwe, Ministry of Finance, as well as other regulatory authorities charged with instilling confidence in the market. On the other hand, since the introduction of the multi currency regime, it is no longer lucrative to have regional operations as the much needed foreign exchange is now circulating in Zimbabwe. It is worth noting that almost of the banks that had regional operations such as Kingdom Bank, Banc ABC have now changed their focus to concentrating in local operations.
Having said the above, it is hereby recommended that ZABG refocuses and change its vision statement so that it reflects what is now prevailing in the economy. References •T Ehlers & K Lazenby (2004) Strategic Management , Southern African concepts and cases Van Schaik Publishers •Reserve Bank of Zimbabwe (2005) Supervisory action taken in terms of the Troubled Bank resolution framework. •Reserve Bank of Zimbabwe (2004) Troubled Bank Resolution Framework •www. inc. com .