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assessment of delivering value: the centre for tomorrow's company
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The Centre for Tomorrow's Company is a think tank and
catalyst, researching and stimulating the development of
a new agenda for business. The Centre represents a
practical vision of sustainable business which makes
sense to shareholders and to society.
All credit to The Co-operative Bank for its transparency
and for consistently practising what it preaches. It will be
important to maintain this consistency of reporting in the
face of the inevitable changes implied by the move to
closer working with CIS. Back in 1997 the bank identified
its seven Partners. Its aim is to deliver value, as defined by
the Partner in each of those relationships, in a socially
responsible and ecologically sustainable manner.
Last year I raised two concerns. One was about the
inevitable tension between leadership and stakeholder
concerns. Companies have their own values that never
change; at the same time they need to listen to the views
of their stakeholders, which may well change from year to
year. There have to be some core values that never
change, whatever level of support they earn from
stakeholders in a particular survey. The result is
the new indicator derivation key to be found In the Indicators Index (follow this link to the indicators index).
My other concern was about consistency. I asked that
where indicators had been changed readers were still
allowed in the transition to understand how performance
would have looked under the previous indicator. The bank
took up this suggestion, and has also introduced a twopage
summary entitled "performance over time at a
glance" which sets a new standard in consistency.
Two of the "delivering value" indicators on this summary
have shown a decline over five years. One is return on
equity, which seems on the face of it surprising in the light
of the 95% increase in profitability over the period
1997-2001, but this is primarily a consequence of the fact
that reserves have increased substantially over this time,
and is still above the average for the Major British Banking
Group. The other is "staff agreeing that there is sufficient
opportunity for career progression."
If there is any relationship in which special focus may be
needed it would appear to be the staff relationship. This
is an organisation in which the headline indicators for
customer and supplier satisfaction are all around or
above 90%.
At first glance there are some equally impressive staff
indicators. For the second consecutive year, the bank is
the only high street retail bank to qualify for the "100 Best
Companies to Work for". It wins praise on its re-assessment
by Investors in People. And at a time where many
companies are closing contributory final salary schemes,
and contributing no more than 6% to employees' personal
pension plans, the bank maintains a non-contributory final
salary pension equivalent to 15.6% of its pay bill.
As the Chief Executive acknowledges in his introduction,
there are, however, lower levels of satisfaction with career
progression, and 26% of staff disagree with the statement
"I believe the bank behaves ethically in the way it treats its
staff". A new indicator for employee well-being also tells
us that 47% of staff "often feel under inappropriate
pressure in my current role".
Could it be that the issue here is not simply about
promotion or ethics, but about a growing need for staff in
organisations to feel more in control of the contribution
they make? The new community volunteering programme
represents a good example of the bank moving in
this direction.
It is interesting that the bulk of the indicators chosen for
the staff relationship are about what the bank does for its
staff (although this is primarily a consequence of the fact
that staff have nominated these as priority issues).
I would like to see more use of indicators which test how
far staff feel they are being engaged and stretched in
doing an ever better job for the bank. The bank has
agreed to review this matter next year.
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Mark Goyder, 6th March 2002 |
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