Building a Healthy Workplace

Companies can build resilience and enhance growth not just by the strength of their financial performance, but also through staff welfare and capacity building, writes Obinna Chima

The harsh economic environment and the increasing cost of doing business in the country have taken its toll on institutions with resultant effects on employees as well as investors. This unfortunately has led to downsizing by some institutions while return on investment for investors, has reduced drastically.

The challenges facing banks in the country are hydra-headed. Currently, the economy is faced with what could best be described as a weakening oil sector leading to reduction in earnings. This, coupled with the implementation of the Treasury Single Account (TSA), which has impacted the earnings of almost all banks; inflation; the foreign exchange crisis; phase out of commissions on turnover (COT) and other economic headwinds, have impacted the fortune of banks significantly. This unfortunate situation is not helped by the high exposure of banks to the oil and gas sector, which contributes over 70 percent of government revenue and 90 percent of all exports.

Building Healthy Corporations
However, McKinsey, a global management consulting firm noted in a report that managing companies for success across a range of time frames—a requisite for achieving both performance and health—is one of the toughest challenges in business. It pointed out that recently, it has been especially hard: turbulent economic conditions, for example, have concentrated the collective minds of many executives on pure survival.

According to the report titled: “Building the Healthy Corporation,” the fact that 10 of the largest 15 bankruptcies in history have occurred since 2001 is a strong deterrent to business building, playing up its inherent risks.
It added: “Businesses complain that financial markets increasingly focus on quarterly results and give little credit to strategies for creating longer-term value, particularly if they depress today’s profits. Empirical evidence largely contradicts such claims (see sidebar, “The stock market values health as well as performance”).

“But some noisy analysts undoubtedly do focus on short-term performance and thus unwittingly drive wedges between managements, boards, and investors. Management teams must urgently take the lead in showing their boards and the capital markets that they are nurturing the long-term health of their companies. They must act not only to improve corporate performance in the near term but also to lay the foundations today for consistent and resilient growth in years to come.

“Tools intended to encourage a more balanced approach and to promote “systems thinking” have been available to managers for some time. But our experience suggests that these tools are either being applied too mechanically (and therefore ineffectively) or being squeezed out by the focus on survival and by perceived pressure from investors. And that’s to say nothing of the increased near-term demands created by new regulations on financial reporting, particularly in the United States.”

Mckinsey stressed that while good short-term results are important, only by delivering them will management build confidence in its ability to realize longer-term strategies. Furthermore, the report stated that companies must also act today to ensure that they can convert their growth prospects, capabilities, relationships, and assets into future cash flows.

It revealed that one major European financial-services company recently discovered how easy it is for performance and health to get out of balance. After the company had achieved an impressive turnaround in its short-term financial performance in the three years to 2004, it found to its dismay that this success had been accompanied by falling customer service levels, a huge increase in staff turnover, and a fall in its share price. Management complained that the financial markets didn’t understand what the company had achieved. But in reality they understood, all too well, that its short-term success had been purchased at the expense of its underlying health.

“Such shortsighted behavior is widespread. In one recent survey, a majority of the managers polled said that they would forgo an investment offering a decent return on capital if it meant missing their quarterly earnings expectations. Indeed, more than 80 percent of the executives responding said they would cut expenditures on R&D and marketing to ensure that they met their quarterly earnings targets—even if they believed that the cuts were destroying long-term value.

This survey showed that even if more organisations are now talking the language of health, many address the issues only at a superficial level. According to the report, the chief executive of an international bank was recently shocked to find that members of his senior-management team were responding only to revenue targets and deliberately ignoring broader metrics of performance and health.

The Sterling Bank Experience
Sterling Bank in the last 11 years of its corporate existence has established itself as an institution that is an employee’s delight. The bank has continued to build its staff into the best they could be and recognises their contributions to its success.
Indeed, Sterling Bank is managed as a business that cares about its people though operating in an industry that is unknown for empathy towards employees.

According to a report, apart from competitively remunerating its staff, Sterling Bank has an outstanding record of giving employees an incredible opportunity to grow and develop. It is worthy of note that capacity building sessions are creatively woven into the weekly activities of the institution as staff bank-wide get the opportunity to increase their knowledge base and skills set mandatorily on a weekly basis driven by the bank.
The bank also has an excellent retirement plan; a good healthcare facility and an almost free daycare/creche facility for staff children between the ages of 2 weeks to 18 months at the Bank’s head office.

A novel initiative which the bank recently established is the flexi time and place which enables staff to choose the preferred time and place to discharge their responsibilities. Under this initiative, staff can work from home and resume at 10am which has never been a practice in the Nigerian financial services industry. This promotes work-life balance and some staff members get to drop their children off at school promoting family bonding also.

To build capacity for its people, the bank has instituted training and developmental programmes such as the Sterling Graduate Associate and the Sterling Management Associate programmes targeted at identifying, grooming and developing young talents for leadership positions in the Bank.

By extension, Sterling Bank also provides staff opportunities to give back to society and help them achieve their self-actualisation goals. These opportunities include the Sterling Volunteer Programme (SVP) where interested staff members get to impart knowledge and teach pupils and students in both public and private schools across the country relevant subjects and financial literacy topics to give the students a better financial head start in life. Apart from this, interested staff members also get the opportunity to donate in cash and kind to the less privileged and to internally displaced persons.

More so, in line with the global clamor for environmental preservation, the staff members of the bank regularly join street sweepers across the country to sweep the streets of the country giving them fulfilment that monthly remuneration could never give them.

“The Made-in-Nigeria national drive also provided a platform for staff of Sterling Bank to make impact. For the first time ever in the Nigerian financial services industry, staff of the bank adorned clothing Made-in-Nigeria to work on a Monday morning. It was done to promote locally made attires, patronise locally manufactured goods and align with the national drive to grow the economy and ensure consumption of domestic manufactures.

“These and so many other unique initiatives geared at staff engagement and actualisation of staff goals explain why a significant percentage of staff members in the bank have being employed for over five years and some staff have spent their entire careers working with Sterling Bank.

“The bank has also consciously engaged the global organisation, Great-Place-to-Work to further build on these achievements and achieve its goal of building a great place to work that will outlive current managers. While other organisations have taken steps to ensure they meet staff needs, it is not debatable that Sterling Bank has achieved some great feat in ensuring that its employees are fulfilled, positively impacted and can add better value to themselves, their families, the organisation and the nation as a whole,” the report from the bank added.