One further
introductory note.
What follows is
not so much a criticism of GFH’s new strategy as a commentary on how that
strategy was presented.
Image, morale all
have their part to play in corporate success.
As a participant in such exercises, AA always felt that these rituals
and the rhetoric that accompanies them need to be controlled to avoid
overstatement–which can well undermine their fundamental intent.
To start things off a headline blurb from
GFH’s 2014 Annual Report (AR):
“There are those who prepare for change and grow stronger because of it, while others struggle to come to terms with the inevitable. We believe our remarkable brand needed a bold and considered change and we have been preparing for the right time to make the required transformation.That time is now.”
“Bold” yet “considered”. Launched at just the “right time” to
make a “transformation”.
Some initial
reflections on the above:
“Come to terms with the inevitable” sounds rather ominous. Apparently, it wasn’t only a question of business. GFH didn’t see much of a future as a mere investment bank nor retaining the Gulf Finance House moniker--one element of the “remarkable brand” that unfortunately had to be jettisoned. Coming to terms has also resulted in a strategic decision to continue what the ill-destined investment bank GFH was doing but not to do so much in real estate. Luckily GFH’s preparations were finalized in time! From a more philosophical and perhaps even theological perspective does the new GFH’s change in strategy represent a repudiation of the regional adage that “real estate may get sick, but it never dies”?
“Remarkable brand” – it’s interesting that the focus is on “brand” rather than “business”. A case of corporate babblespeak? Or an indication that image rather than substance is the key focus? Sadly of late, the brand has been remarkable primarily for unremarkable (two euphemisms in a single post!) results.
“Bold and
considered change”—what does it entail?
Besides changing
its name, GFH the “financial group” has boldly separated out activities
that Gulf Finance House—the apparently inevitably doomed investment
bank—undertook. Its new strategy is to develop these businesses under newly
created LOBs and thus diversify its portfolio.
In AA’s opinion
this seems less bold than proclaimed.
Essentially it is
largely more of the same in terms of activities. GFH is not entering the
insurance business or exiting real estate completely. Either of these would be
bold moves. The plan to diversify the
business away from real estate is eminently reasonable given performance. Sensible rather than bold. Yet real estate will remain the core
business. Fine-tuning not radical
change.
From investment
bank to financial group. By AA’s
reckoning none of the new LOBs are outside the range of investment banking
activity. Even the Goldmine
and Morgan Stanley are now pitching middle market commercial banking
services. And shudder some are into retail
lending! Diversification is also a concept that is not
foreign to most investment banks.
So
why is “GFH transforming from investment bank into a financial group designated
to offer a unique financial portfolio and maximize value potential to its
shareholders” as we’re told on page 33 of the 2014 AR? For that matter why is GFH more concerned
about maximizing value potential than in maximizing value realization? Should it be pursuing return of
financial portfolios rather than their uniqueness?
Is there a
compelling business reason or is this corporate imaging?
From where AA
sits, this seems to be either
(1) rebranding: an
attempt to create a new corporate persona to put some “daylight” between the
new brand and what then is highly likely to be the old tarnished brand and/or
(2) kotodama. Names have power. If we change our name, our fate will
change. In earlier days those who
perceived the need for a name change consulted religious figures, numerologists,
astrologers, etc. to help find appropriate and powerful new names and symbols. In these imagined more enlightened
times, corporations hire corporate image consultants.
GFH now ventures
forward as a self-identified “financial group” under a somewhat new (brand)
name with a new and no doubt more powerful logo and apparently new corporate
colors—all part of the customary and sacred corporate rituals that accompany
this exercise. AA sadly did not notice
if the preferred corporate font had changed—a step that some consultants say irrevocably
seals the transformation.
In case you’re
wondering given the apparent cynicism of the remarks above, AA bears his
employer’s logo and corporate colors proudly by day with pitchbooks (yes, we
have a preferred font and font size!) and by night with specially made
pajamas. Pinstripe of course! And a
more casual pair but only for use on nights of officially sanctioned casual
dress days.
Before closing
one further quote, this from GFH’s 2015 Annual Report cover which is a nice
collection of corporate babblespeak favorite terms Boldface and comments are AA’s.
GFH
Financial Group is on course to achieve steady and sure financial growth by following
a clearly defined strategy [AA’s practical business experience
suggests clearly defined is a key element in a good strategy, but while necessary,
not sufficient]. As our 2015 Annual Report & Accounts illustrates,
our brand’s vision to discover, innovate, and realise value potential
[perhaps proof not that any is needed of corporate personhood. It’s unclear though if “vision” relates to
imaginings of things that never were or of things that might be, etc. Special kudos for linking “vision” to action
verbs.], has empowered us to diversify our sectors of excellence,
as well as expand our geographical footprint.
I was
hoping for “one-stop shopping”, “leverage”, “best of breed”, “best practices”,
“global architecture”, and maybe even “evisculate”.
Something perhaps for 2016.