Regime change is rarely a gentle affair. New rulers are often keen to make their mark quickly, and Standard Chartered’s Bill Winters is no exception. In fact, since becoming boss a month ago, he’s proved himself rather a dab hand with a branding iron.
After announcing his intention to accelerate the emerging-markets focused bank’s cost-cutting drive, Winters has turned his attention to the senior management team. Three are leaving, following several more over the last month, as part of the ex-JP Morgan investment chief's major restructuring of the organisation.
The problem with the current structure, he said in a letter to staff seen by the FT, was one of defining roles. ‘I’ve heard a lot about the complexity of our existing organisation – slow or no decisions and confusion about who is responsible for what,’ he said, smartly sticking it to the discredited old regime before presenting his alternative vision.
StanChart’s eight regional divisions are being cut to four, and the new bosses of these divisions will answer directly to him. There are also new chiefs for the three global business divisions – investment banking, retail and commercial –who will also report to Winters.
‘Finance, Technology and Operations will be managed globally and report to me,’ he added, the pattern beginning to emerge, ‘while Audit, as an independent function, will continue to report to the board, but on a day-to-day basis will have a direct line to [you guessed it] me.’
The main loser in Winters’ seizure of the levers of power, other than the departing personnel, of course, is his number two, Mike Rees.
The business divisional heads had reported to Rees in an unusual arrangement under former boss Peter Sands. Deprived of them, he’s been consoled with responsibility for brand and marketing, and the knowledge that Winters considers him a ‘critical adviser’. Surely about as cutting as management speak gets.
None of this really should come as a surprise. Winters is in place because investors weren’t happy with the bank’s declining performance since 2013. He’s there to turn it around, and was given carte blanche on which to do it. Breaking firmly with the past was the logical first step.
Besides, this gives Winters the ability to promote or hire what is largely a new team. They owe their positions to him and his strategy, which means he can be fairly sure they buy into it. His direct oversight also gives him the best chance of making sure they stick to it.
‘Change is disruptive and unsettling,’ he told staff by way of encouragement, ‘but it can also be energising.’ Read: there’s an opportunity if you’re willing to play ball.
Winters was smart to go in hard and fast. His carte blanche from shareholders comes with a time limit. He has to deliver improved performance relatively soon, in the face of Sands’ ‘perfect storm’ of falling commodity prices, low interest rates and volatility, ‘regulatory challenges’ and hesitance towards emerging markets.
These external forces were what pulled profits down 30% in 2014, and there’s not much Winters can do about them. He therefore had to find internal ways of improving performance, with all the turbulence that causes, and that's meant placing the responsibility for success or failure firmly on his own shoulders. In the circumstances, the softly softly approach was never the way to go.