Frontier National Bank
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II. Executive SummaryFrontier National Bank is going through the tough times of falling profitability and low liquidity. The current enthusiasm of the employees is very low which in turn is bringing down the Frontier National Bank performance. Despite the losses and ineffective staff, it had $7 billion worth of possessions.The current CEO who belonged to founder family was about to retire and to get out of the current situation and expand in other regions the board decided to look outside for a new CEO who was apt to take over and fill in the loopholes of the functioning of the bank. The board agreed on Ross Abernathy, Mr. Abernathy took the task after some initial concerns and realized that it would need him another 3 years to reshape and restructure the bank, to execute this Mr. Abernathy would need his own core team. Decision criteria to decide on the alternatives on team structure:Morale and enthusiasm within the teamAcceptance of the team by current Frontier bank employeesProbable RisksAvailable alternatives on how a team could be structured:A team from the current Frontier Bank employeesA team of people from Chicago Bank who have worked closely in past with Mr. Abernathy, people who trust and understand Mr. Abernathy A team which constitute of members from outside who are independent professionals picked for proven performance capacity and not because of friendship After evaluation of the alternatives bases the decision criteria, a team of twelve members should be structured uniformly from existing Frontier employees, people with whom Mr. Abernathy has worked earlier and proven independent professionals. After the development of teams they should be distributed across Finance, Marketing, Human Resource, and Operations departmentTable of Content1 Situation Analysis 52 Problem Statement 63 Decision Criteria 64 Available Alternatives 65 Evaluation of Alternatives 75.1 First Alternative: A team from the current Frontier Bank employees 75.2 Second Alternative: A team of people from Chicago Bank 75.3 Third Alternative: A team of proven independent professionals 86 Recommendation 97 Action Plan 98 Contingency Plan 9
Situation Analysis The Frontier National Bank one of the oldest and powerful bank in one of the country’s briskly growing region but around the time of Vietnam War it fell prey to its stodginess and started losing both market standing and profitability. The exiting environment at FNB exhibits a lack of Vision and Motivation which is causing the employees to be discouraged and dejected. If the current atmosphere continues then the bank will continue to lose its trustworthiness and status, which has been acquired over a period. However, in spite of declining profitability and inefficient staff, the bank still held the $7 billion worth of assets. When the CEO of the bank was nearing his retirement, the talks of merger, with other bank started also started making rounds. To come out of this position bank needs a strategy through which the bank can regain its lost footing and be a leader in the banking industry. To execute this plan they need to recruit a new Chief Executive Officer, which would bring in a fresh thinking. Name of Mr. Ross Abernathy, who had been a banker all his life and was responsible for the enormous success of his Chicago bank, was suggested. The Board and the current Chief Executive Officer happily approved the appointment of Mr. Abernathy.When Ross Abernathy was approached, he was uncertain about the job bearing in mind fact that it would need a lot of action and three years to reorganize the bank and brings the bank back to the road of profitability and growth. However, as he understood banking very well, he decided to take on the opportunity. To able, to deliver what was required, Mr. Abernathy needs to create a new team and was facing the challenge on how to structure the new team as he observed – existing executives were old and unenthusiastic, younger executives were dispirited.To solve this dilemma on the structure of the team he sought advice from his old folks – two professors and a lawyer who was a member of the law firm that led his former Chicago ban’s legal business. All three of them gave him a different advice and was now was stuck in a dilemma to which of the three he must listen as all three were inescapable. Now Mr. Abernathy has to analyze all three options on the structure of the team keeping in mind the Pros, cons, risks and moral problem, and morale disadvantages.Problem Statement How to structure a new team that can work efficiently with Mr. Abernathy and brings the bank back on track for profitability and growth.Decision Criteria Morale and enthusiasm within the teamAcceptance of the team by current Frontier bank employeesProbable RisksAvailable AlternativesA team from the current Frontier Bank employeesA team of people from Chicago Bank who have worked closely in past with Mr. Abernathy, people who trust and understand Mr. AbernathyA team which constitute of members from outside who are independent professionals picked for proven performance capacity and not because of friendship Evaluation of Alternatives 5.1 First Alternative: A team from the current Frontier Bank employeesCurrent employees at Frontier are lacking ambition and enthusiasm. They do not have the drive to accomplish new things. This lack of vision was one of the reasons, which led to the downfall of banks’ performance. As the members for this team are chosen from the existing Frontier bank employees, the dynamics and the comfort level between the core team and employees would be very goods as there would be a healthy bonding between the employees and the core team