Making a bank more efficient requires resolute action from the top, Credit Suisse executive Thomas Gottstein told finews.asia. His hands-on approach may inspire Asian colleagues.
When Credit Suisse CEO Tidjane Thiam took charge at Switzerland’s second-largest bank three years ago, he lost no time making his ambitions clear: a massive cut in costs combined with higher returns to achieve long-term profitability – and all units had to contribute.
At the Swiss unit, the heart of the bank, this meant that CEO Thomas Gottstein had to start eliminating jobs if he wanted to meet the target and boost his profit. Gottstein’s task at the Swiss bank, which already was profitable, wasn’t too dissimilar from those faced by established banks across Asia, where older firms are struggling to trim their organizations.
One of the Star Performers
Today, Gottstein is one of the star performers of the revitalized Credit Suisse, and he has turned his Swiss business into a veritable cash cow. How come?
«We had many inefficient setups and procedures, a lot of which was far too decentral, and the structures were too hierarchical,» Gottstein told finews.asia in an exclusive interview.
Plain-speaking, No-nonsense Style
The best example of what was wrong at the Swiss bank is something unbeknown in the English language. The bankers addressed each other using the more formal «Sie» as opposed to the first-name «du» basis.
The distinction in German (and French for that matter) helps a person put ground between himself and his opposite. The Swiss style of conversation for instance is far less hands-on than the U.S. approach with its plain-speaking, no-nonsense style.
Faster Decision-making at the Front
The reason why Gottstein was adamant to turn this around is easy enough to understand: «From investment banking, I was used to address everybody directly, including the younger member of staff. In Switzerland, this was not so,» he said. «I wanted faster decision-making at the front, preventing a system where you have go from one layer of bureaucracy to the next before you can give your answer to the client.»
Strict hierarchies with multiple layers of bureaucracies – the picture painted by Gottstein sounds not too unfamiliar to some Asian banks, for instance in Japan, where traditional habits persist and loads of procedures are still carried out manually.
All Somehow Moved Up One Level
«We removed an entire layer of management,» Gottstein told finews.asia proudly. «This didn’t please staff affected of course, but the ones below were very happy because they all somehow moved up one level.»
Just like their Asian competitors, the Swiss for a long time profited from their reputation as reliable, conservative image. But this image is too expensive to retain for a large corporation such as Credit Suisse – hence the need for top executives to identify and turn symbols of a mentality that has become a hinder in the struggle to keep up with up-and-coming challengers from places such as Cupertino.
