Portrait of a Change in Style – ING

“the right man in the appropriiate place.” That phrase is key for understanding Mr. Tilmant’s position as a CEO of the Bank-insurer ING.

Michel Tilmant brings a few changes to the management of ING. This change is — as he calls it himself — most of all a change in style with his predecessor (Kist), that is centered around three areas of interest:

  • Risk — he avoids more risk than his predecessor — Inline with this,
  • he focusses more on autonomous development for ING – And therefore
  • he chose the one brand, one culture solution

Basicly all three are quite related to each other.

ONE BRAND, ONE CULTURE

A change in style is achieved by acquiring sponsorship of the Formula one (F1) championships. The Renault team looses its sponsor from Japan Tabacco (Mild Seven) and Telefonica is doubting whether it should continue after knowing that the world champion Alonso will leave Renault for Mercedes McLaren. ING decides quick and gets a sponsorship for three years (2). it’s a pity that the world champion will leave Renault, but F1 is a means of increasing the (global) brand aspirations of ING. This sponsorship means a style break with another sponsorship, like that of the marathon of New York that which is not a global event. The marathon sponsorship remains intact. there is still a rather important brand in the Netherlands – de Postbank – that will be affected by this new strategy: the blue label has to leave. “the same happened to the green label from BBL,”replies the CEO where Tilmant was president before it merged with ING. Fernando Alonso (F1 pilot) is currently the protagonists in an ING TV commercial in Spain, where Alonso is one of the National hero’s and ING Direct a growing business. The single brand action works.

F1 has strengthened our organizational culture. More than 20.000 employees (a sixth of the total) has participated on one of the events… This led to an army of “ambassadors” for the ING brand. (4)

Cees Maas: “F1 is now a safe sport: drivers exit unharmed from crashed cars…” And the F1 itself plants trees in Mexico to balance the environmental effect (source unknown).

… On one culture: “I experiment with to make establish one culture here,” He shows a t-shirt with 139 autographs of young ING managers around the world. They should know about their roots and ING is Dutch. He wants a change in perspective “acomplishment is your biggest enemy.” He doesn’t like to do things half. At his entrance he grabbed the portfolio of Human Resources: I would like to be sure that the right people are in the right place. And I would like to select talent when they are still young. 28-30 then you can know whether they are capable of being a top manager. you must actively guide these. If you wait until they come up by themselves it may already be too late , they may leave. So he closely watches the top managers… Every three month the Board revises the functioning of 60 top managers, name by name. Once a year they do identical with a bigger group of 200 managers. The board decides on promotions. In this way to prevent the formation of clubs within the group and you can check on diversity Change of culture (annual report 2005): Better performance, more attention to business friends en “accountable” on measurable targets. No more “Dutch poldering” what is another word for compromises. He has particularly attention for the global stakes of ING not by broad discussions,” but by “hammering on” better execution of policy.

That this global brand strategy is working becomes clear when you search for previous takeovers. Like “Reliastar” these companies have adopted the ING label (Search at google for Reliastar and you will find: ING). But, although is one of the mayor financial service providers its brand shows “only” at the 85th place on the international Top Global Brands tally. By sponsoring F1 of Renault this must change into a global brand like Coca-Cola.

RISK

Tilmant “abolishes” the profit / earning forecasts the company has to present for the investors. it is a process he doesn’t understand quite well: “people spend much time on the activity and nobody knows what for.”

He sells included in the company that doesn’t match the strategic orientation (the German BHF bank, and CenE Bankiers in the Netherlands) and buys other that do (the Turkish bank Oyak). Unlike his predecessor he doesn’t like big takeovers that “always cost too much.” He believes in autonomous development (delivered by the growth engines like ING Direct, insurances in Asia and pension support) and stresses discipline and focus (3).

Tilmant doesn’t want to spend time on business he has no affinity with. So he stopped with profit forecasts – because; “its quite arrogant to think you can know the profit you will make the next three month.” He doesn0t comprehend why other keep on doing this and he hasn’t heard a negative reaction of the investors. ” We offer more information than before.” it is an action ING inherited from BBL where Tilmant was president. They didn’t send forecasts either to investors. At ING I noticed that “these forecasts became a burden when the market was negative. It took more time in adjusting the forecast than in managing the company… So he said: ” we stop with it.”

Tilmant’s style is more rational, international and less Dutch than his predecessor who was concerned about the position of women in business. But besides style there is not too much of a difference: “I agree with Kist on the content of the business and agrees that more women should reach the top.

CHANGE. Then there’s a Change in the financial ambience… In the US, after 9/11 the financial institutions must track financial transactions they execute. And since the “accountancy scandals there is more control on the financial reporting… “we must stick to the rules, and care for burocratic processes in the same time.” Another change: now, more than 50% of the shareholders are originated from the US and the UK. That a (new) reality. And ING itself also invests more oversees.

RISK and UNCERTAINTY

The Dutch brand Postbank will have to leave and the question is whether that will come with unexpected effects… A risk after all?

In an interview about the credit crunch crisis, Michel Tilmant responds that these complicated mortgages and credit derivatives became so complicated that we have been careful with outlays in these sectors “We found these exotic products too complex and very risky.” Therefore they missed extra profit in the period of prosperity, but they have missed the excesses of losses others have been dealt with. “We are awake and careful, but we should not become paranoid so that the financial systems gets paralyzed. (5)

To be Continued…

© 2008 Hans Bool

(2) – http://www.cincodias.com/articulo/empresas/Renault/F1/logra/patrocinio/ING/esperar/Telefonica/cdssec/20061017cdscdiemp_23/Tes/

(3) http://www.elsevier.nl/nieuws/economie/artikel/asp/artnr/135005/zoeken/ja/index.html

(4) http://www.ing.com/group/showdoc.jsp?docid=290204_NL&menopt=abo%7Cfar percent7C007&lang=nl

(5) http://www.nrc.nl/achtergrond/article943200.ece/Michel_Tilmant_ING_over_complexe_hypotheekderivaten_en_de_kredietcrisis

Advertisements
Standard

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s