Chemical's Retail Bank competes in a marketplace characterized by intense pricing competition, and outflow of deposits to mutual funds, rapidly evolving technology, and increased customer demand for value. In addition to those factors, the underlying growth in core expenses, such as occupancy, salaries and benefits, also help causes a real profitability squeeze for the Retail Bank. The company needs to change its strategy to a market-focused organization that focuses on targeted customer groups. In order to implement this strategy, the company has to make major investments to understand customer needs and develop new products for those customers. If the Retail Bank only pays attention to financial measures, it will not be able to achieve long-term goal but only get the short-term goal fulfilled. The company has to communicate the strategy to all of its employees, and by adopting non-financial measures, it can make the employees devote more effort on improvement other than just "more deposits" for the company.
BSC that can lay out clear specification of strategic objectives and appropriate measures in fields of financial, customer, internal business and learning and growth would be a useful way to create change for the Retail Bank. As a senior management, Mike Hegarty believes that his commitment to this concept can help push performance measures throughout the company. By adopting this approach of implementing strategy, Mr. Hegarty is convinced that it can help create the cultural change he desired at the Retail Bank. Mr. Hegarty wants to increase customer confidence in the Retail Bank's financial advice by shifting image from a provider of a narrow set of banking services to a financial advisor and service provider, and thus it can broaden the increase the set of financial products that customers transact with the bank. Through BSC, this objective is linked with internal processes that lead to the improvement in the learning and growth perspective. The bank's representatives have to expand skills to serve as customers' counselors and communicate knowledgeably about the expanded set of financial products. With BSC, employees can see the linkages between focus on infrastructure and long-term goals.
The BSC implementation process at Chemical's Retail Bank is in progress, but far from complete. It can help to combine the two cultures, strong central stuff of Manufactures Hanover and Chemical's decentralized approach, and help focus on serving customers in a learning environment. It also contributes to the impressive progress in New York Divisions in1994. Through BSC, employees have a better idea of the company's strategy and long-term goals.
The senior management's willingness to implement