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Strategy Implementation - ING Asia Pacific


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Prepared by the students of strategy implementation at the MBA program of IE Business School, this presentation analyzes ING’s erstwhile position in the Asia Pacific market, and tries to solve the challenge faced by Jacques Kemp, the then CEO of ING Asia Pacific, about consolidating a highly fragmented business in the region. His dilemma - how to communicate the need to change an existing highly autonomus and financially succesful organization?

Published in: Business, Economy & Finance

Strategy Implementation - ING Asia Pacific

  1. 1. ING Insurance Asia/Pacific Creating a “One-Firm” Firm Case Analysis and Recommendation Presented by: Group G • Anurag Jaiswal • Alessio Tixi • Geoff Gibson • Leidy Suarez • Patrick Oliveira • Eliza Ng • Matthias Wetzel
  2. 2. ING Global  A global financial services firm of Dutch origin.  One of the 20 largest financial institutions globally  Operates in more than 50 countries with more than 120,000 Employees  Organized along six major business lines grouped into Banking and Insurance: Banking Insurance  Retail Banking  Insurance Europe  Wholesale Banking  Insurance Americas  ING Direct  Insurance Asia/PacING Asia Pacific – Creating a “One-Firm” Firm
  3. 3. Insurance Industry in Asia  The insurance industry expected to expand dramatically  Rapid economic growth  Rising incomes  Popularity of insurance products  Insufficient state or company pensions  High insurance premiums  High rate of savings in Asia  Regulations play an important role. However, it is expected that the markets will become more open.ING Asia Pacific – Creating a “One-Firm” Firm
  4. 4. ING Asia/Pacific  Among top-five foreign service Seoul providers in Asia/Pacific. Tokyo Shenzhen Taipei  Divided into clusters of mature, semi-mature and emerging markets. Hong KongMumbai Bangkok Manila  Hong Kong Regional Monitoring Center for Asia/Pacific Kuala Lumpur Singapore  Different countries offer various products.  Recently acquired AETNA Insurance – which was four –times larger than ING in Asia Sydney AucklandING Asia Pacific – Creating a “One-Firm” Firm
  5. 5. Jacques Kemp’s Vision “Our goal in Asia/Pacific is to grow faster than the other regions of ING and faster than the competition. We want to achieve unified diversity without adding too much complexity to the daily operations. The idea is to become a professional soccer team which has a strategy rather than just running disorganized towards the goal.”CHALLENGE: Very difficult to communicate the need to changean existing highly autonomus and financially succesfulorganizationING Asia Pacific – Creating a “One-Firm” Firm
  6. 6. Issue AnalysisING Asia Pacific – Creating a “One-Firm” Firm
  7. 7. Why Change? - The Challenges Issues Root Cause  No common goals  Strategy formulation is done at  No aligned strategies business unit (country) level  Different job descriptions and  Each business unit defines its own job responsibilities and different responsibilities and evaluation criteria performance evaluation criteria  Different reporting formats among  Different standards across business business units units  Difficult auditing  No information sharing or knowledge  Independent strategies and processes management amongst business units  Independent marketing strategies for  Lack of internal corporate each business unit. communication and regional  No “common language” acrosss marketing or branding business unitsING Asia Pacific – Creating a “One-Firm” Firm
  8. 8. Organization Chart Prior to April 2003 Chairman Executive 1 Executive 2 Regional Issue #1: How to improve the steering CEO ability of the executive committee? Issue #2: How to make sure single BUs General General exercise their autonomy within a shared EC Member EC Member framework/ goal congruence? Manager Manager Chief of Staff Taiwan Korea Australia Executive Regional office Issue #3: How to improve cross Hong Kong Indonesia Ma;aysia functional interaction, standardize job professionals descriptions and evaluation methods? How to create a truly shared company culture and protocol Japan China Thailand India PhilippinesING Asia Pacific – Creating a “One-Firm” Firm
  9. 9. Our RecommendationsING Asia Pacific – Creating a “One-Firm” Firm
  10. 10. Our Recommendations Root Cause Fix  Strategy formulation is done at Goal congruence business unit (country) level Aligned strategy (“wheels“)  Each business unit defines its own Definition of standardized but flexible job responsibilities and evaluation goal templates criteria Monitoring  Different standards across business Standardization process to be moved to units EC level Creation of shared-service center  Independent strategies and Creation of Intranet for sharing best processes practices, guidelines  Independent marketing strategies for “One Firm” Branding each business unit. Standardization  Regional Function  No “common language” across Manager business units Customization  Country ManagerING Asia Pacific – Creating a “One-Firm” Firm
  11. 11. Marketing and Branding - A Special Case Why is it important?  To build trust and credibility with customers through one ING brand  To create an element that employees can connect with and build unity  To share marketing best-practices Issues  Local marketing campaigns don’t reflect existing corporate identity standards.  Local businesses know best their home market and don’t want interference Recommendation  Regional marketing manager creates overall marketing plan for the region  Local offices customize plan to specific market  Local plan requires final approval of regional marketing managerING Asia Pacific – Creating a “One-Firm” Firm 11
  12. 12. Support Functions – Matrix Structure A balance between standardization and customization Business units Hong Australia China India Japan Korea Malaysia Kong IT Support Functions HR Marketing Legal Compliance Finance CommunicationING Asia Pacific – Creating a “One-Firm” Firm
  13. 13. Matrix Structure – An Example A balance between standardization and customization Executive Country Manager Committee India •Operational Decisions •Customization •Strategic Decisions •Standardization Marketing Regional Marketing Manager Manager IndiaING Asia Pacific – Creating a “One-Firm” Firm
  14. 14. Country Monitoring - An Example Country: India Country Goals:  Achieve 10% market share  Grow 5% more in Life Insurance than market  Increase brand awareness  Achieve 10% profit Achievements:  Increased market position to top 3  Growth of 7% compared to market  Profit of 12% Criteria Rating Key issues for improvement Portfolio / Sales - Decreasing MS in Life insurance Marketing / Branding - Perceived as too small brand Communication/ Knowlegde sharing - No contribution to intranet Organization (Reporting, Alignment) - Late reporting FinancialING Asia Pacific – Creating a “One-Firm” Firm
  15. 15. Goal Setting and Performance Evaluation Role-based goal-definition template Defined at Executive Committee level, involving the Country Managers Regional Goal 1 Weight Mandatory goals – common across Regional Goal 2 Weight region for the Regional Goal 3 Weight same role Regional Goal 4 Weight Business Unit Goal 1 Weight Flexible goals – to Business Unit Goal 2 Weight be selected by Country Manager Business Unit Goal 3 Weight Business Unit Goal 4 WeightING Asia Pacific – Creating a “One-Firm” Firm
  16. 16. Communication  Intranet (best practices, guidelines) Knowledge sharing {  Shared service center Monthly newsletters Semi-annual support/functional team meetings Townhall meetings (CEO informs about quarterly results) Year book with pictures from employee events Communication of extraordinary results  Reinforce Corporate Culture (people should feel part of ING)  Incentivize the sharing of best practicesING Asia Pacific – Creating a “One-Firm” Firm
  17. 17. Timeline of Execution Design Establish Take Communication Define Jobs & Business Unit Performance Feedback & on Restructure Responsibilities Targets Evaluations Measure Communication Communication CommunicationING Asia Pacific – Creating a “One-Firm” Firm
  18. 18. Risks and Mitigation Risk Mitigation Plan  Too much standardization may lead  Standardize support areas, customize to lost opportunities in local markets products and customer relations  Loss of entrepreneurial environment  Incentive pay for new business ideas  Involve Country Managers in regional  No buy-in from Country Managers decision making  Setup a separate corporate  Change not communicated properly communications department and can generate insecurity define communications strategy  Lack of support and training for the  Hire change-management trainers and change management process conduct workshopsING Asia Pacific – Creating a “One-Firm” Firm
  19. 19. Performance Key Drivers Leads to Results Starting with ultimate Business Unit mission eventually objectives not aligning all business aligned with units with strategies Corporate leads to performance Strategies & resultsING Asia Pacific – Creating a “One-Firm” Firm
  20. 20. Thank You! Questions?ING Asia Pacific – Creating a “One-Firm” Firm