Kenya has been undergoing a sustained economic recovery since the end of the Daniel arap Moi era in 2002. A major component in the country's economic progress has been the role played by KCB, which has more branches than any other bank in the country. KCB, once an ailing state-owned company, is now expanding further from its home base. Andrea Bohnstedt talks with Martin Oduor Otieno the bank's CEO.
Oduor Otieno, in his early fifties, is a man with a quiet passion for what he does. He took over the CEO position in KCB in 2007, after having served as the deputy to previous CEO Terry Davidson for two years. KCB, now one of the key players in Kenya's financial sector and the bank with the largest branch network, has made an impressive turnaround--from being a stereotypical ailing state bank burdened with a large portfolio of non-performing loans from political lending.
KCB hit rock bottom between 2000 and 2002 and posted a loss of KSH4.1bn ($53.7m) in the 2002/2003 financial year. However, since then, government has gradually reduced its shareholding to 26%, and the institution has made an increasingly vigorous recovery.
While Terry Davidson was busy turning around the bank and managing day to day business, his deputy took a long, hard look at strategy and where the bank would go in future. "We couldn't keep focusing only on what was negative in the bank" Odour Otieno reflects. Turning around the bank meant retrenching staff from around 4,000 to around 2,000, but the institution also had to be given new direction.
Oduor Otieno began a programme to change the organizational culture--at that time very dysfunctional, with tense relations between board and management as well as management and staff--and define and instill a set of core values, customer service, professionalism, teamwork, embracing change, and community involvement, that would provide focus for the employees.
With the objective to become the best bank in the region, KCB rebranded, from Kenya Commercial Bank to the abbreviated KCB and the current green corporate colour, to give it a less Kenya-specific image.
KCB also made heavy investments in technology and staff. To date, there is only one board member who was on the board five years ago already, and of the top 20 staff, 15 had been newly recruited over the past years.
KCB hired most of them from the Kenyan banking sector. According to Oduor Otieno, Kenya does have a skilled banking work force and lots of local talent, so that the typical brain drain is less of a concern in this industry.
In addition, KCB regularly takes in graduates for training. However, skilled people are still sought after--KCB soon found itself at the receiving end of this when it began losing good staff to the competition.
As part of the organisational change, Oduor Otieno was...