Page 1: Introduction
'We must become a knowledge-based economy.' The UK government has set this target for the UK, with a view to improving the international competitiveness of the UK economy. This approach recognises that:
- other countries’ products are becoming increasingly sophisticated
- international trade in services is set to grow
- modern products need a well-educated, well-informed workforce to producethem
- other countries are willing to spend money on developing knowledge and expertise across a broad spectrum of industries
- knowledge, skill and creativity give companies a competitive edge.
In today’s high-tech world, organisations need the intellectual capital of their employees every bit as much as they need physical capital. In previous, more heavily industrial eras it was largely machinery, supported by large labour forces, that drove processes. Today, with industrial processes becoming increasingly sophisticated and with service industries growing in importance, people’s intellectual and creative capabilities do much to enable a business to identify, manage and satisfy customer requirements. In the past few years, the financial services sector has seen more changes than most other industrial sectors. It has had to cope with:
- increased levels of competition
- mergers and takeovers
- the impact of new technology
- new regulatory regimes
- changing patterns of consumer demand
- pressure on prices and profit margins.
These pressures have obliged the industry to review and change the way it operates, and to develop an organisational culture that is able to meet these new conditions. This case study looks at how one leading financial services company, Britannic Assurance, has met the challenge by setting up a management development programme: Management Forum. This was established to help managers respond to change by making them more strategic in thought and action. The programme was intended not only to benefit the individuals concerned, but also the whole organisation.
Britannic Assurance has more than 130 years’ experience in financial services. It operates within a business environment that is heavily regulated. In the past, the development of managers in the financial sector focused largely upon how managers should supervise; managers learned to be tactical operators.
This short-term approach to management meant that managers concerned themselves with immediate ‘here and now’ issues, rather than on the ongoing long-term development of the business. Managing for the short-term meant that managers tended to treat all employees in a similar fashion. This in turn affected staff motivation and blunted staff commitment to the organisation. As a result, insurance companies and the like put their own futures under threat. Management Forum was set up to put right many of these failings.