Ralph Hamers soon will move into his office at UBS. Expectations are running high as he assumes the top job at Switzerland's largest bank. Which are the main challenges that he is facing? And what do the employees have to fear?
1. Rebuild Trust – At a Cost
Though outgoing CEO Sergio Ermotti is to be credited with extracting UBS from many of its crisis-era scandals (France and RMBS remain), the veteran CEO’s supply of trust has waned more recently. Ralph Hamers, a low-key, modestly-paid, and highly-sought CEO, has enormous potential.
Can he convert UBS into an inventive and free-thinking idea factory? Changing an organization’s DNA (see point 2) inevitably costs valuable personal capital: treading too delicately means nothing happens. A brasher, ruthless tone usually ends badly (cc Tidjane Thiam, Credit Suisse’s ex-CEO).
2. Breaking Up an Organization
Big corporations such as UBS tend to turn into organizations that are self-fulfilling. Instead of serving the client, the bank as an organization becomes the focus of attention, with staff seeking to optimize their gain and playing political games. Managers such as Joseph Stadler and Iqbal Khan were the most recent to acknowledge that new ideas tend to take far too long to reach the client at UBS.
Agile banking as a concept may serve to defeat this inclination and Hamers is a CEO (picture above) who succeeded in making the super-tanker ING more agile. He has to do three things first and foremost if he aims to break up the organization and make it more innovative and dynamic.
First: put the talent where they can make the biggest difference and empower them to reform existing structures – a question of infrastructure and people management. Second: Hamers should give his staff an incentive for reform, which is an issue of risk. Third: he must allow the status quo and personal interest to be upset in favor of innovation. And that is a question of attitude.
3. Introducing a New Culture
Cultural change is a big word but Hamers must initiate change at UBS. The bank traditionally has been run top-down, organized almost like the armed forces. Such a structure is no longer appropriate and concepts including transparency, agile banking and teamwork are becoming key in times of technological change and sustainability.
These are values that can only be instilled from the top in a huge company such as UBS. Chairman Axel Weber has done a fair bit already and Hamers will now come to his assistance. The Dutchman needs not to take consideration to undue sensitivities in his quest to lead the bank into a prosperous future.
4. Managing Egos
UBS has many: a bloated rung of vice-chairmen (all male), powerful general managing directors, MDs, and three different types of directors. The delicacy and diplomacy involved in keeping top, big-name bankers sweet is a key Ermotti strength – perhaps burnished in his years managing Merrill’s City bankers.
Hamers also needs to juggle managing a hungry private bank co-head (Khan) as well as the no less ambitious Sabine Keller-Busse, UBS’ operating chief and overseer of a huge region. It will be entertaining to see how the Hamers vintage of diplomacy – solution-oriented and direct to the point of bluntness – go down with the peacocks of Paradeplatz.
5. Farewell to the Old Bonus System
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