Change Management Practices and Performance of National Bank of Kenya

Abstract

Change management ipractices ientails ithe iorganized iactivities iand iprocesses ithat iare iimplemented ito ideal iwith ithe itransformation ior itransition iof ian iorganization's itechnologies, iprocesses iand igoals. iChange imanagement iis icontinually ibeing iseen ias ia ipractical iinstrument ithat ioffers ianswers ito ia irange iof iperformance iproblems iconfronting iorganizations. iThe iobjective iof ithe iresearch iwas ito iexamine ithe ieffect iof ichange imanagement ion iperformance iof iNational iBank iof iKenya. i iLewin’s ichange itheory iand idynamic icapabilities itheory iwere iused ito ianchor ithe istudy. A case study design was applied in this study where an interview guide was used to gather the qualitative data that was used in the study. The key informant interviews were directed to four senior management personnel at National Bank of Kenya. These were Senior Managers in Marketing & Corporate Affairs, Finance, Internal Audit and Human Resource departments. The qualitative information gathered from the four interviews was analysed through the use of content analysis in the research. The study results determined that there were various changes that were undertaken by NBK immediately it was acquired by KCB bank in 2019. The main changes that took place included business realignment, capital injection, top management changes, organization culture change, organizational structure change, board reorganization, and process reengineering. The study also determined that NBK has been on an upward trend in all areas, including the bottom-line profit before tax metric, ever since it adopted changes after its acquisition by KCB. The positive outcomes of the changes were made possible by successful implementation of the new business model, business realignment, and changes in senior management and structure. The study also determined that one of the significant changes implemented at NBK was business realignment or restructuring. Business realignment enabled the bank to boost employee productivity, which improved financial outcomes. NBK recorded a net profit of KES 717.6 million for the first half of 2021, up from a deficit of KES 381.3 million in 2020, which is supported by an examination of financial records. This was a 307% increase, which was fuelled by increasing loan interest income, foreign exchange trading income, and decreased loan loss reserves. The research also determined that changes to the board and to senior management had favourable outcomes to performance of NBK. The study further established that the NBK's change to its organizational culture was one of the most important changes that boosted worker productivity and financial results. The study recommends that when implementing any changes, the organization should first identify the root problems necessitating the changes, communicate the expected changes to all stakeholders including employees and ensure that employees participate in all the phases of the change process. The study also recommends that to encourage and motivate employees to adhere to the changes, there should be training and positive reinforcements. An organization should hence consider salary increments and bonus payments based on performance and adherence to the new ways of doing things. Lastly, there should be plans to be followed in executing change and these should be adhered to ensure that implemented changes bring the desired outcomes.