Bank of America Case Study

Bank of America Case Study

Introduction

Bank of America was facing a lot of issues related to inefficiencies in the system. The business leaders realized that these inefficiencies resulted in unnecessary expenses and dissatisfied customers. In order to solve this problem, the bank took some steps in order to improve its process. This was done by creating some processes that were common in other companies during that time. However, there was a lacking of systematic implementation and the efforts tended to be isolated (Fishel & Conger, 2009). The result was that most people in the bank dismissed that these changes in the process would help the business. However, during the phase of solving the issue, it was determined that the issue was a result of a lack of talent in employees being promoted to the senior leadership level and therefore there was a need to solve this issue so that the organization would prosper.

Issue

In 2001, Kenneth D. Lewis, the new CEO and chairman of the Bank of America announced a major change in the way the bank is being managed. A major strategic change was foreseen in which the company would grow through merger, acquisitions, and organic growth. This would require the acquiring and retention of customers so that profit could be enhanced (Fishel & Conger, 2009).

This strategy paid off and the company grew substantially after the mergers and acquisitions thus making it extremely strong and helped it gain significant competitive advantage because of an increase in the number of customers. Another advantage was that its customer base was very diverse ranging from blue chip businesses, corporate customers, small, and middle markets etc.

However, despite having the customers, the company did not provide the services that customers demanded. Therefore, they faced problems in acquiring, and retaining customers. This proved that despite the efforts to improve the performances of the key processes, the company was still not performing well (Thomke, 2003). One such issue was that several defects were constantly being noted and correcting them involved a loss to the company. This also resulted in customers not being happy with the services being provided by the bank. With several close competitors providing better services, the bank soon realized that they were losing customers to competitors. This called for a major change that could lead the company out of this issue by significantly improving the processes (Turney, 2002).

Cause of the Problem

The CEO Mr. Lewis and other top managers realized that in order for the company to succeed, a very disciplined, comprehensive, and rigorous approach was needed. Therefore, they decided to adopt a six sigma approach whereby every process would be improved. During this process improvement stage, it was determined that one of the main causes of the problem was that the company was facing a leadership dilemma. This issue was such that whenever a new manager came into power, he lacked the skills needed to run the business and hence this used to lead to inefficiencies and a decline in ...