Equity’s talent pool has kept lender growing

Equity Bank group managing director & CEO Dr. James Mwangi during the banks third quater financial results on 3rd November 2016. PHOTO:WILBERFORCE OKWIRI

For many, the story of the rise of Equity Bank from insolvency to control a quarter of the country’s deposits is synonymous with James Mwangi, the towering figure that has dominated the lender’s history.

But how one of the seven children brought up by a widow and subsistence farmer rose through the ranks and learned how to identify talent and retain it has been in the background.

A book sponsored by the World Bank titled, Developing Africa’s Financial Services: The Importance of High Impact Entrepreneurship, shed light into Equity Bank’s elaborate back-office strategy that keeps human resource at the centre of its success story.

The book, edited by Prof Dana Redford, features four banks - Equity Bank (Kenya), Atlantico Millennium (Angola), Banco Unico (Mozambique) and Fidelity Bank (Ghana) - as case studies of financial institutions that have had high impact in sub-Saharan Africa.

It explores the legacy of Mr Mwangi who spent a decade as finance, operations and strategy director before becoming the CEO in 2004 and reforming how the bank recruits, promotes and retains talent.

According to the book, Equity Bank’s strategic hiring attracts workers with the mindset aligned to the organisation which is centred on entrepreneurship and financial inclusion.

“Evidence gleaned from Equity’s reports seems to indicate that is exactly what has enabled the company to grow,” David Zoogah and Christian Wolf say in their paper on Equity Bank.

It is no wonder that even as lenders, big and small, lay off employees in the thousands, Equity has only lost workers through natural attrition and has not offered to fire staff under the current tough economic times as a cost-saving measure.

The lender has gained workforce from banks it has acquired including Uganda Microfinance Limited and Procredit Congo Limited who understood their respective markets.

When it expanded into its Equitel MVNO business, bank assurance and investment business, it sought to employ organically, deploying teams from its branches and head office into these new units.

WORK CULTURE

The book also explores how new employees are co-opted into the lender’s work culture. Equity Bank has a thorough formal induction programme for all new staff which includes two weeks of classroom training followed by two weeks working at a branch to understand how the frontline units operate and interact with customers.

And if you want to get into the lender’s senior positions you have a better chance getting to know and interact with the senior management than waiting for a position to be advertised.

According to the book, the lender prefers head hunting and referrals from partners, board members and senior staff who they believe are more well-rounded technically and behaviourally.

“The company acknowledges that word of mouth is better in maximising human capital acquisition especially for expensive talented and senior executive openings,” the authors say.

As an Equity customer you are in a position to dictate whether an employee will get promoted or earn a bonus by appraising how they attend to you.

Equity has a reward metric that checks how many customers refer others to the bank, believing that this is as a result of getting premium treatment from the lender’s staff.

“One specific metric is the number of customers who refer others. It is likely that they were satisfied with the interactions they had with the employee,” Zoogah and Wolf say.

The lender also uses peer evaluation, how fellow employees rate each other based on day-to-day interaction and ‘Who’s smarter now’ challenge.

Equity organises each unit into monthly performance reviews where development mangers are given ‘mini CEO’ status to motivate their teams and compete with other units within the bank.

And to keep talent within the bank, equity rewards the employees with bonuses, cash, promotions and inviting some workers to senior management and board retreats to involve them in decision making, helping them feel appreciated.

At Equity, however, there is a perception that Mwangi is irreplaceable and has become one and the same with the bank.

After working for more than 28 years at the bank, Mwangi still has about eight years on his expanded term at the corner office.

“The board has extended my tenure to be CEO, but that doesn’t mean the bank doesn’t have a succession plan,” Mwangi said in 2016.

“We have headhunted some of the best brains in the global banking circles and they are all here at Equity. There are more than 10 people currently working within the bank who are capable of taking over from me.”

POTENTIAL SUCCESSORS

One of those mentioned by Mwangi as his potential successors is Bhartesh Shah, who is currently the chief operations officer.

Mr Shah replaced Dr Julius Kipngetich who had been poised to succeed Mwangi but left for Uchumi Supermarkets after the CEO’s tenure was extended by 10 years.

The book acknowledges that Mwangi has been instrumental in turning around the former building society into a formidable bank and building it through three phases of growth as it targets 100 million customers from the 10 million it currently serves.

It celebrates the lender’s breakthrough into mobile banking and its support to entrepreneurship by providing funding and training to its clientele.

Equity Bank has trained close to 1.6 million entrepreneurs including farmers, women, youth groups and micro, small and medium sized enterprises through various initiatives in partnership with the Mastercard Foundation and the International Labour Organisation.