Banker Trust Case Study

Analysis:

• Banker trust is the banking company based in New York City. Banker trust had internal consulting group to help bank with strategy work. This group consist of about 45 consultants and Head of the group was Tony Brown.
• Tony Brown was the Managing director the group. He has few consultant reporting to him. And he had few business analyst and assistant reports to him. He has pull of people for project management.
• Each project manager was self-motivated to go out and talk with other line managers within bank and find work.
• The reason bank had internal consulting group is because bank is struggling in operation. The main role consulting group was playing in Strategy work, reengineering work and risk management work. The goal was to hire the people and train then so they can serve in any bank unit more effectively.
• Brown report to CFO of the company.
• In Past before Brown join the company, the purpose of Bankers Trust Internal Consulting Group was to give new hires a flavor of the company, let them get to know different functions and then make a decision where they want to make a career.
• The corporate development group did projects specifically for the CFO, CEO and their units. And they did a lot of work where they were doing fundamental analysis or scenario development
• The primary source of work for internal consulting group is that they got from Line managers and occasionally from CFO. Selling work mainly done by Brown. He was not focusing on managing project.    
• Mostly Brown recruited consulting background people and people who was interested in banking. He reshape the group.

Issues:

• The problem with this was the bank was not had much strategy work.
• Internal consulting group people was not busy on projects all the time so their utilization was not more effective
• Bank made few major acquisition so they were low on cash flow and chairman and other top management was looking into cutting cost.
• CEO and CFO were new to the banks so they didn’t have emotional ties with Internal consulting group.
• There were lot of internal discussion and concern related to why internal consulting was existed and some people wanted to disbanding the group.
• The Chairman was attempting to force stronger budgeting discipline in the organization overall and he was trying to force expenses out of the budget. This led CFO to Disbanding the group.
• Employees within group was concern about their bonus as their Utilization go down, their bonuses go down.
• Decision to disbanding the group was not expense-based decision. Chairman makes this decision to make his direct report feel better.
• Decision to disbanding the group ultimately cost bank more money because they had to hire Mckinsey to do some strategy work and Mckinsey was really expensive to hire

Recommendation

Here are my recommendations are:

• I would recommend that CEO and CFO should recognize the importance of internal consulting group and be more attached to them as they were integral part of the bank
• The decision to cut down the cost should be based in numbers. I recommend that chairman should had looked the reports and case from Brown and why this group continue to operate.
• I recommend that Brown should have study organization hierarchy and politics more in details and realize early on that he served at the pleasure of the CEO so he could have tried more effort to convince CEO on importance of the group.