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Scooped by Deb Nystrom, REVELN!

Championing a Radical Old Way of Doing New Global Business: High Profits & Low Power Centric Culture

Championing a Radical Old Way of Doing New Global Business:  High Profits &  Low Power Centric Culture | Change Leadership Watch |

Svenska Handelsbanken has championed an entirely different way of doing business, and has the profits, loyalty and longevity to prove that it works.

Three years ago, stock market analysts at Sweden’s main business paper set about using data from the London School of Business to find the world’s best performing share since the start of the 20th century.

The answer? Handelsbanken. Ten pounds invested in the Swedish bank in 1900 would have been worth about £20m by 2009, a rise of 1.9m pc. General Electric could manage only an 843,000pc rise.

And if you think the fruits of this astonishing return were limited to an elite club at the bank, you would be wrong.

Handelsbanken has an almost religious devotion to Oktogonen, its profit-sharing scheme. ...Every employee receives an equal share of the bank’s profits as long as it makes a return on equity greater than the average of its peer group.


..branches ....scrutinise [head office] costs. If they are not happy...they make sure the head office ups their game...



The money is then used to buy Handelsbanken shares for each staff member but these can be accessed only when employees reach the age of 60. This ultra-equitable approach means the bank teller whose career is spent cashing cheques will receive the same payout from Handelsbanken on retirement as its chief executive.

Afew other differences:

- It does not pay bonuses, with the exception of a small number of staff in its investment banking arm;

- It has no financial plans;

- The bank sets no sales targets for staff;

- It does not set out long-term goals and has no central marketing budget;

- Even its largest corporate customers must still bank with it at a branch level, and it has no credit scoring system.

...Anders Bouvin, UK chief executive explains....branches decide the costs of the head office. They scrutinise our costs. If they are not happy with the service, they make sure the head office ups their game...[or]...go elsewhere. The branch manager is the king of the bank,” he says.

Read the full post here.   Read more about the unusual 28 year career of Anders Bouvin, here.


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Deb Nystrom, REVELN's insight:

This is a companion article, featuring the graphic shared by Niels Pflaeging on LinkedIn who mentions that  ...."companies like Handelsbanken have ....value creation and informal structures [that] are far more well-curated and developed than in command-and-control organizations."

~  Deb 

Deb Nystrom, REVELN's curator insight, February 18, 2014 8:11 PM

Sometimes numbers can be a trap.   This is one of two posts featuring this unique, profitable bank that has outperformed MANY competitors.  ~  Deb

Scooped by Deb Nystrom, REVELN!

Costco's Profit Soars As Low-Wage Competitors Struggle

Costco's Profit Soars As Low-Wage Competitors Struggle | Change Leadership Watch |
At a time when other retailers are struggling to get people into stores, Costco is enjoying a moment in the sun.

For its part, Costco, or at least many of its officials, would like to see the company's practice of paying employees well put into law. The company’s CEO, Craig Jelinek, said earlier this year that he supports President Barack Obama’s proposal to raise the minimum wage, even arguing that lawmakers should boost it to $10 per hour.

Deb Nystrom, REVELN's insight:

Membership fees and merchandising, two central parts of Costco's business model, are built upon good wages, an average of around $45K to Sam's Club $17K.  No wonder there are staffers at Costco that have been there over 5 years compared to the churn at other much lower wage competitors.   Henry Ford anyone?  ~  D

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