Case study 14.2 a Direct Banking Direct Banking is a successful Dutch telephone and internet bank that serves customers across much of Europe. It is a wholly owned subsidiary of a large international bank, but since its launch over 10 years ago, the parent company has allowed Direct Banking considerable autonomy. Over that time, Direct Banking has developed an organizational culture that values the customer and focuses everybody's attention on delivering exceptional customer service. Service centre staff, for example, are not restricted to narrow ‘scripts’ when talking to customers and are encouraged to develop relationships with them in order to help them identify and satisfy customers’ needs. Over 85% of Direct Banking's customers have recommenced the bank to their friends and family and the quality of its communication with customers has been a major factor contributing to its success, Over the last 12 months, costs have risen faster than in any other period in the bank's history. The parent company has responded by appointing a new CEO and tasking him to grow profits. Soon after taking up his appointment, the new CEO informed his management team that he wanted to introduce voice activation and routing as a way of radically feducing staff costs inal its service centres. He argued that voice automation could be used to drive down costs by using speech recognition-based technology to analyse inbound calls to identify callers, why ‘they were calling and what kind of transaction they required. In those cases where full automation of the transaction would not be possible, he suggested that partial automation could provide an intermediate solution by collecting routine data, such as account numbers and the service required, and routing the call to a specialized agent who could complete the transaction. The new CEO was a champion of technical innovation in the parent bank before he was appointed CEO of Direct Banking, but he has had no experience of running the kind of service-oriented brand that is the central plank of Direct Banking’s strategy. ‘The new CEO feels under pressure to deliver higher profits in the shortest possible time and he has approached you for advice about how he can best achieve this aim. ‘+ With reference to Beer's (2001) typology of change strategies, what kind of change strategy is the new CEO seeking to implement? ‘* In order to achieve the goal of delivering higher profits, what are the issues that will require special attention? ‘+ What advice would you give to the new CEO?