It has come to my notice about some developments among the general public over the acquisition of two Ghanaian-owned banks: Capital Bank and UT Bank Ltd. As an emerging organizational strategy consultant, I am disheartened about the development [especially on social media] and feel the urge to pend down some perspectives:
All the issues [including mistakes on the side of BOD and Management] leading to the acquisition notwithstanding, I think there is a good course to celebrate and, that young Ghanaian entrepreneurs should be inspired do much more! Come to think of it, both Capital Bank and UT Bank are banks that were started by local entrepreneurs [who have investments in other industries though]. These are not their last meals!… For me, it’s such a great achievement for someone to have built something from scratch to the extent that, even though, they are in distress, much bigger institutions are willing to tap into the opportunities they have built. Just think about that…!
Permit me to share a few perspectives:
LESSON I: AS AN ENTREPRENEURIAL FOUNDER, YOU MAY NOT NEED TO OWN 100% OF YOUR COMPANY FOR EVER!~
There is a problem in this country! Entrepreneurs like to own a 100% of their companies. People are just not willing to share! Founder, CEO and majority share sounds too nice for some businesspersons. Even when there are clear signs of collapse, they will prefer to die with their enterprises than to share and get it going. Sometimes companies collapse because the founders are not just willing to give out their shares to those who can rescue them. As a entrepreneur, you don’t always have to own MAJORITY shares in the company you founded! Spend your time and energy to build but when the time comes for you to sell, please never hesitate. Again, you don’t need to own majority shares till you die!
LESSON 2: FROM SMALL TO GREAT!
UT Bank and Capital Bank in my estimation are amazing success stories! Why do I say so? To build a company from scratch and for a larger firm to have an interest in acquiring makes it [though facing some liquidity challenges] a HUGE SUCCESS story. This is great news! Whichever way you look at it, the two banks have contributed to GCB’s much much bigger capacity now. They can do much more bigger transaction than ever!
LESSON 3: A COMEBACK IS POSSIBLE!
Do you know that there is a possibility that either William Ato Essien or Capt. Amoabeng can stage a comeback to acquire GCB in the future? I beg you, please be open in your thinking! Anything can happen! This development is a success story! I am personally inspired by these two institutions! I don’t know about you!
LESSON 4: GCB IS SEEING OPPORTUNITY!
Is it not interesting that whilst majority of people are ‘weeping’ GCB Bank is seeing a great opportunity in these distressed banks? Amazing eeeeeeh? We must change the way we think in this country about issues! This is not a funeral! It’s a celebration. I can bet that if the information about the distressed nature of these banks had been sold to some of the people who are weeping now, they would have rejected the offer. It’s interesting to note that three companies actually showed interest in acquiring these institutions. Now, let me ask you: Who wants to buy failure? Nobody does. We buy things that have future potential, isn’t it?
LESSON 5: IN MOMENTS OF DISTRESS, SOMETIMES YOU CAN SAVE THE SITUATION, OTHER TIMES, THE BEST OPTIONS IS TO SELL IT OUT!
Let me draw your attention to a current global development.
About two years ago, according to gobankingrates.com, “JPMorgan Chase, one of the nation’s largest banks, planned to closed down 300 branches over the next two years, equating to just over 5 percent of its 5,720 locations in the U.S. The move was part of the bank’s plan to cut costs, which — along with other measures — will save JPMorgan Chase $1.4 billion. This decision was necessary to save the bank from a disaster! Got it? By number of branch locations, Chase Bank is second only to Wells Fargo, which has over 6,300 U.S. branches as reported by the FDIC. Failure of a bank results when there are no strategic and aggressive moves by BOD and management to address the situation immediately! According to the Bank of Ghana, a lot of possible ways had been explored to the extent that, the last and the most appropriate was to sell the bank. So, why are folks sad? What’s your problem? In business, sometimes, the best strategy may not always be the most preferred by the majority but it makes sense in the long run. Selling is not a bad thing! Please answer me: Haven’t you sold an asset of yours when you were in a tough situation before? Why do you mock or castigate someone when you have not even done a even less than a quarter if what he has done?
LESSON 5: BUILD SOMETHING GREAT FOR OTHERS TO ACQUIRE OR HAVE AN INTEREST IN ACQUIRING…
Finally, I strongly believe that each of us should be asking yourselves whether we can also build something for other bigger institutions to have an interest in acquiring. That should be our concern and not to cry for Amoabeng and Ato Essien. The founders of Capital Bank and UT Bank have paid their dues. What have you build or are you building? I rest my case!