(New) Common sense for a bank, absurdity for society

May 13, 2024
by Noriyuki Morimoto

Organizations exist as accumulations of countless rules and regulations, detailed action procedures, and bundles of slips, forms, and templates that are tedious to fill out. Those rules, procedures, and forms may have been meaningful in the beginning, but become meaningless with the passage of time. Forcing compliance with rules and procedures that no longer make sense lowers productivity, and being forced to perform meaningless tasks erodes work ethic.

In manufacturing, we see many cases of products being delivered that fail to meet standards due to malpractice in quality inspections. However, despite the malpractice, given that no serious problems have arisen in terms of safety, performance, or other substantive quality issues, the real issue is not misconduct but standards of inspection. In other words, the industry should re-examine whether excessive quality standards, unnecessary inspections, etc. are behind the fraud.

Originally, there should have been a meaning behind compliance with quality standards and inspection procedures, such as protection of customers’ interests. However, its meaning is lost due to changes in the environment and other factors, and yet only the rules remain. This happens because compliance for the sake of compliance serves as discipline that maintains the organization. And here is the cause of low productivity.

Banks are a classic example. Banks require customers to submit various documents, fill out complex forms, and affix their seals here and there, before carrying out their complicated internal verification procedures. Although these procedures have the official purpose of protecting the interests of customers, overwhelming importance is given to the aspect of organizational defense, to protect the bank in case of unforeseen circumstances.

Such work that actually lacks real customer benefit not only significantly reduces productivity, but also causes unreasonable inconvenience to customers. The thoughtless practice of meaningless work is a further irrationality that hinders innovation in bank management, as it reinforces the organization through its defensive function. This is what it truly means when we say that common sense for a bank is absurdity for the larger society.

 

[Category /Work-Style Reform]

Profile
Noriyuki Morimoto
Noriyuki Morimoto

Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.