Strategic Change Management Report: CBN and Kotter's Model

This report provides an overview of the strategic change management strategy of the Central Bank of Nigeria (CBN). It analyzes the application of Kotter's eight-step model for change management, focusing on the initial six steps: creating a sense of urgency, building a coalition, forming a vision, and communicating the vision, removing obstacles and creating short term wins. The report examines both internal and external factors influencing the CBN's change initiatives, including stakeholder analysis and the identification of change events. It also explores the CBN's approach to monitoring, improving, and evolving its strategies. Furthermore, the report discusses the relevant tools and techniques used by the CBN to communicate its vision and overcome resistance. The report concludes with a summary of the CBN's efforts to achieve strategic change, including the establishment of short-term goals.

Running head: STRATEGIC CHANGE MANAGEMENT
Strategic Change Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report gives a brief overview of the development of a change management strategy of the
Central Bank of Nigeria.
In order to do this the initial six steps of Kotter’s model for change are considered. Based on
the model, the Central Bank of Nigeria can draw a link in terms of creation of sense of
urgency, building coalition, forming a vision and communicating it with the use of relevant
tools and techniques. The report also discusses about the removal of obstacles faced by the
bank and the creation of the short term wins based on last two steps described by the model.
Finally, this report ends with a proper conclusion.

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Table of Contents
Introduction:...............................................................................................................................3
Development of Change Management Strategy........................................................................4
Creation of Sense of Urgency....................................................................................................5
External Factors.....................................................................................................................6
Internal Factors.......................................................................................................................6
Coalition Building......................................................................................................................7
Forming a Vision........................................................................................................................7
Monitoring, improving and Evolving........................................................................................8
Monitoring..............................................................................................................................8
Improving...............................................................................................................................9
Evolving.................................................................................................................................9
Communicating the Vision........................................................................................................9
Removing Obstacles.................................................................................................................12
Create Short Term Wins...........................................................................................................14
Conclusion................................................................................................................................15
References................................................................................................................................16

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TASK 1
Introduction:
The report gives a brief overview of the development of change management strategy
of an established organization. Here in the report the organization chosen is the Central Bank
of Nigeria. Thus, the report has a brief description about the bank, its stakeholders and the
development of the change management strategy. The report then draws a picture on the first
six steps of Kotter’s model and to what extent the chosen organization aligns its strategies of
change based on the proposed model. There is discussion of the external and internal factors
of the Central Bank of Nigeria that is responsible for creation of urgency. The report also
focuses on the identification of the change events for the bank and analyzing of the attributes
and characteristics for coalition building. There is also focus on identification of the goals
and broader strategies of the bank in the light of forming a vision. Further, there is a detailed
analysis of evolving, improving and monitoring of the strategies for change management
undertaken in the context of the bank. The report also gives a brief overview of the relevant
tools and techniques used by the Central Bank of Nigeria for communicating the vision. The
report also discusses about the removal of the obstacles by the Central Bank of Nigeria
through the identification of resistance from potential risk and various stakeholders that is
associated with the process of change. Finally, the report speaks about creation of short-term
goals of the Central Bank for the realization of the strategic change in management and ends
in with a proper conclusion.

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Development of Change Management Strategy (in consideration of Stakeholders)
The company chosen here is the Central Bank of Nigeria. The establishment of the
Central Bank of Nigeria dates back to 1958 under the CBN act but the commencement of its
operation began on first of July1959. The primary regulatory objectives of the bank as per the
act was the maintenance of country’s external reserve, promotion of stable financial
ambience through proper monetary supply and act as a financial aid as well as advisor to
federal government. The end of the imperial rule saw the government in a proactive state
especially for economic development. Thus, such desire of the government remained fulfilled
by the bank that provided aid to any shortfall in the allocations of credit for the real estate
sector (Ovat 2012). Soon the bank also got involved in lending financial help to the
customers through various commercial banks. However, government remained actively
involved in building the equity centers and nations money through the help of Central Bank
of Nigeria. The government also ensured the formation of the securities regulatory board and
introduction of instruments related to treasury of the capital markets.
The stakeholders of the Central Bank of Nigeria includes other commercial banks,
insurance firms, various regulators, development experts and partners, government and public
sector institutions, telecommunications/technology firms and other financial
institutions(Madawaki, A., 2012).
The present scenario is becoming increasingly challenging and complex for the
Central Bank of Nigeria (Adeniji, Osibanjo and Abiodun 2013). The bank has not only
become targets of cyber attacks and but also suffers regulation on staff planning based on

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increased budget constraints and demographics. In addition to this, there has also been a
change in the mandates of the Central Bank.
However, studies have shown that integration of risk management at the early stage of
annual plan and strategic plan development can be beneficial. The functions of the risk
management that aligns with the day-to -day business procedures can lead to important
insights for the people responsible for the strategic planning process (Achumba, Ighomereho,
and Akpor-Robaro 2013). However, the forward-looking nature of the strategic planning
process is necessary to identify areas of potential risk in future. Thus, it is very important for
the integration of risk management with strategic performance and planning management for
ensuring better management of the Central Bank’s reputation and business risk.
Creation of Sense of Urgency (Evaluation of the Internal and External Factors of The
Organization)
What is Sense of Urgency?
According to the model proposed by Kotter, the first step involves creation of
urgency. Thus, for a change to occur it requires involvement of the whole organization. This
leads to the creation of initial spark for motivating and driving things into action (Appelbaum
et. al 2012). Creation of urgency does not only involve showing the people the poor statistics
of sales or speaking about enhanced competition but it also leads to convincing and ensure
honest conversation with the competitors about the whereabouts of the marketplace. Thus, if
there are quite a number of people who considers the change then based on it the urgency can
be built and thereby necessary actions taken. Therefore as per Kotter there are few guidelines
that need to be followed for the creation of urgency. These are as follows:
(1)Identifying the potential threats and developing scenarios that portray the happenings of
the future.

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(2)Examining opportunities that could have been or should have been exploited
(3)There should be discussions that should include convincing and dynamic reasons to
motivate people to think or talk
(4) Requesting the support of the outside stakeholders, customers and industry people to
validate the argument related to change.
External Factors
Applying Kotter’s theory, the sense of urgency in the Central Bank of Nigeria
identified through the the external factors. Here, the external factors refers to the impact of
environment on business processes, strategies, visions and missions of the bank (Irefin,
Abdul-Azeez and Tijani 2012). However, the business of an organization operates within a
bigger framework of external environment that not only enables shaping opportunities but
poses potential threat to the organization. However, for the banking sector the external
environment comprises of a cluster of complicated, fast changing and noteworthy interacting
organizations responsible for affecting the company’s ability to deal with the customers.
Thus, business must be aware of the environmental conditions that interfere with decisions of
marketing strategy. Thus, the environmental conditions must include operational challenges,
globalization, economic trend, previous management failures and market pressure and
government legislation.
Internal Factors
According to Kotter’s theory, the sense of urgency in the Central Bank of Nigeria
identified through the evaluation of the internal factors. The internal factors include that have
a significant impact on the profitability of the Central Bank of Nigeria are asset quality ratio,
liquidity ratio, management efficiency ratio and capital ratio. These factors influenced by the

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management decisions of the bank (Onuonga, S.M., 2014). The asset quality ratio represents
the evaluation or review of accessing the credit risk in accordance with the asset chosen. On
the other hand, the liquidity ratio refers to the measurement of ability of the company for
paying its debt obligations and its safety margins through metrics calculation that includes
quick ratio, current ratio and operating cash flow ratio. The efficiency ratio is the
measurement of the bank’s capability in using its liabilities and assets internally. Capital ratio
measures the level to which Central Bank of Nigeria finances operation through the issue of
shares and profit retention calculated as a percentage of its assets.
Coalition Building (Identifying Change Events and Analyzing their Characteristic and
Attributes)
According to the Kotter’s, formation of an effective coalition involves step 2 of the
change model. Therefore, for a strategic change movement it is very necessary to make
people believe in the importance of change (Mou 2013). This first step towards the process is
to identify the stakeholders of the company. Thus, for Central Bank of Nigeria it is necessary
to identify the government and public sector institutions, telecommunications/technology
firms, regulators, other banks and insurance firms who pose as stakeholders. Then the next
step involved is to identify the emotional commitment from them. There should also be
efforts on effective team building with identification of the weak areas of the team. The team
involved should also be a mix of good people from various departments of the bank.
Forming a Vision (Developing Goals and Broad Strategy)
In step 4, Kotter focuses on the creation of a vision for undertaking a change. This can
be explained by saying that when an organization thinks of a change in vision there are ample
ideas and solutions that pours in. Therefore, the ideas undertaken for initiating a change in
vision in an organizational structure should be such that they are easily understood by the

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employees. Therefore, in order to do it is very important to determine the values that are
essential for the change (Okafor 2012). Then there should be development of short summary
that will capture the ideas that foresee the future of the company. Further, there must be a
strategy to execute the vision. Additionally, there must also be assurance that the coalition
building is able to describe the vision in no less than five minutes. Moreover, a vision speech
should describe the present scenario of the company.
In this regard, the Central Bank of Nigeria should be inclined and have greater
involvement towards the making of economic policy and implementation that involves
various events from the last financial crisis. This was done in addition to the traditional
functions that involved determining the money supply and interest rates for achieving price
stability, implementation and formulation of monetary policy, supervising and regulating the
financial and banking systems, financial market stability and management of foreign reserves
(Amah and Ahiauzu 2014). Further, the economic crisis has forced the central bank to
implement macroeconomic management policies in various nations. Therefore, in Nigeria it
became crucial to include a governor in the economic management team of Central Bank so
that policies are aligned with the development taking place globally.
Thus, the role that Central Bank of Nigeria plays in a developing economy like
Nigeria is more demanding than the crisis management. The Nigerian economy has a
faltering process of development and lack of professionalism in the formulation and
management of economic policy that justifies the fact that Central Bank of Nigeria should be
involved more actively in matters related to macroeconomic policy (Odior and Banuso 2012).
Monitoring, improving and Evolving
Monitoring:

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Thus, in order to deliver change it is very important to measure and monitor outcome.
However, reporting, and clarity of change is also necessary. Compared to commercial sectors,
Central Bank has less clarity in the metrics related to market share and profit (Agbada and
Osuji 2013). However, a clear discussion on the strategic journey of the Central Bank of
Nigeria with reference to labor division between the department heads and the board
members responsible for setting policies can explain the extent to which Central Bank of
Nigeria show the effectiveness of change and the ways they ensure for valuing their money.
Improving:
For improvement, there should be a thorough analysis of project management long
with the value chain. Therefore, one can see that Central Bank of Nigeria is responsible for
managing multiple activities that are in a way resulting in the performance and improvement
of various processes of the bank (Von 2012). Thus, the details of the conduct of each
department along with the processes and the portfolio of employees responsible are
recognized. The work of the value chain however plays a pivotal role in the management of
the organization through the linkage of tactic and strategic planning, development and
training, risk management, communication, documentation and cost (Peppard and Ward
2016).
Evolving:
The present scenario puts the bank in a position where they consider the strategic
function to be a part of the management structure of Central Bank. However, in this context it
be can be said that the leadership, resourcing, profile and buy-in function is necessary for
further evolution of the strategic functions within the bank (Adeniji, Osibanjo and Abiodun
2013). Now it is matter of time to wait and see as to how the evolution of the strategic
function can further uplift the role of the central bank to deliver sensible practices.

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Communicating the Vision (Relevant Tools and Techniques to Implement the Changes
and Creating an Implementation Plan)
According to Kotter’s model of change step 4 involves the communication of the
vision. The vision must strongly be communicates so that it becomes a part of everything that
is done within the company (Gorran 2013). In addition to special meetings called for
communicating the vision there should be situation when the vision spoken about often.
Further, the anxieties and concern of people addressed honestly and openly. Thus, the vision
must reflect in all aspects of the operation that ranges from reviews of performance to
training.
Thus, if the scenario of the Central Bank understood in this context it is important to
identify the tools and techniques. Therefore, the tools and techniques for implementation of
changes are as follows:
Making of the Strategic Plan
The strategic planning considered a very effective framework when the Central Bank
of Nigeria is undergoing changes that are not only institutional but operational. Therefore,
strategic planning enables the bank to deal respond to opportunities, challenges and emerging
trends (Quirke 2012). The bank must devote time to ensure that the set objectives are
practical enough and are in alignment with the departmental strategy of the Central Bank.
Effective Implementation across Institution
There is criticality in deriving a strategic vision based on institutional objective; the
impact of the change depends on its implementation compared to the formulation of the
strategies. In order to do this, a requirement of departmental goal is necessary that must be
aligning with the strategic objectives. Implementation refers to the measurement and
evaluation of the strategies along with them being operational (Swayne, Duncan and Ginter

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2012) . Here, focus is on measuring matrixes, communication, organizational values, culture,
and the dynamics of the team.
Role of Human Resource (HR) in the Change
However, for communicating the vision the HR plays a vital role. Thus, in Central
Bank of Nigeria the function of HR should be to provide aid in the process of planning thus
ensuring that people not only have experience but they also have the right amount of
knowledge and skills as per the strategic plan of the organization(Bratton and Gold 2012).
HR strategies should therefore be in accordance with the overall corporate strategy.
Generation of Strategic Communication
The successful implementation of the strategic change is only possible when the entire
organization is well informed. The message must therefore be tailored and not only well
constructed for delivery. Thus, the task for of the planners does not end with the
implementation of the change but also remains in its proper implementation. This is
important because any kind of uncertainty among the staffs may create a hindrance in the
implementation of the plan (Zafar and Afzal 2014). Therefore, it is of utmost importance to
the Central Bank of Nigeria to undertake communication strategies as a part of their
management and planning process.
Ensuring Engagement and Leadership
The Strategic change management is not just a mechanical process but is also an
emotional process. Thus, the change can be at times be stressful for the staffs of the Central
Bank of Nigeria if the vision remains unclear to them (Alhazemi, Rees and Hossain 2013).
Therefore, the necessary step for the leaders of the team is to boost the enthusiasm and