Transforming TSB Group (B): The First Wave (1989-1991)

In 1989, the new Chief Executive of TSB Group's retail bank, Peter Ellwood, launched a massive reorganisation of the bank's operations that resulted in the Bank's operating profit more than doubling over a period of two years. The case describes the five projects involved in this change effort, including the relocation of the Bank's head office and with a particular emphasis on the overhaul of the Bank's branch network. This "network redesign" project involved the creation of clusters of branches, which would be supported by "customer service centers" handling much of the back office work, previously performed in branches. This transfer of activities led to significant economies of scale and allowed a redundancy programme that constituted at the time the largest downsizing in the British Banking sector. The Bank also invested heavily into revenue-generating initiatives, including the creation of an expert system supporting the sales process. All these changes had a major impact on the role of branch managers.

This case is a second of a four-part series examining various aspects of TSB Group's restructuring. It highlights the multiple facets of the bank's very successful process redesign effort, both from a content point of view (including considerations on the role of Information Technology, structure and systems), and from a process point of view (who did what, when). The case can be used on its own, or in combination with the series' (A) case (which provides more background on the company and the industry), the (C) case (which focuses more specifically on the management of