| Abstract Text: |
James Mwangi, the CEO of Equity Bank, a microfinance services provider, oversaw a remarkable turnaround at his organization beginning in the early 1990s. Mwangi's association with the bank began in 1992, when a founder (who was also a family friend) urged him to deposit his savings in what was then a struggling indigenous enterprise called Equity Building Society (EBS). Mwangi agreed, both to help keep a Kenyan institution afloat and because he felt personally invested in its management team. He then watched EBS decline at an alarming rate. In 1994, the Central Bank of Kenya (CBK) found EBS to be technically insolvent with poor management and inadequate board supervision. Equity officials agreed to overhaul the firm's strategy and operations in exchange for avoiding dissolution. In 1995, Mwangi decided to get personally involved in turning Equity around. With several years of experience working for Ernst & Young and Trade Bank, he joined EBS as the finance director, and worked his way up to become CEO in 2004. During his time at Equity, he oversaw its massive transformation from a small, insolvent mortgage lending company, to a fast-growing, internationally recognized financial services bank. Throughout the organization's evolution, it had focused exclusively on Kenya's economically marginalized citizens, the so-called "unbanked" population, who had historically been excluded from formal sources of capital, such as banks, building societies and other regulated financial institutions.
This case asks students to examine what strategy Mwangi and his team pursued. Being able to define and identify strategy is fundamental to the task of the general manager, but often lacks clarity in practice because of confusion about where to begin and what to include. |
