In the business world sometimes you would need to provide negative feedback. It is not very pleasant. In this article I will discuss negative feedbacks in more details.
Mr. To demonstrated good communication skills while performing his duties within the marketing division. His ability to listen to the bank’s new clients (small and medium enterprises- SMEs) and convey to his colleagues clients’ needs for financial funding was demonstrated in the successful implementation of Vietcombank’s micro-credit program supporting SMEs, particularly in private sector.
Mr. To effectively interacted with the project finance division and clearly explained SMEs’ concerns on mandatory collaterals in applying for banking financing. Thanks to his efforts in passing feedback from SMEs, the rigid financing procedure in which financing decisions had been based on the collaterals rather than on the feasibility of business plans was removed. Mr. To exhibited ability to smoothly communicate across the bank’s channels while maintaining good relationships with SMEs, which became the key client segment of Vietcombank in the reform to diversify investment portfolios and reduce credit risk.
Though sometimes digressing from his core duties, Mr. To was quite knowledgeable of the scope of work activities expected of him. Within the realm of client segmentation, he properly analyzed characteristics of the two key client segments and researched their needs of financial support from Vietcombank. For example, based on researches, Mr. To pointed out that monopolistic state owned enterprises had long term investment projects guaranteed by the Government (low risks, questionable feasibility), possessed sufficient collaterals for the loans but were under poor management models. Contrary, small and medium enterprises (SMEs) in private sector had feasible business projects, owned insufficient collaterals for the loans (poor financial backup) but they followed flexible and efficient business strategies and management models. The client segments’ profiles Mr. To had developed were useful for the bank’s management to streamline credit policies in favor of SMEs, which led to diversified customer bases of Vietcombank and better credit facilities for SMEs.
As a matter of fact, it was difficult at times to distinguish the job responsibilities from those of consumer segmentation research and those of policies and strategies development. Mr. To is a strong advocate for the development of the private sector and SMEs. He initiatively recommended a number of policy reforms to facilitate credit procedures for SMEs; yet, many of them could not be applicable given serious loopholes in the banking legal system of Vietnam. Recommending policy reforms is beyond the scope of his actual job responsibilities; this focus is the core duties of the strategies development division. Instead, Mr. To should have fully focused on the regular update of clients’ profiles, and intensively researched on newly established enterprises as the third potential consumer target of the bank. If he had recognized this segment’s potential, Vietcombank might not have lost 8% of revenue (concerning this segment’s banking activities) to the bank’s competitors in the first half of this year.
The broad needs of corporate clients marketing demand strong risk management skills and sufficient legal understanding in order to be successful. At times when the needs of clients or other divisions of the bank involved the application of existing legal regulations or extensive risk analysis, there was a shortcoming of technical knowledge by Mr. To. Though he had begun efforts to address this by enrolling in additional coursework to enhance his knowledge of the legal system, he still needs further intensive training on risk analysis for improvement.
Potential for improvement
Mr. To is an example of the intern program when it works to the benefit of both the bank and the individual. The program brought in quite qualified candidates like Mr. To who have been given a platform to demonstrate their abilities and knowledge. Based on my personal observations, working relationships, as well as feedback from corporate clients, Mr. To's performance is ranked in the upper one-third of those who are on probation at the bank, and falls firmly within the ‘sustained’ grade. He appears to be comfortable with the expectations ahead. With more training on risk analysis and better legal understanding, Mr. To would be included in the group’ leveled management of the bank.
Mr. To, on the one hand, appreciated my objective comments. He confirmed that my feedback was impersonal, quite concrete and clearly understandable; thus; was useful to him. On the other hand, he also had some feedback over phone on my feedback as follows:
First, concerning technical understanding, my feedback did not focus on specific behaviors. He wondered on what basis I concluded that he needed intensive training on risk analysis. He enrolled in law coursework because of his own interest in the general legal system; yet; he did not think that his legal understanding had been inadequate for his job requirements. He expected that hard data were supported in explaining why he was critical. For example, when, where and how the needs from clients and the bank’s divisions concerning legal regulations application and risk management were not well handled by him.
Secondly, concerning job understanding, he argued that my feed back was not goal oriented and well timed. The recommendations he made concerning credit policies reforms in favor of SMEs geared towards the ultimate business goals of investment portfolios diversification and credit risks reduction. According to him, ultimate goal orientation should have received more emphasis than job responsibilities distinction. He said that as Vietcombank paid too much attention on monopolistic state owned enterprises which already led to high credit risks, it would be more profitable for the bank to facilitate credit procedures for small and medium enterprises (SMEs), particularly those were in private sector, owned feasible business projects and followed flexible management models. He also argued that the loopholes in the existing legal banking system were somewhat uncontrollable and if Vietcombank waited until the general legal corridor became perfect (with low systematic risk) to start any policy reform, the bank would be left far behind by its competitors given severe competition among commercial banks in Vietnam. He insisted that certain policy reforms could have been practically carried out at low inherent risks regardless of the legal loopholes. Furthermore, my comments that he should have targeted newly established enterprises as the bank’s third potential client segment should have been given to him in time so that marketing efforts would have been done properly. In addition, he questioned whether I had sufficient supporting data to conclude that the bank’s lost revenues would have been avoided if he had focused marketing researches on the newly established enterprises.
On the one hand, Mr. To’s feedback had its own merits, particularly concerning a more proper timing of my feedback. On the other hand, his argument contained certain flaws. His duties have been to research on client segmentations, to develop client segments profiles and analyze clients funding needs. His outputs are then the inputs for the credit strategies division to develop credit policies and strategies. Thus, I did not agree with him on his ultimate goals orientation emphasis as an excuse for his overlapping on others business functions, and for his digression from actual job duties. Furthermore, I believe that his recommendations to reform a number of the bank’s credit policies without carefully considering different aspects of the reform impacts such as additional risks on the bank, conformity of the reformed policies with the current legal system, etc. were bold but invalid. Easing regulations would bring about more business and also more risks, which sometimes unbearable for a conservative state owned bank like Vietcombank. Mr. To was quite aggressive in linking his research on marketing segmentation with his recommendations on policy reforms which took advantage of the loopholes in the banking legal system. For instance, in order to increase credit volume, he proposed to provide long term loans for SMEs without any collateral, which was against the cautious discipline speculated in the banking law. In this area, Mr. To obviously needs more intensive training on risk analysis and better understanding of the legal system.
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