The Kaupthing Bank was nationalized after the complete bankruptcy of Iceland. The Icelandic currency was also subject to high inflation and past exchange rate fluctuations in the past. Accordingly, Icelanders had mostly financed all credits for house or car purchase with foreign currency (often in dollars or euros). After the Crash (Iceland had so-called “turbo-capitalism”), the high-risk assets of Kaupthing Bank and two other large Icelandic banks were transparent and had become insolvent overnight.
The banks were nationalized, and the Kaupthing Bank decided to make a radical experiment. All managers who had the least to do with personnel management
were fired on the spot; the Bank wanted to introduce a new system of values, which would expand to all departments and eventually create a new organizational
culture.
Intervention:
As a first step, the System of Logical Levels of an Organization and the Value-Driven Leadership System were both introduced in various workshops. In team workshops based on VDM, all team values were collected, made transparent, and elaborated on.
Consequently, further measures were developed. All value systems of sub-departments were collected from bottom to top; a new vision and identity for the entire bank was developed andsetagain from top to bottom with the Logical Levels model of a company.
Results/Effect:
Today, the Kaupthing Bank works according to clear guidelines and has developed a system of values, which are not just in the executive suite on paper, but also familiar to each employee, so these values can also be implemented in daily business.
The employees are highly motivated, which appears directly as they interface with customers, who have gained confidence in the bank and once again invest money. The Kaupthing Bank is once again quickly approaching privatization.
Image Source: Jóhann Heiðar Árnason — Own work, CC BY-SA 3.0, Link