Key Points at a Glance

Why do some executives successfully steer a bank through a profound restructuring, while others with equally impressive résumés fail to do so? The answer rarely lies in the individual’s qualities and almost always in how well they fit the role. After all, “transformation” is not a one-size-fits-all job description: building, restructuring, integrating, and realigning each require different qualities.

The five most important takeaways for supervisory board members and owners

Edin Karabeg is a Managing Partner at DELTACON Executive Search, heads the Vienna and Frankfurt offices, and oversees the Financial Services Competence Center for the DACH region and CEE. Before moving into executive search, he spent over twenty years in the banking industry, including approximately fifteen years in executive board and senior leadership roles at European institutions. Two of these positions involved transformations: one focused on growth, and the other on restructuring.

You were in charge of two very different change initiatives. What was the difference between them?

In everything except the word itself. In Bosnia, we built something; in the Czech Republic, we had to fix things up. Those are two different professions. When building something from the ground up, the enemy is market inertia; when turning things around, the enemy is within your own organization. When building something from the ground up, you need people who can tolerate uncertainty and make quick decisions. When turning things around, you need people who can have difficult conversations without becoming cynical. I’ve seen outstanding builders fail at turning things around – and vice versa. That’s why I’m now highly skeptical whenever a job description simply lists “transformation experience” as a requirement. It doesn’t mean anything.

Let’s start with Bosnia: What was the initial situation?

An old, Austrian-style company with few active customers. At its core, it was a savings bank – accounts where money sat idle and not much else happened. Technologically outdated, barely visible in the market. In just a few years, we transformed the bank into a digital brand, with a new brand identity, a new product lineup, and ultimately over 100,000 active customers – and highly profitable. What means the most to me to this day isn’t the number. It’s that we built a team to achieve this – one that didn’t exist in the market before.

How do you get a workforce to believe in something that doesn’t exist yet?

You can’t force it. You can adopt a strategy and get it approved by committees, but you can’t order anyone to look forward to something. And in an organization where little has happened for years, people have already seen several new beginnings come and go. So you need a vision of what that new beginning looks like, and that vision has to be right. After about a year and a half, we worked with the marketing team to produce a video in which the employees themselves spoke. It wasn’t made for the market, but for the organization: so that people could see where they’d been a year and a half earlier and how far the bank had come in that time. It wasn’t a campaign; it was a mirror. From then on, I no longer had to tell the story alone.

Was the team selection right from the start – or were there some miscasts?

No, it wasn’t her. At the beginning, I made several hiring mistakes. The hardest part wasn’t correcting the technical errors, but the fact that some of these people were incredibly loyal to me – parting ways with them was harder for me than any other decision I had to make during that phase. You don’t notice something like that right away. You realize it when the results fall short of your expectations, and then you spend a while looking for the mistake everywhere – except in the staffing decisions. Those initial missteps showed me what I actually needed to be looking for. Without them, the later staffing decisions wouldn’t have turned out as well.

That bank no longer exists. What ever happened to those people?

They hold top positions at other organizations throughout the region. To me, that’s the real proof. You can make the financial statements look good in good years, and an institution can disappear for reasons that have nothing to do with the quality of its operations. But if the people you selected ten years ago and entrusted with responsibility are now serving as board members and division heads elsewhere, then the selection was the right one. For my work today, that’s the only benchmark that matters: Do the appointments stand the test of time?

How did the initial situation in the Czech Republic differ from that in Bosnia?

It was the opposite case. Significantly larger – the largest store in the group – and, despite several attempts, not profitable enough. The cost-to-revenue ratio was the main problem. We had to cut staff and replace some of them, we had to reposition the store in the market so that the products would actually catch on, and we had to instill a different mindset. The last point was the hardest and the most important. In the end, about two-thirds of the group’s gross profit came from this store.

What was the most difficult part of this transformation?

A conversation with a fellow board member who had become a friend over the years. The bank needed a change at that point, and I couldn’t talk my way out of it, even though I tried. What I took away from that situation didn’t come from me, but from the conversation itself: that as a manager, you’re paid to make the best decision for the company, even if it’s personally difficult for you. That shaped me. It doesn’t make such decisions any easier, but it prevents you from putting them off. And delayed personnel decisions are the most costly thing there is during a restructuring.

You say that investments were the third major point of friction. What sparked that?

It comes down to the basic mechanics: Every investment generates costs down the line, whether as an ongoing expense or through depreciation. In an organization that’s currently working on its cost ratio, this is a contradiction you have to explain anew to the supervisory board every year. The toughest case was when we wanted to move data storage and IT to the cloud. At the time, this was new for both the group and local regulators; it required specific approvals, and for a long time, the discussion centered on risk rather than benefits. In the end, it was precisely this step that transformed the company’s decision-making and implementation speed – and did so more sustainably than many of the measures we agreed on more quickly.

How can a board of directors determine, prior to an appointment, whether someone is capable of leading a transformation?

Not the resume. Almost every resume at this level mentions “transformation.” I ask about the actual situation: What was the most difficult decision, what did it cost those affected, how did you tell them, and what happened afterward? People who have truly led a change tell this story without hesitation and without making it sound like a heroic tale – and usually with a mistake in it. Those who instead talk about methods, phase models, and communication cascades were usually there, but not in charge. You can hear the difference after twenty minutes if you know what to listen for.

What does this experience mean for your work as a recruitment consultant today?

When it comes to transformation mandates, we never start with the search profile; instead, we begin by asking what kind of change is actually needed. Building, restructuring, integration, or market realignment – these are four different tasks requiring four different profiles. We then determine whether the company can handle the role it wants to fill. Only then do we begin the search. This approach is less convenient than jumping right in, but it’s the reason these hires last.

Four types of change – four profiles

Why is DELTACON the right partner for this?

Because we combine two things that you’d otherwise have to purchase separately. One is the methodology of an established executive search firm: direct outreach, assessment, a structured process, and a commitment to the principles of sound executive search. The other is that every DELTACON partner is responsible for the industry in which they themselves have held leadership roles. In the financial services sector, this means: I have personally made and taken responsibility for the decisions we discuss with our clients. That’s why we’ll also point out if the profile being sought doesn’t match the actual role at hand. This distinction is the real reason why supervisory boards and owners turn to us – and it’s what ensures a hire lasts for years rather than just a probationary period.