Charles Kimei offers banking management tips in new book

Dar es Salaam. After keeping a low profile since stepping down as CRDB Bank managing director in October 2018, Dr Charles Kimei is in the news again.

The former banker has authored a book that shows what senior management in the banking industry needs to do so as to take their institutions to the next higher level.

Titled Career, Finance & Leadership, the book emphasizes the need for senior management to focus on diversification of production and distribution systems, as well as on proper implementation of strategies.

He suggests the need to be methodical, empirical and consistent. Board members and chief executive officers (CEOs) should be “conscious about hindsight or outcome bias”.

According to the author, CEOs – especially in banks which are institutions mostly driven by ICT – should seek to know the basics of core banking systems, as well as defining the right vision and mission.

Diversification of production and distribution is the strategy for sustainability, while staying in the same market is the strategy for profit maximization, he pontificates in the book, which was formally unveiled in Dar es Salaam on Friday.

“One must strike a balance; but most CEOs strive to achieve sustainability more than profits,” notes the long-serving banker. Dr Kimei – who is credited with successfully steering CRDB Bank’s turnaround strategy for over two decades – was of the view that if banks are to make profit maximization a priority, they need to concentrate on one big thing that would add to their competitive advantage for a defined period.

Without being methodical, empirical and consistent, he says, the institution would be like a ship with an erratic captain trying to do things he has never done before in the face of a storm. Stressing that positive reinforcement works better than negative one, he says “no creativity or innovation can take place in an institution where leaders act like terrorists whenever someone makes a mistake – or misses a target.”

On the issue of being conscious about outcome bias, he says, decisions made by CEOs should not be judged on the basis of their outcomes but, rather, on whether or not they were made as per sound and acceptable processes – and within approved limits.

On ICT, Dr Kimei urges banks to be on top of any required changes in ICT to cope with globalisation and disruptive tendencies.

“This is the most challenging of all risks within banks now – and it is the most neglected area by the older vintage of CEOs,” he says in his book.

Above all, the right vision and mission is critical because they set boundaries for everything, including risk appetite and policies to limit risks.

The future of the banking sub-sector

According to Dr Kimei, the future is bright – especially given the macroeconomic conditions and digitisation: artificial intelligence/robotics, mobile-based digital financial solutions, block-chain and more of investment banking and advisory.

Bank of Tanzania (BoT) governor Florens Luoga – who was accorded the honour of reading the book before its launch – said Dr Kimei recommends the adoption of strategic control of inflation, as well as a more market-based approach to monetary policy.

Prof Luoga noted that Dr Kimei also advises on the use of the capital adequacy requirement as an instrument of monetary policy to increase credit to the private sector.

“Coming from a person featured with such a rare experience, the wisdom in his cautions needs to be heeded,” Prof Luoga said in a press release made available to The Citizen.

“Dr Kimei has set the pace for all of us to emulate. We must share our experiences, and mould the upcoming generation of banking professionals.” The deputy speaker of the National Assembly, Ms Tulia Ackson, described Dr Kimei as a person who believed in other people’s ideas...

This is because he understands that no single person has a monopoly on ideas… It is on the same grounds that he managed to take CRDB to the next (higher) level.

Dr Ackson – who was the chief guest at book’s launch – said “if an organisation is to succeed, it is very important to recognise that other people can do better than you, instead of thinking that you are the best of all!”