Chemical Bank Report

Essay by rochitlUniversity, Master'sB+, March 2007

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After a Merger with Manufacturers Hanover Corporation, at the beginning of 1995, the retail bank division of Chemical Bank, named New York Market, faced declining margins, and increased competition in its, among others, credit and deposit gathering and processing business. Thus, Michael Hegarty, head of the Division, oversaw the need for a transformation in his organization.

He wished to transform the bank, into a market-focused organization, that would be a preferred financial service provider to target customer groups. In order to achieve the foregoing, the bank needed huge investments in order to better understand customer needs, identify attractive customer segments, and develop and tailor new products and services.

To achieve the foregoing, the division adapted the Balanced Scorecard to clarify and communicate the new strategy and to identify main drivers for strategic success. These strategic objectives and measures were divided into four perspectives: financial, customer, internal, and learning growth.

The process for implementing the new measurement and management system was crucial, such as on time identification of new adaptations to the system that were not working as expected.

The scorecard provided measures they needed to stay focused on performance, while at the same time enabling the Bank's management to clarify and communicate its vision.


In 1993, Chemical Bank and Manufacturer's Hanover concluded a merging process and launched a metropolitan markets division, which targeted customers and small businesses (under $1 million in sales) in the New York City area. Retail banking was experiencing slow revenue growth, outflows of deposits to mutual funds, increased customer demand for value, and underlying growth in core expenses such as occupancy, salaries and benefits and FDIC. The foregoing factors produced a real profitability squeeze for the retail banking division.

The Bank's new three-pronged strategy involved over 100 main initiatives for shifting...