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  • Writer's picturePeter Smith

MONDAY 25TH OCTOBER 1999 - Project Redgrave Goes For Gold

Another functional heads meeting with Sir David and Ron Sandler. It looks at the moment that we are just about OK on our '99 commitments to the market in terms of costs, profit and so on, but it is all looking a bit too close for comfort. Hence Ron gives us an "every little bit helps" speech- anything we can screw out of costs will be gratefully received. We should not think a few grand here and there doesn't matter; it might just make the difference.

Then we discuss HR issues and the handling of the GHQ redundancies, or "departures" as we have been told to call them in good Newspeak fashion. Apparently if they are voluntary, they are not officially redundancies, or something like that. We discuss the process for spotting good people whose jobs have gone but might be of value to another area. To be fair to NatWest and our Human Resources people (about whom we all moan, but would not want their jobs for the world), there is a real desire to handle the whole thing as properly as possible. The terms are very good generally, although there isn't a lot of time always for people to consider the various options they may have. But there is no nice way of losing over a quarter of your Head Office staff.

I go straight off to another meeting, with Jim Mann, Mark Fisher, Clive Dench (from our internal software development shop, Retail Information Systems- RIS to its friends) and what seem to be half the partners of Andersen Consulting (AC). Most of them are on the large side; the living must be easy at AC. I thought all these companies had in house gyms and stuff now. Jim and Adrian (the senior AC partner) bring us up to date with what is mysteriously called "Project Redgrave."

Apparently, the project started with a very public-spirited approach from AC to NW along the lines of how they could help us with the bid defence. That was not a surprising approach, given the close relationship and the many millions NatWest has spent with Andersen's over the last few years in areas such as implementation of new financial systems, where Andersen's have done a very good job. A potential opportunity to work together was spotted in the area of "operational implementation", which has not been NatWest’s strong suit recently, but is seen as an Andersen strength. Generally, we have had good ideas and then failed to implement fast enough or well enough. So discussions ranged from opportunities to outsource to AC, through to more conventional consulting support, focusing on this operational area.

The market could see outsourcing at the moment as an admission of weakness, so the preferred (and quite innovative) idea is to look at the option of joint ventures with Andersen. The advantage is that NW could keep control, but AC would take some delivery risk, and would have real "skin in the game." Also, if the JV was successful in doing stuff for NW, it could then offer similar services to third parties, and potentially turn into a profit generator for NW. From a cost centre to a profit centre - the Holy Grail!

While I can immediately see all sorts of issues, it is a very interesting idea. Purchasing is on the list of possible areas, along with IT Operations, RIS, and a number of the Retail Bank back-office areas like Clearing and Cash management. We discuss the project structure and who will do what; I will be working with AC to look at the value potential of the idea. Others will look at the legal details and how the financial aspects could be structured. We need to work intensively for 14 days to assess feasibility in order to be on track to include details in the Day 39 defence document - if we think it looks positive enough to include as a "look how innovative NW can be" point in the defence.

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