Bank of America 2000 Annual Report Download - page 11

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Executing this strategy requires a company-wide shift away from a focus on merger transitions toward a disci-
plined focus on improving customer service and reengineering our work processes. This transformation has not been
easy, but we are confident that it is producing the right organizational model for the future growth of our company.
Investing in Growth Our greatest challenge in 2000 came in the form of a question: How could we make
needed investments in high-growth businesses while at the same time work to deliver on the earnings goals to
which we had committed? Our decision – to eliminate 9,000-10,000 positions, mostly in the middle management
ranks – was a difficult one for many reasons, most importantly the loss of many talented, loyal associates.
Nevertheless, this was the right decision for the long-term strength of the company.
This action has flattened our management structure so that senior managers are more directly responsible for
customer satisfaction. In addition, it enables us to respond to changes in the business more quickly. Finally, the cost
savings realized can be invested in high-growth areas of the company. As we assessed our company post-transition,
we identified and addressed several areas of significant opportunity, including:
Consumer Products, including Cards: accelerating the application of Web technology in call centers and in
payments processes and promoting cards and card usage as a core relationship product;
Consumer Banking: increasing the number of consumer bankers in key urban markets and accelerating the
application of Web technology in banking centers;
Asset Management: adding 10 Private Bank offices in high-potential markets and expanding investment
products and sales forces nationwide;
e-Commerce: investing in new technologies and capabilities to create financial portals, Web-enabling
businesses and implementing more Internet payment options;
Investment Banking: adding people, heightening capabilities and expanding our presence in Europe; and
Brand: conducting a $100 million major national campaign to promote the Bank of America brand.
Executives in the first three areas – Consumer Products, Consumer Banking and Asset Management – have been
charged with working together to broaden and deepen all their customers’ relationships with the bank. Processes
and technology solutions are being designed and implemented to integrate business practices across all product
groups so that broad, deep relationships are formed not as heroic exceptions to the rule, but as a matter of course.
Corresponding performance measurements and incentives are being put into place to reinforce this initiative.
Accelerating Productivity Process improvements will enable us to achieve productivity gains with the goal
of creating greater revenue wherever they are deployed. Teams throughout the company have been empowered by our
leadership to reexamine every aspect of how and why we perform our work – from the customer’s point of view.
Some teams already have produced impressive results: one group reduced processing time for a consumer real estate
loan by 24%, on top of previous improvements that had produced similar reductions the year before. And we expect
similar improvements in performance from many other areas.
While we expect to realize productivity gains as a result of process improvement, cost savings is a secondary
concern if we can increase revenues by improving customer satisfaction. The reason is obvious: there’s more than
one way to generate higher earnings, and the best way is through increasing revenue and operating leverage, which
is a hallmark of a growing business, rather than through expense cuts, which is the hallmark of a consolidating
business. We believe that if our customer satisfaction improvements result in the kind of revenue increases we seek,
we will be able to increase efficiency without cutting costs.
Looking to 2001 We will continue to aggressively execute the tactical initiatives that will drive our corporate
strategy forward in 2001. We also will continue to create innovative new products, services and financial solutions
for all of our customers and clients, some of which are covered in detail on the pages that follow.
I hope you’ll take the time to read about how we’re working to make Bank of America a growth company – and
please let us know how you think we’re doing.
Kenneth D. Lewis
President and Chief Operating Officer