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from the financial crisis. The strategies and tactics for new business may already be appropriate and working well. However, it is certainly possible that major changes still need to be made.

Sell off the viable noncore units. Most of the large banking groups own some units that do not have close ties with the rest of the organization. These should not be retained within a nationalized bank for longer than necessary to obtain a reasonable price. If this will take many years, it may be necessary to accept a fire sale price today. A nationalized bank will be very difficult to run, more difficult than one in the private sector. It makes sense to simplify wherever the price for that simplicity is not exorbitant.

Keep an eye on the eventual sale. Managers run a company differently when it is clear that it will be sold eventually. Some of these actions are gimmickry which should be avoided, such as cutting necessary expenses when the damage will not show until after the sale or taking more aggressive accounting or tax strategies that would store up trouble for the future. However, many of the choices reflect a legitimate recognition that the new owners may wish to run the company differently than it would be run on a standalone basis. It may not make sense to implement certain actions that would pay off in the long run if the bank stayed independent, but which might need to be reversed or aborted under a different owner. In general, there should be few new initiatives that aim for 5year results, unless the strategy is so basic that it would make sense in almost any scenario.

Step 13: Implement the new plan Most people in business would agree that it is harder to implement a plan well than to design a good one in the first place. First, a strategic plan must necessarily be at a high level of generality, leaving the question of how to accomplish the goals to the managers themselves. Second, conditions change. The economy and financial markets swing; competitors respond to your moves or make their own; customers alter their own behavior; etc. Third, strategic plans are almost invariably flawed in some respects. The best that can be done is to hold down the number and scale of the imperfections. Inconsistencies, wishful thinking, ignorance, and power plays work their way into the plans, making it impossible to fully achieve the goals.

Long books are written on how to achieve the goals in a business plan, so it is pointless to attempt a definitive discussion here. However, there are a few key points that are specific to a nationalized bank, including:

Channel the political inputs. It is legitimate for our political leaders to express views on how a nationalized bank should operate, but there is also huge potential to create problems if handled inappropriately. The wrong approaches would invite graft and political favoritism. Even without these more extreme problems, political interference could create inefficiencies, confusion, and the waste of resources. Ideally all political inputs would be channeled through the government entity that acts as the controlling shareholder, which would then communicate with the CEO and designated highranking officers. Others at the bank should be shielded as much as possible from direct contact with politicians and lobbyists.


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