RBC and the MicroFIT Program

Description

In 2010, RBC Financial Group (RBC), a banking and insurance company headquartered in Toronto, Canada, had implemented a new loan program. The program targeted clients who were seeking loans for the installation of electricity-generating solar panels on their property under a new government-sponsored green power program, the Micro Feed-In Tariff Program (microFIT). For RBC, the loan program was an excellent fit with the company’s strategy to support environmentally-focused initiatives. However, by October 2010, microFIT was encountering problems. Once the banking business unit at RBC had sold the loans to a client and the client had installed the solar panels, the insurance business unit at RBC was then cancelling the client’s insurance policies due to the increased risk posed by the installations. Customers were confused and upset. How should RBC handle this difficult situation? How could the company prevent similar problems with future program implementations?

Learning Objective

This case can be used in an undergraduate course on strategic management. It may also be useful in a discussion on organizational structure and communication within courses on principles of management or organizational theory. Using a strategic implementation framework (e.g., the McKinsey 7-S Framework), students will be able to do the following: ·Analyze the causes of misalignment in strategy implementation. ·Develop a response to the misalignment. ·Create a plan to reduce the risk of similar situations happening in the future.

Keywords

banking green energy Insurance