The Jyske Bank Group is managed and operated as a business. At the same time, we attach great importance to treating our three groups of stakeholders-shareholders, customers and employees-with equal respect. This is illustrated by three equally big overlapping circles which must remain in perfect balance. If the balance shifts in favor of one or two of the groups, this will be to the long-term detriment of all the groups. -Jyske Bank Management Philosophy
In 2003, Jyske Bank Group's primary operations consisted of Jyske Bank, which was the third largest bank in Denmark after Den Danske Bank and Nordea's Danish operations (see Exhibit 1). Jyske Bank was created in 1967 through the merger of four Danish banks having their operations in Jutland, Jyske being Danish for "Jutlandish." Jutland was the large portion of Denmark attached to the European mainland to the north of Germany. Until the late 1990s, Jyske Bank was characterized as a typical Danish bank: prudent, conservative, well-managed, generally unremarkable, and largely undifferentiated.
Beginning in the mid-1990s, Jyske Bank embarked on a change process that led to its no longer being characterized as either unremarkable or undifferentiated. By 2003 its unique "flavor" of service made it a leader in customer satisfaction among Danish banks (see Exhibit 2). At the heart of these changes was the bank's determination to be, in the words of one executive, "the most customer-oriented bank in Denmark." The bank achieved its goal by focusing on what it called Jyske Forskelle, or Jyske Differences.
At the onset of the twenty-first century Denmark had a population of approximately five million. A member of the European Union retaining its own currency (the Danish Kronor, DKKl), Denmark was the southernmost of the Scandinavian countries. Denmark had been a wealthy country for hundreds of years. This was originally due to its strategic location in the Baltic Sea (see Exhibit 2) enabling it to extract tolls from merchants who were forced to sail within cannon range of its shores. More recently, much of Denmark's wealth came from high-value-added goods such as agricultural products, pharmaceuticals, machinery, instruments, and medical equipment, in addition to a highly-developed service sector including shipping.
Following the Second World War, Denmark adopted a social welfare system its government described as follows:
The basic principle of the Danish welfare system, often referred to as the Scandinavian welfare model, is that all citizens have equal rights to social security. Within the Danish welfare system, a number of services are available to citizens, free of charge.... The Danish welfare model is subsidized by the state, and as a result Denmark has one of the highest taxation levels in the world.
Jutland was physically separated from Denmark's capital, Copenhagen (see Exhibit 2 for a map). Copenhagen, with a population comprising almost one-quarter of all Danes, was located on the island of Zealand (Sjaelland). Jutland's isolation from the capital prior to modem transportation led to its people being characterized differently from their Zealander neighbors: Jutlanders were supposed to be honest, unpretentious, egalitarian, open and direct in their communication style (candid), commonsensical, frugal, sober-minded, and relatively unsophisticated, at least in contrast to those, as one Jutlander put it, "slippery people from Copenhagen."
Jyske Differences stemmed from Jyske Bank's core values. These stood as central tenets, guiding virtually all aspects of the organization's life. As one manager pointed out, the values were consistent with the bank's Jyske heritage: "Really, when we started talking about our core values, and their Jyskeness, we just became overt about values we had long held." Jyske...