Grit, Guts and Gumption

Rajesh Chakrabarti

Description

This is the story of the carefully planned resurgence of the State Bank of India (SBI) from a laid-back incumbent under threat from private players to a customer-oriented competitive organization that has outperformed rivals despite several constraints. The leadership at SBI succeeded in reshaping perspectives and profitability at the bank, which employs a staggering 200,000 people, not withstanding salary restrictions and regulatory bottlenecks. While the primary thrust was on changing employee attitude towards their own organization and, of course, its customers, the transformation exercise was broad-based encompassing fundamental changes in technology, processes and business-mix alike. In about three years beginning 2006, SBI not only defended its own lair against the siege of younger, leaner, meaner rivals but actually took the battle to the attacker’ domains. SBI’s size and setting make the story an inspiring example to other organizations, particularly in the public sector. Written in a fluid and engaging style, and backed by facts, figures, analysis and anecdotes, the book challenges several stereotypes and dogmas common in today’s management circles.

Sujets

• Banking
• Economie gestion
• Bank
• India

Informations

• Publié par: Penguin Books India Pvt Ltd
• Date de parution: 01 octobre 2010
• Nombre de lectures: 0
• EAN13: 9789352140855
• Langue: English

Extrait

Rajesh Chakrabarti

GRIT, GUTS AND GUMPTION
Driving Change in a State-owned Giant
Contents
About the Author
Dedication
Preface
Foreword
A guide to the book
Prologue
SBI Gets a New Leader
The First Six Months
Yes, Culture Can Be Changed
Building a New Work Environment
Strengthening ICT, the Backbone of Today s Banking
Changing Form to Function Better
Harnessing Strengths to Deliver Results
Gold in the Haystacks
Outrunning the Hares
Consolidating and Communicating
Setting the Bank on a Growth Track
Stocktaking and Making Sense of the Journey so Far
Footnotes
Strengthening ICT, the Backbone of Today s Banking
Stocktaking and Making Sense of the Journey so Far
Epilogue
Acknowledgements
Follow Penguin
Copyright
PENGUIN BOOKS
GRIT, GUTS AND GUMPTION
RAJESH CHAKRABARTI teaches finance at the Indian School of Business, Hyderabad. He has published several scholarly papers in international journals, has authored or edited three books and writes a fortnightly column at the Financial Express . He is regularly quoted in the media, both in India and abroad.
To Nishad and Ranjan
Preface
This book tells the story of how SBI was transformed. It is not a history of SBI. Of that, there are four comprehensive volumes, published by the bank itself; a fifth is in the pipeline. This book only covers the changes that have occurred in the bank since July 2006 when SBI embarked on a conscious voyage of transformation. There too, I have no doubt, that this is an incomplete account. It is impossible to cover all changes, big and small, that took place over three years in an organization of SBI s size. Nor is it possible to give equal credit and coverage to all the departments, groups and individuals that constitute the bank or record every new product and initiative launched during the period. There was no part of the bank that the transformation exercise did not touch. My attempt has been to capture the essence and details of the major thrusts that I believe were key to the transformation exercise.
Why write (or read) a book like this? I think transformations are among the most exciting and challenging issues in management, and the transformation of an organization as mammoth as SBI, within a period as short as three to four years, is simply fascinating. And when it happens within the confining restraints of a public sector organization competing with private players in a rapidly changing market setting, it is sheer drama.
There is more here, however, than just a great story. The constraints of the context that SBI faced are not unique; several public sector organizations face them. It is tempting to point to salary constraints and social objectives to plead no-comparison with private players and justify the downward slide in market share. People understand. At times, a bit too quickly. The SBI story shows that change can still happen, that the public sector staff can rise to any occasion if trusted and challenged, with or without incentives and bonuses, and that there is no room for berating or patronizing public enterprises. To me, the SBI story is a classic example of what the human spirit can achieve, individually and in the collective. And money is scarcely the spark to ignite it. Leadership is about appealing to the dreams, the pride, the identity of the members of a team, however large, and if the leader s passion is authentic and his methods of communication intelligent, it is very likely to succeed.
This is not to say that the SBI story is the formula for success everywhere. Every turnaround experience is unique and context specific. It would be preposterous for me to suggest that the SBI story is directly replicable anywhere else. Yet, there are lessons to be drawn from the SBI experience, at the philosophical level as well as at the execution plane. This is why I have tried to be as detail oriented as possible in chronicling the various initiatives that constituted the transformation at SBI.
The SBI story should be particularly useful to leaders and managers in large organizations, public sector and private sector, who are intent on bringing about significant change in their organizations. It should help leaders reignite the pride of businesses that, once hallowed, seem to have been overtaken by competition and changes in the business environment.
I have deliberately stuck to just telling the story rather than analysing the strategy or its individual elements from a scholarly angle. Such efforts, while very useful, necessarily depend on certain pre-decided constructs, often crystallized from experiences in multiple organizations elsewhere. The approach here is for the reader to interpret the story in his or her own way without me trying to impose a structure on it. Nevertheless, I have done limited analysis and assessment in the last chapter to summarize my views on the subject. There is, of course, room for many other interpretations and lessons from the story.
I have learnt an immense lot about SBI, large organizations, banking, management, and India itself while writing this book. If I have been able to convey even a fraction of that in the pages that follow, I would consider my efforts amply rewarded. Happy reading!
Rajesh Chakrabarti ISB, Hyderabad
Foreword
Changing the trajectory of an enterprise remains one of the greatest challenges of management. When the enterprise in question has to combat the inertia of over two centuries accumulated in a banking behemoth employing over 200,000 people, the experience is arguably one of the most compelling of organizational stories. When that bank transforms itself while staying within all the constraints that public sector banks today face in India vis- -vis their private rivals, the story is doubtless a unique learning in management. It challenges conventional wisdom in more ways than one and counters several widely held stereotypes about leadership, motivation and change management.
The transformation exercise attempted consciously by SBI under the leadership of O.P. Bhatt is truly fascinating and I am glad Professor Chakrabarti has chosen to tell it in detail. McKinsey is fortunate to have been associated with this change almost from the very beginning, to have played a facilitating role in some stages, and to have witnessed the transformation from close quarters. In addition, I have been fortunate enough to know O.P. Bhatt personally and have had numerous conversations with him about the transformation. I am a great admirer of what he has accomplished and I am sure it will stand the test of time.
The credit for the metamorphosis that SBI has accomplished in a surprisingly short period, of course, goes completely to the executives and staff of this great organization. The leadership provided by the top management, led by Bhatt himself, has been key to the change. The transformational initiatives, along with unexpected changes in the environment, have helped SBI cement its position as India s leading bank by reversing its declining market share, by making successful forays into new businesses earlier believed to forever remain the exclusive preserve of foreign banks and new private banks, and by breaking new ground in financial inclusion. But perhaps far more important, it has made everyone-SBI insiders as well as the external world-look at it with the respect that it always deserved and had commanded till very recently.
Above all, the SBI transformation story is a people story. Through a well-planned communication strategy, the bank has succeeded to a large extent in breaking down the centuries-old hierarchies to revive a sense of team play and employee participation. The greatest victory for the management has been to make SBI s seemingly impending loss of leadership status a personal stake for a large number of SBI employees. By firing up the enthusiasm level throughout the organization, the bank has accomplished what HR experts around the world would have considered next to impossible. While confined to the government-set remuneration schemes-severely uncompetitive in a rapidly liberalizing industry-with little flexibility in dealing with errant behaviour not to speak of sub-par performance, SBI has managed to ignite the potential of a large part of its employee force in a relatively short period.
Of course, the transformation journey has only begun for SBI. A lot remains to be done, and there is massive potential as well as the colossal challenge of sustaining the gains that it has accomplished in recent years. It has to deal with leadership change and a rapidly changing environment and it remains to be seen whether the transformation process has truly crossed the point of no return . As the SBI story gains exposure, management practitioners and academicians alike will closely watch the bank to derive lessons applicable elsewhere.
None of this, of course, takes away from the importance of this book. It provides a timely account of a very special experiment in management. It has implications far beyond the confines of the banking industry or emerging markets like India; it provides important lessons for the theory and practice of management itself. I have no doubt that it will be widely read and will serve as an important reference for strategy, change management, and management of financial institutions around the world. I take distinct pleasure in inviting the reader to this fascinating story of how SBI reinvented itself.
Rajat K. Gupta Senior Partner Emeritus McKinsey & Company
New York April 2010
A guide to the book
Here is a navigational aid for this book. It may help the reader wade through the details of the various parallel efforts that constituted the transformation at SBI without losing the big picture. The corresponding chapter numbers are shown in parentheses. The figure below gives a 10,000-feet overview of the entire transformation exercise. A small version of this figure will appear nex