Project parivartan transformation of sbi


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Project parivartan transformation of sbi

  2. 2. ORGANIZATIONAL CHANGE "Change is the law of life, and those who look only to the past or present are certain to miss the future." - John F. KennedyUNFREEZING MAINTAININGRecognizing the needfor change. CHANGES Creating & maintaining new organizationl system. ALLIGNING CHANGING REFREEZING Creating a positive Attempting to create a Incorporating the environment for new state of affairs. changes. change.
  3. 3.  State Bank of India (SBI), the bank was confronting a host of problems. Though it was the market leader, it was facing tough competition from private players such as ICICI Bank, HDFC Bank, etc. Its ranking in the list of top global banks was also slipping. The company was unable to attract young or affluent customers and its brand image was perceived to be old and staid. The bank had been losing market share steadily for more than two decades. In the early 1970s, SBI had about a 35 percent market share, but that had fallen to about 15 percent. During the early years of this century, the decline was getting worse.
  4. 4. NEED FOR CHANGE {inside SBI} SBI had a voluntary retirement scheme, which meant some of its best people, those confident of getting hired at private-sector or foreign banks, were leaving SBI in droves. Rollout of the centralized computerization system. Problems with the system—poor connectivity and its complexity—meant that it was actually damaging SBI ability to serve customers. It could take two hours to open an account. They were losing business, and the staff was getting frustrated.
  5. 5. NEED FOR CHANGE {outside SBI} Large and midsize corporations- SBI had always been the king of this business because there was a time when the main thing a corporation needed from a bank was a large chunk of money, and SBI was uniquely placed to provide that. But suddenly these corporations didn’t need just money; they needed something else—for instance, fee-based services like treasury, trade finance, and cash management across multiple currencies and borders—that required technology SBI didn’t have. Naturally, these businesses started moving away from SBI. YOUNGSTER & AFFLUENT- For youngsters, State Bank was not the first bank of choice. When younger people started becoming more affluent, SBI didn’t notice. SBI didn’t offer, for example, personal loans for buying a car or a house, for furnishing a home, for taking a holiday, or for whatever reason. Psychologically, it was easy for these young customers to veer toward the more flashy private-sector and foreign banks, rather than the relatively dull and dowdy public sector.
  6. 6. TRANSFORMATION “This was a great bank, and it was seeing relatively bad days,” says Mr. Om Prakash Bhatt, who joined the bank in 1972 as a probationary officer and was named chairman in 2006. SBI—the country’s largest bank by assets—had fallen on tough times when Bhatt took charge of the state-owned institution. He started by talking to senior executives in small groups, trying to get them both worried and excited: worried about what had happened to the bank and excited about how they could undo the damage. He held a conclave where 25 of the bank’s senior leaders sat together for five days talking things over.
  7. 7.  It started by showing a movie, The Legend of Bagger Vance. It’s about a golfer who has lost his swing. A golfer’s swing is not an intellectual exercise. It demands harmony of your entire being: heart, mind, and body. If you lose your swing, it’s a challenge to find it again, but if you do, you can be as good or better than you were before. Just showing the movie was so unusual that it created a different kind of psychology. Afterward, they had four days of structured discussions, which always returned to the themes that came out that first night. They talked about how to build a bank, what to do in the bank, what not to do, the problems they faced and how to solve them, and so on.
  8. 8. CHANGE He left with a 14-point agenda that fell into three broad groups. The first involved issues directly related to the business. What products and businesses are SBI missing out on? Where should SBI make its presence felt? Are there businesses SBI should abandon? What needed more energy and focus? Second group of ideas focused on how to facilitate these businesses. They looked at business processes, risk management, performance management, technology, incentives—all those things. The third group centred on people. What is it that demotivates the people? And what can they do to change that? It was about training and recruitment, but it also discussed motivation and whether SBI needed a different organizational culture, role modelling, communications strategies, and leadership. Together, these measures became the grand strategy that encapsulated its new vision.
  9. 9.  In January 2008, SBI became number one in India in terms of market cap, overtaking ICICI Bank. State Bank is now the country’s 5th largest company in terms of market cap, from 14th in 2006. SBI entered the Fortune Global 500 Listing. Customer service was also improving. In 2007, SBI was rated the best bank in India in terms of customer service, brand loyalty, and branch strength.
  10. 10. HOW DO THEY DO THAT SBI implemented a new program called project parivartan, which is a two-day program designed to build awareness. There is no preaching, no teaching involved. Rather, it’s a workshop designed to create awareness around the need for change and as a call to action or duty among all employees. The idea behind parivartan was to sensitize everyone at the bank to the need for ongoing change. They have 70 training centers across the country, and within 100 days, they covered everybody. Parivartan brought new energy across the bank—more pride, more involvement, and more joy. Across the bank, there’s a perceptible, qualitative change in the kind of customer service the bank renders. All the success— business, getting awards, raising its rankings—came only because SBI brought 200,000 employees on board through parivartan.