The State Bank of India (SBI) is an example of the potential of large public sector organisations, often underestimated because of deeply ingrained stereotypes and eclipsed by the publicity that young, trendy firms with new cool products effortlessly generate, writes Rajesh Chakrabarti in ‘Grit, Guts and Gumption: Driving change in a state-owned giant’ (www.penguinbooksindia.com). “As the ground rules of business change, the erstwhile leaders often fall a step or two behind and begin looking like anachronisms to the current generation with limited memory. To survive and thrive, they need to change and keep changing,” he adds.
Voyage of transformation
The book discusses the changes that occurred in SBI since July 2006 when the bank ‘embarked on a conscious voyage of transformation,’ the preface informs. The rationale of the work, as the author puts it, is that transformations are among the most exciting and challenging issues in management. And, to him, the transformation of an organisation as mammoth as SBI, within a period as short as three to four years, is ‘simply fascinating.’
Acknowledging that the changing of an enterprise’s trajectory can be a daunting exercise, especially when the organisation in question ‘has to combat the inertia of over two centuries accumulated in a banking behemoth employing over 2 lakh people,’ the experience of the turnaround can be a compelling organisational story, observes Rajat K. Gupta in the foreword to the book.
A ‘people’ story
Gupta sees the transformation as a ‘people’ story because, through a well-planned communication strategy, the bank 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 organisation, the bank has accomplished what HR experts around the world would have considered next to impossible.”
Taking stock of the transformation, Chakrabarti is of the view that the biggest differentiator of the exercise was its non-reliance on employee motives of greed and fear – the primary levers used in most HR (human resource) systems to stimulate people. “It has chosen to appeal to their inner human core instead, and succeeded in appealing to their higher passions that draw satisfaction from fulfilling one’s dharma rather than focusing on material wealth, from creating rather than consuming. In that sense, SBI’s transformation exercise has been as much of a spiritual journey as a successful business turnaround.”
Wisdom from the Bhagavad Gita
Turning the pages of philosophy, the author finds that the Bhagavad Gita offers an eastern approach to transformation. In chapter 18 of the Gita, he notes the discourse on the nature of human action; and how it talks about the primacy of the right perspective (jnanam) in the initiation of action (karma), the sense of pride in the actor (karta), the need for judgment or discrimination (buddhi), persistence of effort (dhruti), and empathy (maitri, karuna) leading to accomplishment and fulfilment (sukham).
If you wonder how all these connect with the SBI story, Chakrabarti draws the parallels, thus: “A vision founded via a thorough assessment of the environment and communicated across the organisation constituted the jnanam, on which karma was initiated at all levels. Role clarity and empowerment created a sense of task ownership and actor identification at all levels, from the chairman down, leading to widespread karta sense. Driven by discrimination or buddhi and backed by iterative, evolutionary, and persistent efforts or dhruti at transformation and empathy with the inevitable pain-points associated with it (maitri/karuna) have led to fulfilment or sukham.”
Suggestion scheme
One of the many anecdotes in the book is about the revival of the ‘moribund staff suggestion scheme’ as part of the empowerment effort. A 500-rupee reward was announced for any staff suggestion made, regardless of its perceived merit or whether it was accepted or not, the author recounts. The payment, one learns, was made as soon as the suggestion was made – which was as simple as clicking a link on the bank’s intranet site and keying in the suggestion.
Explains Chakrabarti that the scheme was not only an easy incentive for all, but also a powerful signal of how valuable the bank thought staff suggestions were. “A second reward would be given if the suggestion were actually accepted by the management. Suggestions started pouring in after this plan was put in place. Participation as well as thinking about the bank as an organisation became far more common and widespread than ever before. For the first time, two-way communication became a reality at SBI.”
‘Second-class employees’
It may sound unbelievable to many that SBI could successfully allot several new functions to its subordinate staff. For instance, the security personnel, in addition to keeping watch over safety, were charged with welcoming and greeting customers, ensuring there was no crowding at any counter, and helping customers in generating tokens.
“General attendants were tasked with keeping the premises tidy at all times starting well before customers arrived, periodically cleaning up the customer area, ensuring that newspapers and magazines in the customer lounge were current, maintaining plants inside and outside the premises to create a pleasant atmosphere, and offering drinking water in clean glasses placed on a tray to all customers, especially in summer.”
The upgraded duties made an enormous difference to the role of the subordinate staff, narrates Chakrabarti. For the first time, they were being asked to come in direct contact with customers and serve them as well as to promote the bank, he says. “Till now, they had served the employees rather than customers, now they were face to face with customers. In some sense, they ceased to be ‘second-class employees’ and joined the bank in the collective effort to serve. They were being acknowledged as part of the team…”
Global player
Going forward, SBI has to be a global player, not just an Indian giant, the author urges. It is not because there will not be enough growth in demand for banking services in India that will push SBI out, but the fact that there will not be many top credit exclusively Indian firms left, he reasons. “As the Tatas and the Bhartis of tomorrow scour the globe for acquisition targets, they will have the ability to borrow in almost any market in the world, forcing their banks (like SBI) to be globally competitive. They would no longer be SBI’s captive clients because of the ‘home country’ effect.”
One other critical part of the growth would be capitalisation, Chakrabarti feels. He recommends the government to reduce its holding to 51 per cent or even less, to ensure that SBI can raise equity in the market. More importantly, “the extent of government shareholding would be directly linked to SBI’s competitiveness.”
Inspiring read.
**
BookPeek.blogspot.com
