Case Presentation Strategic Transformation

SBIs Transformation
Facing Reality Resource Dependency Routines ,Habits & reflexes tied to the old formula Setting High Standards of Performance Accepting responsibility of Results

Changing structures Monopoly Old , hierarchical, transaction oriented bank Eliminate bureaucracy Speed up decision process Change programs

Success Sclerosis

Change in the Banking industry customers service and products offering

Corporate Self Renewal

How is history playing a role in the transformation of State Bank of India?

SBI was created with an aim of development of rural India. Its historical factors that have acted as drivers and constraints are: 1. Emotional chord with the people of India 2. Huge size : 18000 Branches, 25000 ATMS, 267000 employees 3. Created with a focus of development of Rural India 4. High bargaining power 5. Best employer : outsiders looked at SBI employees with awe 6. Power of Money and reach : motivated people with bank with them 7. Treated as a temple : touch their foreheads before entering 1. Hierarchical: 9 levels between asst. manager and chairman ; 14 administrative circles 2. Transaction oriented 3. 60% government stake 4. Huge size : 18000 Branches, 25000 ATMS, 267000 employees 5. Multiple people involved in transaction processing 6. Multiple queues, iron grilled counters 7. No focus on customer service 8. Staff spend most of their time doing manual paper work

Tracing the transformation strategy back to history

Transformation activity 1 1. Trust towards the bank. 2. Huge network of branches

Sheer power of money - Monopoly

Why

Why

Cater to the specific needs of different customers

Why

Division of bank into 4 strategic business groups

Tracing the transformation strategy back to history

Transformation activity 2

Each person reported to the next immediate level

Why

Why

Structure in SBI was hierarchical in nature

Employees did not know about the actual condition of the bank

Why

Communicating the vision of the future; corporate communication

Communication strategy
Stories and Movies 1. Essence of transformation Caterpillar changing into butterfly 2. Golfers Swing SBI has lost its swing and we have t regain it 3. References from GITA Management & Unions 1. Creating Brand ambassadors MD & DMDs 2. Highly unionized work force trade unions and management are always at loggerheads. 3. The meeting isnt over till we agree Parivartan 1. Communicating to the clerical staff -1,38,000 2. How will a clerk in north-east know that the bank is loosing in Mumbai. 3. Helped in creating a sense of urgency.
(Branch head and clerk receiving same meeting invite)

Tracing the transformation strategy back to history

Transformation activity 3 Employee burdened with paper work. Not getting time for sales or service
Why

Problems with implementation

-Lack of zeal and mind set -Resistance towards adopting new technology -Unionized workforce (exposing Low productive work force) -Bugs (complaining employees)

Loosing market share to competition

Why

IT platform/Business process reengineering / Branch to bank

Tracing the transformation strategy back to history

Transformation activity 4 Never in the past did the bank saw banking as a service to the customer
Why

India was home to the largest middle class in the world

Why

Change the image to be relevant to the youth and growing middle class

Why

Winning back the Middle Class Consumer

Tracing the transformation strategy back to history

Transformation activity 5 Renewed focus on customer service and profits from banking operations
Why

Lack of employee recognition measures

Why

Employees lacked motivation and zeal

Why

Changing Individual Performance Management System

Thank you