How a Film fueled SBI's Growth?

The only Indian bank in the Fortune Global 500 corporations list for the year 2021. Wow!, but how? Why & When SBI faced doldrums? How it reached so far? Read the story of changing the system.

From 35% market share in 1970s to 15% in 2006 and revamping it again to 23.29% at present, SBI's journey is just like a batsman.

"100 in some but anytime 0 can come.

Rotating strikes like a pro, but getting run-out on a throw.

6s in seconds to 1s in minutes.

Record in few to down in new".

The story dates back to 1955 (Nah-Nah, not a history lesson).

SBI got established and inherited huge resources from Imperial Bank of India in terms of branches and customer base. It was on a spree of amalgamation from 1962 to 1985 and become a mammoth.

Result: The monopoly in the banking house!

During this time the banks had a little say in the decision making and RBI used to decide -WHOM TO LENT, HOW MUCH TO LENT and on WHICH RATE TO LENT. This little say caused the banks in 3 ways:

1. They lost the ability to foresee the future.

2. The critical decision-making skill faded.

3. As everything was pre-determined, they never learned the art of acting & adapting to changes.

Result: Missed right opportunities at the right time.

Same happened with SBI.

When liberalization knocked the door in 1990s, private and foreign players entered the banking industry and took painstaking efforts to leap forward - bigger and better. And as SBI was not ready (well equipped) to take the competition head on,

"The sun of competition caused tan on the fair skin (monopolistic position) of SBI".

This caused the SBI in 3 ways:

First, the loss of market share especially in the star business of deposits. 1990s was the time when corporations were demanding other fee based services also like trade finance, cash management in multiple currencies etc. and new market players were providing service of deposits as well as other fee based services. They were like the Financial Departmental Store- all under one roof.

Second, the employees of the bank were taking the Voluntary Retirement Scheme (VRS) and

joining the private and foreign players. Hmm, who will leave an attractive pay package plus variety of work?

Third, the loss of 2 important customer segments:

• large & mid-size corporations and

• young people (at that time SBI was not offering a personal loan or car loan or a home loan or loan for vacation or holiday)

And the SBI lost the track.

But someone was closely observing this collapse. He had an envision for the bank. Mr. Om Prakash Bhatt. He joined SBI in 1972 as a Probationary Officer (PO).

To his surprise, he become the Chairman of the bank in 2006. And SBI's transformation begun.

"When you move from lower level to higher level in the hierarchy, you are well aware of the problems at each layers of the chain".

As soon as he took the charge, he identified 4 major problems (or may be he knew while working as a PO and in other capacities):

1. Institutional hypocrisy (not acting in a way it is supposed to act i.e. moving away from values). The reasons were the design of the structure (remember monopoly) and power of trade unions (employees started to advance their own interests).

2. Divergence in efforts as everyone was moving in different directions without any vision, goal, commitment and energy.

3. Improper Communication System. Directions getting confused from central level to branch level and a weak feedback system.

4. Lack of team spirit as individuals were working good but teams were not able to deliver the things right. The reason was absence of alignment along a common set of objective. People also lost sense & pride of belonging.

Now, he knew the problem. Difficult task: to communicate it to 2,00,000 employees out there.

One way was to directly communicate the problem. Another one was too pretend that he is not aware of the problem and let the team identify the problem. But, team spirit kha thi.

So, he decided to bring the spirit back in a different way. (he held a 5 day program)

On the 1st day, the team watched a movie -The Legend of Bagger Vance (based on the life of a golfer who lost the touch of the game, went into depression, again worked hard and finally came back into the game; co-relate this with the first line of the post).

And at movie time spirit remains high because you try to tell others - 'dekhna ab aisa hoga' or 'ha ab ye aisa krega'.

This was actually aligning the employees because SBI was facing the same phase as faced by the golfer.

For the rest of the days, the team discussed and answered questions like -

• Building of a bank

• Do's and Dont's in a bank

• Exact problems and step-by-step solutions.

For the first time, the Deputy Managing Directors made presentations to the Branch Managers and the Chairman had a meeting with the Union Leaders.

You see that no one was talking about the targets like we have to achieve x % of market share or x no. of customers.

Learning for all of us: Everyone was talking about improving the SYSTEM from scratch.

And as James Clear has said in his book Atomic Habits,

"Focus on System and not on Goals.

First decide the identity, then laid down the processes and finally get the outcomes".

SBI is actually a, System Based on Improvements

Today, SBI is the fuel for India's financial rocket. Its customer base stands at 45.92 crore as on 31 March 2021. The continuously improved system helped it to add 2.41 crore customers since 2019 even amid the pandemic.

How you envision SBI and the banking industry as a whole? Have you also tried newer ways of team building in leadership roles?

Do let us know in the comments and share your story with others.

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