State Bank of India was facing declining market share and competition from private banks. A new chairman implemented a transformation through a 14-point agenda focusing on business strategy, processes, technology, people, and culture. Key changes included the Parivartan program to engage employees, improving customer service, and focusing on new products and markets. These changes led to improved financial performance, customer satisfaction, and global rankings for State Bank of India.

1. ORGANIZATIONAL DEVELOPMENT & CHANGE
TRANSFORMATION
PRESENTED BY:
RAJNISH DEO
(PGDM A1139)
MAITRY ROY
(PGDM A1120)
CHANGE

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. Kennedy
UNFREEZING MAINTAINING
Recognizing the need
for 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.  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. 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. 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. 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.  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. 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.  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. 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.