State Bank of India

- A transformation under O.P BHATT

- Group 10
Section B
Akshay Garg| Kashish Jain| Lipika Agarwal
Nipun Kumar | Prateek Patwal | Rohit Jain

About SBI
Has its roots from Bank of Calcutta which was

established in 1806
Was known as Imperial Bank of India in 1921
Renamed as State Bank of India in 1955
In 2008, government acquired RBIs stake in
SBI to remove conflict of interest
Has 66% of branches in rural and semi-urban
areas
Domestic operations contribute 88% profits
Has about 190 branches overseas

Case Problem
External Issues
ICICI Bank, within 12 years from its incorporation, had

become SBIs biggest competitor

In 2006, SBIs market share fell from 35% to 15%
SBI was perceived as Old and Bygone

Internal Issue
Problem mainly related to the then existing leadership
The top management was aging and no clear leadership

pipeline was present

The, then, Chairman AK Purwar, could not properly deal with
the growing competition
HR system had become ineffective
High resistance towards culture change in the organization

What went wrong

Intense competition in the banking industry
Market share fell in various categories
Competitors were closing the gap with their

customer oriented policies

It has lost its connect with the modern
customer
Customer Base
Could not
serve needs
of large
corporates
Only 2-3% of
customers
from affluent
sections

Human
Resources
Lack of
performance
driven culture
Training
systems not
catering to
modern
banking

Brand
Appeal to
youth was
relatively low
SBI denoted
trust, but was
mostly
relevant to
older
segment of
customers

Functional
Skills
Not a leader
in product
development

Organizational Structure of SBI

Framework for assessing Environmental

Uncertainty

Contd..
In 2006, when SBI was under threat from

ICICI, the environment was complex

Large number of external elements influence
working of the organization
These include laws and government
regulations
As the uncertainty in the environment was
increasing over time, more departments were
formed in SBI, many of which were not
efficient in 2006

New Chairman
Managing Director of State Bank of Travancore

was made Chairman of SBI in July, 2006

He was there at the right age and right time
(dynamic succession process)
Reduced the resistance to change in the
organization through his initiatives
Active involvement of top management during the

transformation
Organized various conclaves to revive internal
synergies
Provided platform to reduce communication gap
between top management and junior level
employees
Started a project titled Project Parivartan

Leadership attributes of O.P Bhatt

Transformation is not instantaneous. It takes

decades, in some cases. That is why we need to

start the process today. We are already 20
years too late
Role Model
Conviction
Participative
Delegative
Ability to motivate and inspire
Communication

Project Parivartan
Brain child of O.P Bhatt
Started in July, 2007
First of its kind
Aimed at every single employee from junior

level to senior level

To gain support and acceptance of change
initiatives
Objective was to bring a change in the
attitude and approaches of the employees

 Change in mindset, attitude and

customer orientation

Focus on
Program

City wise, town wise, pre identified

venues

Achieveme
nt

Over 200,000 employees covered

within record time of 100 days

Employees

Were rejuvenated with new vigour and

enthusiasm

A two day multimedia programme to

sensitise employees to the need for
change

Objective

Project Parivartan contd..

Change process Sequencing theory

Theory
E
Theory
O

Economic Importance
Top management driven

Culture & Staff

Participative change
Commitment

Change takes a complete turn of the

wheel
Practices

Products

Processes

People

Systems

Organisation
culture

Customer
service
standard

Outcome
All the efforts bore fruit
SBIs market share increased
20% increase in customer satisfaction
Number of customer service elements where

85% branch compliance is achieved,

increased from 3 to 14
SBI named THE BEST BANK 2009
Mr. Bhatt got numerous awards for his
leadership and was even nominated Indian of
the year

McKinsey 7S Framework

Challenge Ahead
The transformation had just begun. Would

it sustain?
What HR strategies should SBI adopt in
future to curb competition from private
sector banks like Axis, HDFC?

THANK YOU