The financial markets generate a lot of number on a per second basis. There are people who have made it a profession to convert this information into trends, buy-sell signals, charts and pivot tables. Over the last 18 years of financial journalism, I have realised that every number has a story to tell. And these numbers as a trend normally never lie. I am forever looking for these trends.
Award: Best CEO Public Sector
Name: MD Mallya, CMD, Bank of Baroda
Why He Won: For taking charge of the bank just as the global financial meltdown started, and managing to keep the bank’s performance stable in that period. And for being able to compete effectively despite being in the public sector.
As you read this, the first batch of newly minted students from the Baroda Manipal School of Banking are preparing to begin their innings in various branches of Bank of Baroda (BoB) across the country. And even before they’re on board, branch managers at BoB have begun scrambling to snag them. “The internal feedback is that students who have done a three-month internship in the branches are highly productive,” says Joydeep Datta Roy, assistant general manager, human resources, BoB.
It isn’t entirely surprising. Apart from the internships, every aspect of their classroom on campus—including the colour of the walls and the layout—is simulated to create the same look and feel of a typical BoB branch. Even the computers are connected to the training servers of the bank so that the students get a sense of the real-time environment of a bank branch inside their classroom. The result: The students are able to start performing on the job as soon as they step into a branch.
Creating a new cadre of battle-ready professionals is the brainchild of MD Mallya, the chairman and managing director of Bank of Baroda. And it could well be an important part of his legacy too. Mallya retires this November, ending his successful four-and-a-half-year tenure, during which both the bank’s profits and employee productivity more than doubled. It has been a sterling performance. During his chairmanship, he’s tackled every aspect of the bank’s operations—from re-organising the backend operations and modernising branches to training staff and upping the levels of customer service. But his biggest, and perhaps most lasting contribution, could well be his copybook formula to a problem that is endemic to every public sector bank—an ageing workforce.
Across public sector banks, nearly 50 percent of officers are slated to retire in the next five years. However, at Bank of Baroda, the problem is less severe: Around 25 percent of its officers end their tenure over the next four years. Beyond the numbers, though, these officers aren’t easily replaceable. After all, many of them have years of experience and domain knowledge.
“HR is the biggest challenge for banks in India. That is why Mallya is spending most of his time in this area to put the right person in the right job. We know that a lot of people will leave in the coming years, and we have put robust systems to replace the outgoing officers,” says SK Das, who now heads human resources at BoB.
The Manipal experiment—the first by a public sector bank—is only the tip of the iceberg. The school will provide 180 people every quarter and, over a period of time, this number will touch 340. The plan is to add almost 1,000 employees every year, depending on the requirements of the bank.
What’s more, the senior management takes time out of their schedule to be with the students and that builds a healthy relationship for the future, says S Vaitheeswaran, MD & CEO, Manipal Global Education Services in Bangalore, who helped design the school’s charter.
In the past, like every other public sector bank, Bank of Baroda would hire probationary officers through the exam conducted by the Institute of Banking Personnel Solutions. But they realised it takes a lot of time for a probationary officer to become productive. Also, the bank needs to invest heavily before they would yield actual results.
So what did Mallya do? He followed a simple recipe: Instead of reinventing the wheel, he looked for ideas that others had already perfected. That’s how he reached out to Manipal’s Vaitheeswaran, who had created a similar school for ICICI Bank and knew exactly what Mallya was looking for. (Since then, two other PSU banks—Punjab National Bank and Andhra Bank—have followed in their footsteps.)
When the school opened admissions this year, nearly 60,000 students applied for the exam. Eventually, 1,500 students were chosen, many of them from Tier II and Tier III towns, where banking is considered to be a stable profession and, therefore, attrition levels tend to be much lower than among city dwellers.
Mallya’s common-sense approach was apparent right from the very start. When he started his assignment, he seemed to have his long-term goals sorted in his head. On the very second day at work, while travelling from Pune to Mumbai, he said something to Das, then the Pune divisional zonal head, that became the mission statement for the 42,000 employees of the bank. “Our growth should be in such a way that we should endeavour to converge the annual profit in the year 2007-08 to a quarterly profit within the shortest possible time,” he said.
Mallya was also clear that this growth in profits would have to come on the back of higher employee productivity—something that had stagnated for some years prior to his joining. To drive that transformation, the first step was to get employees on his side.
In 2008, the hostile macro-economic environment meant that almost all banks seemed a bit wobbly—and employees were uncertain about the future. In his very first week at work, Mallya sent a letter to his staff, sharing his philosophy. He seemed to hit all the right notes. His letter spoke about his policy of ‘employee first’. He made it clear that every employee was an asset to the bank, irrespective of their designation or geographical location. The bank’s customers would be happy only if the employees were happy.
Now, it was easy to dismiss it as typical chairman-speak. But Mallya really meant it. Until then, there had been a feeling within the bank that transfers were entirely arbitrary. For instance, a resident of Patna would be given a posting somewhere in Pune, without any clear logic. Promotions, too, were being stalled, leading to a fair bit of pent-up frustration among the employees.