Reinventing Axis Bank: CEO Shikha Sharma brings in smooth transition, creating trust
Movie
metaphors come naturally to Shikha Sharma. When we asked her how it
was to be mentored by KV Kamath at ICICI Bank, for an earlier article
in Corporate Dossier, she's likened him to Professor Higgins in My
Fair Lady.
This time, when we ask her about the changes at Axis Bank, she says, "Look at how the fate of a movie is decided in the first weekend by what people say on social media. People are empowered. The Web has changed the world and the bank has to change with it." Over time, Sharma has proved herself to be a master at managing transitions.
When she moved from ICICI Prudential Life Insurance to take charge as managing director and CEO of Axis Bank five years ago, the bank was in the throes of an identity crisis — a private bank with characteristics of a public sector organisation. Sharma changed all that and turned Axis Bank into a player, in the same league as ICICI Bank and HDFC Bank.
Axis is now a retail bank, as opposed to its earlier corporate focus, and Sharma is leading a second transition as it goes digital. But Sharma doesn't want to be the heroine of the Axis Bank movie. When we ask her about change leadership as opposed to change management, she says "I don't understand the difference."
Change management is about executing changes at a micro level, with minimal disruption and cost, while change leadership is about inspiring a transformation in culture. Sharma knows the difference, the doe-eyed Audrey Hepburn impersonation notwithstanding. But rather than split semantic hairs, we ask: what's the key to managing a smooth transition? "It starts with figuring out what needs to be changed and what doesn't," says Sharma.
"Sometimes you need to change something that still seems to be working perfectly well, based on signals you receive from the environment. When we shifted from corporate to a retail orientation, there was no immediate reason. Or when we launched our mobile interface even before internet. As Mr Kamath once said to me, success is the biggest barrier to change. Successful people are the often the most resistant to change."
Anticipating changes in the environment before they start damaging the organisational fabric is the essence of leadership. When Sharma joined Axis in 2008, corporate banking in India was beginning to feel the pinch of the global slowdown.
This time, when we ask her about the changes at Axis Bank, she says, "Look at how the fate of a movie is decided in the first weekend by what people say on social media. People are empowered. The Web has changed the world and the bank has to change with it." Over time, Sharma has proved herself to be a master at managing transitions.
When she moved from ICICI Prudential Life Insurance to take charge as managing director and CEO of Axis Bank five years ago, the bank was in the throes of an identity crisis — a private bank with characteristics of a public sector organisation. Sharma changed all that and turned Axis Bank into a player, in the same league as ICICI Bank and HDFC Bank.
Axis is now a retail bank, as opposed to its earlier corporate focus, and Sharma is leading a second transition as it goes digital. But Sharma doesn't want to be the heroine of the Axis Bank movie. When we ask her about change leadership as opposed to change management, she says "I don't understand the difference."
Change management is about executing changes at a micro level, with minimal disruption and cost, while change leadership is about inspiring a transformation in culture. Sharma knows the difference, the doe-eyed Audrey Hepburn impersonation notwithstanding. But rather than split semantic hairs, we ask: what's the key to managing a smooth transition? "It starts with figuring out what needs to be changed and what doesn't," says Sharma.
"Sometimes you need to change something that still seems to be working perfectly well, based on signals you receive from the environment. When we shifted from corporate to a retail orientation, there was no immediate reason. Or when we launched our mobile interface even before internet. As Mr Kamath once said to me, success is the biggest barrier to change. Successful people are the often the most resistant to change."
Anticipating changes in the environment before they start damaging the organisational fabric is the essence of leadership. When Sharma joined Axis in 2008, corporate banking in India was beginning to feel the pinch of the global slowdown.
The
crisis became worse, but the bank had by then slowed down on
corporate lending and shifted focus to retail lending. Sharma herself
had no previous experience in wholesale change management -- her big
project had been ICICI Prudential, a start up, where everyone was
new. At Axis, on the other hand, there was an old guard which needed
to be persuaded.
"Communication is a very important part of change management," says Sharma. "You need to communicate to everyone what you're trying to do, how you're going to do it. You need to get inputs from everyone. Then you have to maintain a pace of change that is digestible and doesn't cause disruption. For example, we didn't halt corporate banking altogether. We just slowed it down."
Communication and persuasion are slow processes and take up much of a new CEO's time and energy, but the only alternative is to start a reign of terror and remove everyone who resists.
Sanjeev Gupta joined Axis (then UTI Bank) from State Bank of Bikaner and Jaipur 20 years ago and today he's designated CFO and executive director (corporate centre). Though he's 53 (the same age as Sharma) he plays the role of senior statesman, like a stern Christopher Plummer from The Sound of Music, inspiring awe and reverence amongst the young set at the bank.
Talking us through the various transitions the bank has gone through under previous CEOs, he says, "Shikha could have wrought drastic change by sidelining all of us and bringing her own people, as many outside CEOs are known to do. There was anxiety, but she ensured a smooth transition by including everyone in strategy deliberations, creating trust. Which is why the four executive directors who were there when she joined stayed till retirement. We oldtimers are happy to be part of positive change. That is why we had originally left the public sector to join this bank."
Asked about the new transition to digital banking and the loosening of controls this might entail, Gupta just shrugs and says, "I've seen many frauds in my time, when there were tight controls. I'm not unduly worried about the risks in digital banking. Besides, who can object to something which is so obviously good for customers?"
"Communication is a very important part of change management," says Sharma. "You need to communicate to everyone what you're trying to do, how you're going to do it. You need to get inputs from everyone. Then you have to maintain a pace of change that is digestible and doesn't cause disruption. For example, we didn't halt corporate banking altogether. We just slowed it down."
Communication and persuasion are slow processes and take up much of a new CEO's time and energy, but the only alternative is to start a reign of terror and remove everyone who resists.
Sanjeev Gupta joined Axis (then UTI Bank) from State Bank of Bikaner and Jaipur 20 years ago and today he's designated CFO and executive director (corporate centre). Though he's 53 (the same age as Sharma) he plays the role of senior statesman, like a stern Christopher Plummer from The Sound of Music, inspiring awe and reverence amongst the young set at the bank.
Talking us through the various transitions the bank has gone through under previous CEOs, he says, "Shikha could have wrought drastic change by sidelining all of us and bringing her own people, as many outside CEOs are known to do. There was anxiety, but she ensured a smooth transition by including everyone in strategy deliberations, creating trust. Which is why the four executive directors who were there when she joined stayed till retirement. We oldtimers are happy to be part of positive change. That is why we had originally left the public sector to join this bank."
Asked about the new transition to digital banking and the loosening of controls this might entail, Gupta just shrugs and says, "I've seen many frauds in my time, when there were tight controls. I'm not unduly worried about the risks in digital banking. Besides, who can object to something which is so obviously good for customers?"
Axis
has always been a fairly techsavvy bank. Former managing director PJ
Nayak was ahead of his time in taking a big bet on ATMs and the bank
has 13,000 of them, more than any other private sector bank and
second only to SBI. Axis is now planning to shut down some of the
less utilised ATMs located in small towns.
Meanwhile, it is taking a big bet on mobile banking, in the belief that the preferred bank of tomorrow will be the one which enables customers to move money instantly through an app installed in their mobile phones. Overseeing the execution of this Vision 2020 is Rajiv Anand, group executive, retail banking, who says: "We have an elaborate process of taking this vision to every employee. Today, if you ask an executive at any branch what we are trying to achieve, he will be able to tell you."
..
Meanwhile, it is taking a big bet on mobile banking, in the belief that the preferred bank of tomorrow will be the one which enables customers to move money instantly through an app installed in their mobile phones. Overseeing the execution of this Vision 2020 is Rajiv Anand, group executive, retail banking, who says: "We have an elaborate process of taking this vision to every employee. Today, if you ask an executive at any branch what we are trying to achieve, he will be able to tell you."
..
Valued
at Rs 100 crore per month in July 2013, digital transactions at Axis
have grown to Rs 800 crore per month in a year. The fact that it has
recently roped in Deepika Padukone for its mobile app advertisements
may have something to do with it. But the rapid growth has resulted
in some heated internal debate on whether the operational risks were
being adequately addressed.
After all, nothing is worse for a bank's reputation than its customer accounts being hacked and money stolen. Anand believes that mobile banking is actually much safer than internet banking, which has so far been the norm. "Mobiles are much more personal than PCs. Our mobile app is locked into an individual user's phone and he is only one who unlocks it," he says.
Over the past five years, Axis has grown its retail loans from zero to 40 per cent of its total lending portfolio and here too, technology is playing a big role. Jairam Sridharan joined the bank in 2010 as president, consumer lending & payments, with a mandate to drive the use of analytics. Today, lending decisions — for housing, education, credit cards — are almost wholly made by a computer algorithm.
"Retail is not judgment driven, like corporate banking. Without analytics, we would need an army of people trained to take decisions on sanctioning loans and there would still be inconsistencies. Banks which don't have analytics are at a competitive disadvantage," says Sridharan.
An evangelist geek of the kind played by Justin Timberlake in The Social Network, Sridharan has been travelling to branches across the country, convincing people whose jobs are affected of the inevitability of digitisation. This includes people in charge of collections, who no longer deal with bounced cheques but defaults in digital payments, making it harder to take the legal route.
"Connecting with the staff is not easy. You have to be there physically, look them in the eye and convince them that this is the way the world is headed. I travel three days a week, addressing town halls at branches, because a buy-in from people there is very important to the digital transition," says Sridharan.
Sethi is the one responsible for constantly upgrading the bank's mobile application, introducing changes that simplify and enhance the usage. Meanwhile, in a bid to promote internal digitisation, the bank has introduced apps that enable employees to mark attendance, apply for leave, file travel expenses on their smartphones.
After all, nothing is worse for a bank's reputation than its customer accounts being hacked and money stolen. Anand believes that mobile banking is actually much safer than internet banking, which has so far been the norm. "Mobiles are much more personal than PCs. Our mobile app is locked into an individual user's phone and he is only one who unlocks it," he says.
Over the past five years, Axis has grown its retail loans from zero to 40 per cent of its total lending portfolio and here too, technology is playing a big role. Jairam Sridharan joined the bank in 2010 as president, consumer lending & payments, with a mandate to drive the use of analytics. Today, lending decisions — for housing, education, credit cards — are almost wholly made by a computer algorithm.
"Retail is not judgment driven, like corporate banking. Without analytics, we would need an army of people trained to take decisions on sanctioning loans and there would still be inconsistencies. Banks which don't have analytics are at a competitive disadvantage," says Sridharan.
An evangelist geek of the kind played by Justin Timberlake in The Social Network, Sridharan has been travelling to branches across the country, convincing people whose jobs are affected of the inevitability of digitisation. This includes people in charge of collections, who no longer deal with bounced cheques but defaults in digital payments, making it harder to take the legal route.
"Connecting with the staff is not easy. You have to be there physically, look them in the eye and convince them that this is the way the world is headed. I travel three days a week, addressing town halls at branches, because a buy-in from people there is very important to the digital transition," says Sridharan.
Sethi is the one responsible for constantly upgrading the bank's mobile application, introducing changes that simplify and enhance the usage. Meanwhile, in a bid to promote internal digitisation, the bank has introduced apps that enable employees to mark attendance, apply for leave, file travel expenses on their smartphones.
Performance
management has shifted to a phone app whereby a manager can give a
star to team member whenever he or she demonstrates exceptional
performance, rather than wait for annual appraisals. There's even an
app that enables people on holiday in far-out destination to search
for the nearest Axis employee in case they need help.
"It's about changing mind sets and inculcating a digital culture. Change can be a pleasure if it the benefits are made obvious," says HR head Rajesh Dahiya. One of the cultural changes Sharma brought about in the initial years is the elimination of hierarchy. This has made the transition to digitisation that much easier.
Dahiya, who was recruited by Sharma from Tata Sons soon after she joined, says, "Those days, it was unheard of to cut across layers and talk to your super-boss. Hierarchies were modeled on public sector banks and nobody used first names."
For those who've stayed till the end of this movie, there's Srinivasan Varadarajan, executive director, corporate banking, who was brought in from JP Morgan when Axis Bank's previous corporate banking head retired.
He's been using the lull in business to oversee the development of a technological innovation called the Axis Enterprise Payment Hub, a cash management tool which enables corporates to consolidate digital payments received through various channels like National Electronics Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and Electronic Clearing System (ESC) onto one platform.
It's not as exciting as what's happening in retail banking, but once business revives, Varadarajan believes it will give the bank advantage. A taciturn man in the mould of characters played by John Wayne, he simply says, "There will always be cycles. A tough environment has kept us down but our corporate banking francise is still strong."
Tips for transitions
- Figure out what needs to change, based on signals from the environment.
- Communicate this with people down the line, stressing the benefits.
- Get feedback and inputs from everyone and hence, buy-in.
- Execute the change at a pace that is digestible and doesn't cause disruption.
Dibeyendu Ganguly, CDET141010
"It's about changing mind sets and inculcating a digital culture. Change can be a pleasure if it the benefits are made obvious," says HR head Rajesh Dahiya. One of the cultural changes Sharma brought about in the initial years is the elimination of hierarchy. This has made the transition to digitisation that much easier.
Dahiya, who was recruited by Sharma from Tata Sons soon after she joined, says, "Those days, it was unheard of to cut across layers and talk to your super-boss. Hierarchies were modeled on public sector banks and nobody used first names."
For those who've stayed till the end of this movie, there's Srinivasan Varadarajan, executive director, corporate banking, who was brought in from JP Morgan when Axis Bank's previous corporate banking head retired.
He's been using the lull in business to oversee the development of a technological innovation called the Axis Enterprise Payment Hub, a cash management tool which enables corporates to consolidate digital payments received through various channels like National Electronics Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and Electronic Clearing System (ESC) onto one platform.
It's not as exciting as what's happening in retail banking, but once business revives, Varadarajan believes it will give the bank advantage. A taciturn man in the mould of characters played by John Wayne, he simply says, "There will always be cycles. A tough environment has kept us down but our corporate banking francise is still strong."
Tips for transitions
- Figure out what needs to change, based on signals from the environment.
- Communicate this with people down the line, stressing the benefits.
- Get feedback and inputs from everyone and hence, buy-in.
- Execute the change at a pace that is digestible and doesn't cause disruption.
Dibeyendu Ganguly, CDET141010
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