In a thought-provoking exchange, columnist Visty Banaji delves into a conversation with Anil Khandelwal, the former Chairman and Managing Director of Bank of Baroda. This dialogue unveils essential insights into leadership, transformation, and non - monetary motivation, as articulated by an experienced leader with a wealth of knowledge. The conversation uncovers valuable perspectives on the trials and triumphs encountered by leaders in diverse scenarios. Join us as we explore the pivotal highlights of their discussion.

Visty Banaji: What are the significant differences between the new edition of "DARE TO LEAD" and the original version, as mentioned?

Anil Khandelwal: In the updated edition of "DARE TO LEAD," originally published in 2011, several significant improvements have been made. Responding to feedback, I added learning and reflection boxes at the end of each chapter, transforming the book into a valuable resource on leadership in addition to a business autobiography. Key episodes related to customer centricity and courageous leadership have been integrated, and I've overhauled the chapter on my personal code of leadership. To maintain an optimal book size, some lengthy chapters were condensed while incorporating fresh content. A new chapter explores insights from the transformation process, inspired by Harvard Professor John Kotter's work. Notably, academics Professor Pradip Khandwalla and Professor Sriram contributed chapters offering unique perspectives on leadership and enduring transformations. These changes collectively enhance the book's value as a comprehensive guide on leadership and organisational transformation.

Visty Banaji: You led a remarkable transformation at Bank of Baroda in just three years, achieving all your set targets. What was the magic that made it happen?

Anil Khandelwal: In a word, people. Despite criticism of HR, I've always believed that people are the solution, not the problem. I've seen that many organisational issues stem from process problems, and people can drive change. As someone who had soiled his hands at different levels, branch, region, zone, I understood the process deficiencies, and I really wanted to take the bull by its horns. So, if you talk of magic, it is the magic of people and my intense belief in the collective play of people's power.

Visty Banaji: With your successful journey from HR to CMD of Bank of Baroda, what does it take for an HR professional to reach top leadership, and how should one prepare for it while in HR?

Anil Khandelwal :  The journey from HR to CEO is distinct, requiring specific qualities. First, it demands understanding of broad contours of business and problem-solving skills in people-related issues. Second, HR professionals should take lead in creating a facilitative culture by bringing to the fore core issues coming in the way of business development and help management align the structure, strategy and processes to deal with such issues. Third, they must deal with the issues of productivity and help deal with problems that may be hindering it. They should take moral position to confront any unethical policies/practices that may have an impact on the reputation of the company. Finally, HR managers should increasingly volunteer to take up business roles and demonstrate success on the ground. 

An example from my career illustrates this.  My success in turning around business in two business roles  essentially through engagement of the frontline staff and creative problem-solving in the management union domain led to tangible and sustainable change. Also, in my role as Executive Director, my success in changing the power structure (which was heavily tilted in favour of unions) stultifying technology-driven business transformation and empowering the operating managers set the stage for a major transformation exercise. All these steps led to my rising to the position of Chairman and Managing Director and eventually I could lead a major transformation in Bank of Baroda. 

Visty Banaji: Building on the transition from HR to a line role, how do you navigate judgement in unfamiliar areas? Specifically, could you discuss the challenges of making significant strategic decisions and assessing individuals in different disciplines?

Anil Khandelwal:   As an insider, I had the advantage of knowing the executives who could excel in critical roles and restore the business momentum. After taking over as Chairman, I identified some key top executives for critical roles like credit, treasury, international banking, technology and human resources. The selection was purely done on merit irrespective of seniority within the grade. In the very first year we had dramatic growth in some critical areas like credit (the function grew by 41%, against a mere 0.2% growth in the past year) .

I also drew inspiration from industry leaders like Mukesh Ambani and Anand Mahindra, seeking their feedback to enhance our customer engagement. To further strengthen our customer relationships, I implemented a rule that required every general manager to regularly meet with a set number of customers each month. This decision had a profound impact on our customer connections, ultimately driving our success. Likewise, I held several town halls to gain from the field wisdom to bring about changes in our policies. The stuck technology project was kickstarted, etc. These were some of the strategic steps I took to make a difference.

Visty Banaji:  In the foreword by Peter Capelli of the Wharton School and the last chapter by M S Sriram of IIM-Bangalore, the unique challenge of driving transformation without the financial incentives of the private sector is emphasised. Can you share your strategies for motivating individuals without relying on monetary rewards, as deemed crucial by these esteemed professors?

Anil Khandelwal :  In the public sector, we are well aware of our compensation limitations, with few financial incentives and a general culture that lacks rewards for performance or consequences for non-performance. This understanding extends to my top team and me. We acknowledge this reality. In response to the question of how we stay motivated despite our private sector counterparts receiving more, I emphasise that in the public sector, we work out of passion, and that passion should not be subjected to auction. It's about our commitment for the larger purpose to serve the people. 

What people truly seek are stable careers based on performance and growth opportunities. To address this, I expedited promotions, placement and overseas postings based on a meritocratic system and introduced a transparent culture within the system which fostered an environment of fairness and security. 

Given the financial nature of our work, bankers are vulnerable, especially when things go awry and investigative agencies become involved. It's crucial for hardworking and honest individuals to have confidence that the organisation will support them. Through policy framework, I ensured that individuals are treated fairly and that equity and fair play prevail. But above everything we created a system of institutionalised compassion by quick problem-solving of employees serious personal issues through a direct help-line to chairman. These non-monetary incentives matter the most.

Visty Banaji :  Compared to many private sector CEOs, you had the constraint of a limited three - year tenure. How did you manage this limitation? Did it necessitate initiating multiple projects simultaneously that might have been better sequenced? If your CEO tenure had been extended, say, to twice or thrice as long, what changes or adjustments would you have made?

I had taken over as CEO in the background of slide in the ranking of the bank from number 1 to number 4 position in the nationalised sector. The staff was demoralised, peer banks had moved in initiating technology, and our bank had not even started due to industrial relations problems, customers were frustrated and leaving and the overall situation was alarming. Even though my tenure was short, I was very clear in my mind that I had to work hard to regain the past glory of the bank by mobilising the power of people. My immediate mandate was to mobilise 40000 employees for a major transformation program by kickstarting technology and taking other initiatives to restore our prime place in the industry. I personally deployed myself in seeding many customer-centric and employee-centric reforms and laid foundation for building leadership for the future. All these steps have paid off

Regarding transformation initiatives, they aren't always sequential. Some aspects of transformation cannot wait or be addressed in a particular order. For example, improving customer service in a bank isn't a step-by-step process. It involves multiple simultaneous actions. You start by ensuring your premises are appealing to customers, then focus on rebranding to improve your market image. Establishing a direct customer grievance redressal system follows, followed by creating attractive banking products. Creating a distinctive identity, like introducing extended branch hours and a next-generation bank for younger customers, is vital.

In essence, my perspective on transformation is that it often requires tackling multiple initiatives concurrently. And when it's time to leave, some initiatives continue to thrive, making a lasting impact, while others may evolve or cease due to operational reasons. It's about setting the organisation on the right path during your tenure.