Article: In Search of Change Maestros - Series VI


In Search of Change Maestros - Series VI

An optimist who sees an opportunity in every problem, M. Damodaran (Retired IAS and former Chairman, SEBI, IDBI and UTI) re-energized the future of two giant companies – UTI and IDBI. The architect of change was able to bring back the lost glory two crown jewels of the pre-liberalized Indian financial sector and restored the trust of people in them

Organizational openness is critical for creating a transparent organizational amd also building a sense of ownership among people


The velocity and speed of decision making, moving forward, and executing actions are critical in transforming organizations


An optimist who sees an opportunity in every problem, M. Damodaran (Retired IAS and former Chairman, SEBI, IDBI and UTI) re-energized the future of two giant companies – UTI and IDBI. The architect of change was able to bring back the lost glory two crown jewels of the pre-liberalized Indian financial sector and restored the trust of people in them.
Excerpts from the book In Search of Change Maestros* by Dr. Pritam Singh and Dr. Asha Bhandarker

Having started his career in the Tripura cadre in 1971 where he became the Chief Secretary of the State, M. Damodaran also served as Joint Secretary in the banking division of the Ministry of Finance, and later became the Chairman of SEBI in 2008. His involvement also extended to assignments with the RBI where he earned the reputation of scripting the turnaround of three banks – Union Bank of India, Indian Bank and UCO Bank, which were in a perilous state.
He was also appointed by the government as Chairman of UTI which was suddenly swamped by scandals and heading towards a national calamity in the financial sector. While chairing UTI, he was also appointed the CMD of IDBI which was losing its relevance as a development bank. The transformation scripted and implemented by him in both these banks led to setting a new direction for SEBI.

The eleven dominant themes that emerged in the way he transformed both UTI and IDBI are:

Seamless Communication: While communication is important in all organizations, it becomes exceedingly critical in the context of organization turnaround and transformation. He passionately believes that the more difficult the times, the more the necessity for the CEO to communicate extensively and continuously. He used this strategy to ‘connect with people’, ‘galvanizing them’ and ‘building confidence’.
Scripting the Vision: At UTI and IDBI, scripting the vision/mission helped in creating a sense of ownership among people, and set a clear-cut direction to move ahead which helped in renewing positive energy, sense of excitement, and generate a renewed vigor among people.
Openness: Organizational openness is critical for creating a transparent organizational amd also building a sense of ownership among people. Openness helped in bringing down politics in the system and led to heightened collaboration and teamwork which helped in removing the pollutants in the system. This openness was able to clarify that the organizational agenda was above any other consideration.
Empowerment: Emphasis was laid on ensuring empowerment in decision-making. Fund managers were given the freedom to make decisions as the system had the required checks and balances in place to ensure every opportunity was optimized. Decentralization and empowerment enabled people to take action wherever possible in the interest of the organization.
Talent Management: Great institutions are built through the power of talent and so high priority was given to attracting, retaining, and growing high quality talent. Focus was on etsblishing the linkage between talent and assignments, clarifying that the important assignments would be talent centric and not seniority centric. Further, recognition, reward and promotion were linked to talent and contribution. As well as allowing a graceful exit option to those who could not cope with the new challenges.
Recognition: High performers were encouraged and motivated, and they were praised in public and made heroes for others to emulate. Recognition also aimed at morale building and was a way to signal people that they are valued, important and would be consulted for organizational decisions.
Ethical Governance: This is the backbone of sustainability of any institution. A clear connection was made among ethical governance, performance excellence, growth and continued sustainability. Corruption was unacceptable which was clear from the exemplary punishment given to those who did not comply.
Promoting Innovation: Focus on striving to do things differently aimed at ensuring there is continuous innovation. Introduction of variable pay, hiring talented people, fixing employee salaries closer to the private sector are examples of some unconventional initiatives in the public sector context. There was increased acceptance of listening to the contrarian views which generated greater interaction with the people brought in an entrepreneurial spirit.
Speedy Decision-Making: The velocity and speed of decision making, moving forward, and executing actions are critical in transforming organizations. There was demonstration of high risk-taking, and determination. The culture of upward delegation supported the need for speedy decision-making.
Performance Orientation: There was heavy emphasis on performance. Strong signals on performance were given by taking action against those found against the organization.Variable pay was introduced through performance-based incentives at par with the industry, which conveyed that performance was highly valued in the organization.
Restructuring and Role Clarification: Building role focus is core to making an organization sharply focused. This was done to ensure the organization did not lose its sense of priority when allocating resources and in decision-making. Workflow was restructured and the best technology and processes for data management were introduced which immensely changed the efficiency levels.

Leading from the front, making the change

A path-breaker, a risk-taker and a visionary in every sense, M. Damodaran, Retired IAS and Former Chairman, SEBI, IDBI and UTI talks about how he has taken the roads less traveled throughout his life and how these very risks have led him to such heights of success

How were the initial years in your career?
Before I started my career, I went through many challenges. At academics, I stood first in the school throughout. After school, as everybody was appearing for IIT exams, I did too. I qualified and went to IIT Madras. I still think it was a stroke of luck but many people don’t agree with me. Two and a half years after joining, I left IIT Madras and I had not even completed my second year. I discovered that it was not what I enjoyed; something didn’t click. After this instance, I had a lot to prove. I got into IAS without any academy, coaching and not even a postgraduate degree. And I only had one chance to pass the exam. At that time, I was working in Indian Bank at Vijayvada, so I had to travel overnight by train to take the exams and come back. It was a very difficult time of my life. I didn’t get a very high rank in the IAS; out of 71 students, my rank was 68 and if you exclude the reserve category and the army, I just had seven people below me. But at the end of 2 years, I scaled up to the 24th position because of good internal performance. This is the highest progression anyone had made in that batch.

What is your philosophy of life?
I have great belief in God. My belief is that, to every problem God has created, he has left a solution somewhere for us to find. Life is a treasure hunt; it is about going and finding that solution. I do not believe that there is any problem which has no solution. Sometimes you may not find it, sometimes somebody else will, sometimes you will find it quickly and sometimes it takes longer; but there is a solution.
I have always been a risk taker. I always tell people: ask yourself ‘what is the worse that could happen to you’? And if you can cope with that, then you can cope with anything else. I have been threatened with a dismissal twice in my life. I like to believe I did what I believed to be in public interest.
The way I have always looked at rules is this: If I believe something is right I hope someday people will be persuaded. If one waits for the approval, one looses the opportunity. My philosophy of life is based on the fact that if a rule or a law does not express or by necessary implication, prohibit something, then you can do it.

Give us some examples on how you have used this risk-taking ability to create a transformation during your time heading Indian banks?
At UTI for example, I introduced variable component for the first time in Indian public sector. The large variable component was introduced because I had to deal with people in a competitive situation. While competition at the private sector were paying larger sums to attract people, I did not have such freedom. So, I introduced the variable component. Someone asked me if the ministry had given permission; my response was that I did not even ask.
Another instance happened when I was asked to craft a strategy for Indian and UCO bank. We were getting a new chairperson for Indian Bank and that is how I got Ms Ranjana Kumar to move from Canara Bank where she was executive director. She was the first lady to have been appointed for that role in the bank and the board was not convinced whether she will be able to deliver. I was confident; I knew the bank and I had seen the people growing up with me, so I knew where the talent was. My stand was clear; I told the board that what the bank needed at that moment was someone who can play the role of the father and the mother and that is why we brought Ms Kumar in the selection committee. I could clearly see her playing father in addition to being a mother.
All these decisions did not always work. On one such occasion, I changed the timing of a block office in a particular day of the week; in that instant, I was not gently reminded that I did not have the powers make that change. I remember that at that time, I said I was sorry, but I requested to let the change remain. I am not averse to saying sorry if it serves the right cause.

What has been your most distinctive contribution in the organizations you headed?
I would say my belief in people. Basically, seeing my role as CEO and creating an enabling environment. I wrote restructuring for UCO, United Bank, Indian Bank and then for UTI and IDBI. I always chose to look at the strength of any of these organizations. If you devote time to the strengths, you devote time to the processes of building, but if you allow weakness to overwhelm you, you will never ever get started with what your inherent strengths are.
One of the things that are unique in troubled organizations is that people are always wondering if the new person assigned as the leader or a CEO will perform and deliver. Everybody needs a reasonably quick answer to wonder. My strategy was always to have one quick win that you can show so people can give you a chance. In a healthy organization, if you move on successfully, the question might not arise. In organizations that are under distress, questioning may not get expressed but you can sense it. Nobody will give you benefit of doubt in that kind of a situation.

If you could start all over again, what would you have done differently?
I would have done a number of things differently, based on learning that one has had over the years and experiences. Firstly, I would be a little better organized; secondly, and more importantly, I think somewhere along the way, one could have invested a little more in interpersonal relationships; the organizations that I headed would have benefited further if I would have done so. Clearly in defeats and failures, there is learning. These days, I tell young people what that old Japanese man said to the young American kid in “Karate Kid”: “Try and avoid a fight if you can; if you have to get into a fight, then get into it to win”.


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Topics: Leadership

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