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A Man For All Regions

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When he was executive director at the Oriental Bank of Commerce (OBC) in 2005, one of M.D. Mallya's key challenges was integrating executives of the erstwhile Global Trust Bank (GTB) into OBC's management structure. It was a challenge dealing with bruised egos of GTB's senior management staff and the apprehensions of OBC's, besides managing the shift in cultural expectations of talented folk from a private sector bank moving into a public sector bank (GTB was merged into OBC by regulatory diktat).

Mallya got OBC's human resources department to create strategic business units that absorbed the incoming managers from GTB, carefully finding the appropriate slots. He then tackled the tougher task of managing the expectations of people whose pay grades were different (read much higher) than those in OBC.

That episode displayed Mallya's innate talent for managing human resources. When he later moved to Bank of Maharashtra (BoM) as chairman and managing director (CMD) in 2006, he was acutely aware that he was taking charge of a predominantly regional player at a time of transition in the broader banking industry.

Former officials at BoM say that he told his team to put all other initiatives aside; first, he had them put in place a strong internal communications effort to keep all levels of staff informed about what the bank's strategy would be, where it was going, and how.

Fast forward to when he joined Bank of Baroda (BoB) as CMD in 2008, and some of the same approach comes into play. Douglas McGregor, one of the earliest management theorists, introduced the concepts of Theory X and Theory Y. The former says the management's role is to coerce and control employees, while the latter helps realise their potential to reach common goals. Mallya has been a practitioner of Theory Y.

How did that extend to managing BoB's business? Before Mallya came in, outgoing CMD A.K. Khandelwal had already done his bit to clean up the balance sheet after the bank went through some turbulent years. "Mallya took stock and proceeded to put the shine on it till it sparkled," says Arun Tiwari, general manager of BoB's greater Mumbai zone.

An industry insider talks of Mallya's handling of BoB's balance sheet as the difference between homeopathic and allopathic medication. The former might be slow, but eventually brings long-lasting relief.

As executive director in OBC, Mallya was a great believer in the Indian entrepreneurial spirit, lending aggressively to small and medium enterprises. To OBC employees, he spoke of how one needs to blend the difference between the entrepreneurial style of the south and the north, and offer a product that was the result of a marriage of the two.
At BoM, his erstwhile colleagues say, he emphasised on efforts to convert a regional bank into a more broad-based bank. He was accessible, always open to fresh thinking and always ready to reward and acknowledge that thinking publicly when it worked. Some of the initiatives he began continued after his departure to the bigger BoB.

How do people view his progress? "He is a change agent," says the head of a leading consulting firm. "He takes what the institution may have struggled with for some time, and puts together a consensus on how to approach and deal with it." Senior management colleagues in both BoM and OBC endorse that view.

Tactically, the bank has tended to follow its large domestic business clients that are making a beeline for new opportunities emerging in other countries — be it East Asia or Africa — or desired destinations, and where a large Indian diaspora is present. The other decisive factor is the presence of trade links. This makes eminent sense, and also reflects the muted appetite for business risks.

Recently, Mallya is believed to have said that he wanted a safe business, and under his stewardship, BoB's international business has opted for that route — they have expanded operations by opening 20 new branches in his tenure, the latest being New Zealand. The aggressive lender in OBC has morphed into a more conservative banker in BoB.

"That evolution happens when you get into a large bank, with multiple stakeholders and entrenched interests," says the head of a research firm. "It is a larger stage, and the scale of the impact of decisions is larger."

But some things never change for Mallya; he still loves his fish cooked Mangalorean style, even if his career graph has taken him from the north to the west (apart from up, of course).


(This story was published in Businessworld Issue Dated 28-11-2011)