AGENDA: Part II - scb.co.th · Not anchoring changes in the corporation’s culture ... primary school level painting competition a general knowledge quiz competition nationwide for

1Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007

• Managing Change

• The Road Ahead

AGENDA: Part II

“ Walking the tightrope” - The change journey of SCB


1. Not establishing a great enough sense of urgency

2. Not creating a powerful enough guiding coalition

3. Lacking a vision

4. Under-communicating the vision by a factor of ten

5. Not removing obstacles to the new vision

6. Not systematically planning for and creating short-term wins

7. Declaring victory too soon

8. Not anchoring changes in the corporation’s culture

Walking the tightrope is fraught with risks, early on we identified and tracked 8 key program risks:

* “Why transformation Efforts Fail”, Harvard Business Review, Professor Kotter, Harvard Business School


The Change Program Steering Committee

The Change ProgramManagement Office

Project Review Group



Project Team

Project Team

Project Team

Project Team

Project Team

Also, we established a clear and effective governance framework


… think different… act different… feel different

Organization Change means to…..

is about … managing emotions

is enabled by…. building trust

OurAspirations

OurSecurity

Yet, the hardest part of managing changewas in dealing with human emotions


Why is Organizational Change so difficult?

Break change into small pieces

Manage the pieces

TRADITIONAL MODEL

Manage the dynamic

Not the pieces

CHANGE MODEL

At the same time as implementing multiple projects spanning across the Bank


Core Elements of the Communication Program

UNDERSTANDCONTEXT

SEEKALIGNMENT OFACTIONS

BUILD TRUST

STIMULATEDIALOGUE

DISTRIBUTEINFORMATION

PROVIDEUPDATES

ENCOURAGEPARTICIPATION

FACILITATELEARNING

PREPARE FORIMPLEMENTATION

Therefore, the program was anchored on a solid communication strategy


Intranet Web Sitehttp://web.scb.co.th/~cpmo/

Webcast

Change Program VCD

Newsletters

Change Program Forum

Multiple communication channels were used to get the messages across


EngagedEngagedEmployeesEmployees

2001

2006…Adapted from “The Psychology of Change - How Change Communications Moves People”By Ira Kerns et al

Commitment“I will do”

Confidence“I can do”

“I understand”Understanding

Agreement“I agree”

The thrust of the communications has gradually evolved towards seeking employee engagement


SCORECARD

1. ProcessesAre we on schedule?Is effort focussed on key areas?Is there effective monitoring?

2 ResourcesHas effort so far matched results achieved?Do we have the required resources to complete the project?

3. Business RisksWhat is the risk of failure?What are the key risks?Are mitigation plans in place?Is there good communication?

4. FinancialWhat are the costs to complete?Are benefits identified and tracked?

Status Indicator

Red Indicates that the project has major show stoppers and requires immediate attention of the Steering Committee

Yellow indicates that some significant problems exist that need early resolution to get the project back on track.

Green indicates that the project is on track but minor road blocks may exist that need to be fixed by the project team.

R

Y

G

“Balanced Scorecard Template”

+ or - or = indicates positive, negative or no change to status when compared to the last report

Timely and effective execution is facilitated by close monitoring of every project


• Managing Change

• The Road Ahead

AGENDA: Part II

“ Walking the tightrope” - The change journey of SCB


WHAT WE HAVE SET OUT TO DO IN 2007

Major thrusts

#1. Dramatic market share growth in the Hire purchase

segment

#2. Aggressive market share growth in SME lending

#3. Strong dominance in the Retail segment

#4. New heights of Service excellence

#5. Risk management capabilities in-step with business

growth

#6. Community-based CSR projects


• After the acquisition of SCBL last year, the plan for 2007 is to double theHire Purchase portfolio,moving from #4 to #3 or better (in market share terms).

• The growth will arise from leveraging the SCB retail network in 2007 and the existing state-of-readiness of systems and structures.

#1. Dramatic market share growth in the Hire Purchase Segment

Hire Purchase Performance & Target

0

20

40

60

80

100

120

Dec05 Jun06 Dec06 Jun07F Dec07F

Billion BahtLoans outstanding at end of period


• The implementation of the new SME business model resulted in 37% growth in2006 and the target for2007 is an aggressive growth rate of 46%.

• Market position expected to move up to #5 this year(from #6) and position to be among the top 3 in the following year.

Billion Baht

SME Lending Performance & Target

#2. Aggressive market share growth in SME lending

0

50

100

150

200

250

Dec05 Jun06 Dec06 Jun07F Dec07F

Loans outstanding at end of period


#3. Strong Dominance in Retail Segment

• Further build CRM capabilities to acquire better knowledge of customer needs. Effectively use this knowledge to qualitatively broaden customer base and increase wallet share

• Support initiatives in the pipeline– Enterprise Data Warehouse – Event-based campaigns – Customer & channel analytics

• Planned initiatives– Integrate front-line platforms to

provide consistency of customer experience across SCB group.

2007 Retail Positioning

Branches (#1) +70ATMS (#1) +1,000

Mortgages #1Credit cards #1Bancassurance #1Asset management #1

GrowthNo. of customers ~20%Branch transactions ~15%ATM transactions ~40%


• Drive world-class levels of customer engagement to the next threshold (comparable to any similar sized bank, anywhere)

• Use service-excellence to increase customer intimacy and product holding rate.

#4. New Heights in Service Excellence

Target 2007

CE11 = 4.589X Percentile

55%

5%13%

27%

End 2006

CE11 = 4.5692nd Percentile

50%

17%

28%

5%

Not Engaged CustomerFully Engaged Customer Actively DisengagedEngaged Customer

10%

30%

25%35%

End 2005

CE11 = 4.3575th Percentile

Baseline 2003

26%

37%

12%

25%

CE11 = 3.91 31st Percentile

Independent Survey by Gallup

CE11 = Customer Engagement ScorePercentile score is based on the Gallup global database of all companies in their CE11 survey.


• Proactively and independently monitor and adjust key risk parameters (policy, underwriting standards, scorecard) to control credit quality in high growth portfolios, i.e. SMEs and Hire purchase.

• Propagate risk management framework across the SCB Group.

• Position for compliance with Basel II Standardized Approach in 2008 and for the IRB Approach soon thereafter.

• Progressively moving towards Risk Adjusted Return for capital allocation decisions.

#5. Risk Management in-step with Growth


• Major push towards meeting our CSR obligation through targeted community focused projects with active volunteer participation from all SCB group employees.For example :- Youth Development Project in collaboration with

selective schools to promote better understanding of basic money management

- Kla Mai Fai Roo Project (Challenge 100)primary school level painting competition a general knowledge quiz competition nationwide for secondary level students“Kla Mai...Sang San Chum Chon” : a nationwide university level competition to design a project that enhances the community’s quality of life in a sustainable way

- Support the Reforestation Project in the Chiangrai hill tribe areas

#6. Community-based CSR Projects 2007


Embracing “FIVE” Principles

Deep Relationships

Optimized Processes

Innovative Products

Differentiated Capabilities

Group Synergies

A Unique Thai Institution

with World Class Capability

The contours of the far horizon are at best hazy, but the broad steps of the journey are clear


“….all the business of life, is to

endeavor to find out what you

don’t know by what you do; that

is what I called ‘guessing what

was at the other side of the hill’.”Duke of Wellington

“ Walking the tightrope”: The Change Jouneyof SCB

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AGENDA: Part II - scb.co.th · Not anchoring changes in the corporation’s culture ... primary school level painting competition a general knowledge quiz competition nationwide for