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
2Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
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
3Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
The Change Program Steering Committee
The Change ProgramManagement Office
Project Review Group
Project Review Group
Project Review Group
Project Team
Project Team
Project Team
Project Team
Project Team
Also, we established a clear and effective governance framework
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… 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
5Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
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
6Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
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
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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
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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
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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
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• Managing Change
• The Road Ahead
AGENDA: Part II
“ Walking the tightrope” - The change journey of SCB
11Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
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
12Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
• 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
13Copyright Siam Commercial Bank - All Rights ReservedTMA Day : May 3, 2007
• 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
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#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%
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• 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.
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• 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
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• 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
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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
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“….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