Page 193 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Organization Change and Development

Notes
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Caselet High Performance Systems

The World’s Local Bank: The HSBC SAGA
Niall Booker
Group General Manager and CEO- India HSBC Ltd.
The HSBC SAGA
The HSBC’s strategy, the official position as outlined by Chairman Sir John Bond is:
“Managing internationally is very different from managing domestically. Finally, the
critical factor for success in my judgment is the internationalism of your management
cadre and the board.”

Just to show how we have grown – and indeed, what Sir John has put into practice is what
he preaches – you can see the growth of the group since 1994, mainly looking at the risk
assets for example, from 197 billion dollars to 785 dollars! The number of countries increased
from 68 to 77, and the international management cadre is what we use to integrate our
businesses across the globe. We have moved from a very high percentage of the UK bank.
From all of 87% of UK nationals in our international management cadre in 1994—at the
end of 2004, it had dropped to 68% and percentage of other nationalities had grown quite
considerably from 13% to 32% in this period. That process is continuing, and it is being
driven by people on top.
From Localization to a Globalization

Essentially, our strategy is that since a bank is a leveraged play on the underlying
economies, so we look to select the better performing economies today and those that we
think might be better performing in future. We look to the developed mature growth-
economies, and also look to the future, to see the strong potential earning streams from
the developing higher-growth economies. We look to build up in this way, primarily
managing the revenue side, but we have also got a long Scottish tradition of managing the
cost side.
Our finance director, who is a true Scot from Glasgow always likes to say that we are a
bank with very long arms and very short pockets! So, he says, the key economic areas in
the future will be NAFTA – the North America Free Trade Area including, interestingly,
Mexico…and China! But 50% of the increase in world demand will come from developing
countries. In particular, China and obviously India are very important markets and, going
forward, Mexico and Brazil. Connected with that, we see opportunity in the diasporas of
today’s growth economies—the Chinese, Hispanic, Indian and other expatriate diasporas.
Our strategy is to be customer driven. We grew the bank by following our customers. We
originally started as a trade finance organization and we followed our customers around
Asia and into other parts of the world. We stressed very much the importance of
international teamwork; the ability to pick up the phone from India and talk to a guy in
Mexico enables you to get things done a lot more quickly if you happen to know the guy
at the other end of the phone. We have always stressed strong capital and financial position
and it is visible in the stock marketplace. We are pretty conservative and we have fairly
stringent risk management.
Fundamental Operating Strategy
 Customer-driven-stay close to our customers

Contd...

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