When Arundhati Bhattacharya retired as chairperson of the State Bank of India (SBI), in October 2017, many people thought her corporate journey had reached its end.
The break was well deserved. Bhattacharya had just wrapped up a 40-year tenure at India’s largest bank, which held 38 trillion rupees in deposits as of end-September 2021, employing more than 245,000 people in over 22,000 branches. As SBI’s first woman chairperson, Bhattacharya steered some radical changes, including a new appraisal system involving budgets and targets, and digital initiatives such as digital-only branches and mobile apps for customers. In 2016, Forbes ranked her 25th among the world’s 100 most powerful women and the fifth most powerful woman in finance.
In April 2020, a few years into retirement, Bhattacharya was elected chairperson and CEO of Salesforce, India. Her move to Salesforce, a US software company with a $210 billion market capitalization as of this writing, marked the beginning of a bold new professional chapter on several fronts: a shift from the public sector to the private sector, from banking to technology, and from working for a legacy Indian institution to an American company that was only starting to expand in the country.
Those familiar with Bhattacharya’s journey might not be surprised by this move, however. Bhattacharya has always believed that lifelong learning is key to success. In her 2018 TEDx talk, she explained how she approaches every situation “with a questioning mind and a learner’s humility.”
In this edited interview with McKinsey, Bhattacharya spoke about her leadership mindset, lessons learned from her big transition, and what it takes to succeed in this new era of uncertainty, change, and rapid technological progress.
McKinsey: What made you renew your professional journey after such an extraordinary career?
Arundhati Bhattacharya: During my yearlong gardening leave after retiring from SBI, I used to interact a lot with the youth. And I was continually asked one question: “How do you see the future, and what do you think is in it for us?”
When I think of the future, I see people having multiple careers. People will have to unlearn, relearn, and be on a learning curve for a very long time—in fact, for as long as they work. All the cycles that we are seeing today, whether economic cycles, climate cycles, stock market cycles, or technology cycles, are getting shorter. As a result, you are always on a treadmill. If you aren’t, you are just going to become redundant; your sell-by date is going to come much faster.
People will have to unlearn, relearn, and be on a learning curve for a very long time; in fact, for as long as they work.
This is how I would answer the question. I’m sure they felt skeptical hearing my response, wondering how much of this advice I, myself, have experienced, since I spent 40 years working at one institution.
So Salesforce was an opportunity for me to really test out whether I could walk the talk.
When I was the chairman of SBI, I also often wondered, “Am I able to do all of this because I have a ready-made platform on which to operate?” SBI’s chairmanship, after all, is very well defined in terms of what it can and cannot do. Salesforce in India, on the other hand, was more like a start-up when I joined. The sales function was set up in India only three years before I came on board.
McKinsey: What was your transition to Salesforce like initially?
Arundhati Bhattacharya: I was the first CEO of Salesforce in India. There was no one to tell me my mandate, what I was required to do, and how I should do it. I had to carve out a position for myself.
When you are bringing in a new person and carving out spaces, there are some empty spaces that you can occupy, but you also carve out certain spaces from what others are doing. And that always meets with a lot of resistance. I find it funny, but human beings are just as territorial as animals.
The corporate structure in India [typically has] not only sales and distribution functions but also large support and engineering, products, marketing, and R&D functions. At Salesforce, no other country, other than the US, had all these functions in one place. As a result, I had to think of ways to create a structure that worked for India.
Adapting leadership styles to crisis mode
This whole journey of creating a meaningful role that would contribute to the operations in India, as well as globally, took time. Making people see the value of the investment that they were making in India was a big job.
McKinsey: Many CEOs tell us that they need to be a trisector athlete in today’s world: you need to be able to navigate the public, social, and private sectors. Can you reflect on some of the differences between the sectors and what each can learn from the other?
Arundhati Bhattacharya: The differences are more apparent in areas like incentives and performance management. The private sector, for example, places far more emphasis on the HR function. The measuring of success and failure is done in a more minute and scientific manner. For example, at Salesforce, I have a business partner from the employee-support team who I meet with at least once a week to get feedback on my work.
There is also a tendency to be more transactional in the private sector and to give money or stocks to make employees stay or do better. I don’t think that is what everybody wants. A word of appreciation in a group or telling someone that you are grateful for the way things are being done can sometimes be far more valuable to a person than just money and stocks.
In comparison, in the public sector, you are left to your own devices. For instance, I had no way of either incentivizing or disincentivizing people at SBI. During my tenure, we did not have enough system-driven processes to enable us to measure performance accurately. Seven to ten years ago, for instance, bank managers typically took only one and a half minutes to write a full report for their subordinates. The promotion interviews lasted for about 20 minutes. The employee was not seen as someone that really and truly needed your attention, or someone you needed to partner with.
Over the past few years, I have seen SBI’s HR practices evolve and improve. It is extremely important, especially for all Indian legacy industries, to adopt more advanced HR practices so that they can measure—and analyze—the failures and successes of people.
McKinsey: You made some pioneering technology transformations at SBI. How important is digital transformation for the success of Indian businesses and the country at large?
Arundhati Bhattacharya: For a country of our size, and with our kind of population and geography, we will never attain financial inclusion without very strong technology backing.
I think it is extremely important, especially for all Indian legacy industries, to adopt more advanced HR practices so that they can measure—and analyze—the failures and successes of people.
I realized this when SBI was creating bank accounts under the Pradhan Mantri Jan-Dhan Yojana [PMJDY] scheme, which was launched in 2014.
We had been trying to achieve financial inclusion for 14 years before that, but it wasn’t successful. Most people in India don’t have addresses in their villages, and there is so much migration of labor. That makes it harder for people to do the KYC [know-your-customer] procedures required to open a bank account.
What really enabled PMJDY was the government’s digital initiative to launch the Aadhaar number, which helped us in determining the identities of people. This is the sort of enablement India needs for inclusive growth. If we are talking about raising the standards of living of all Indians, digital is the only way up.
It is too costly to deliver all the services to all corners of India through a brick-and-mortar approach. If you do it digitally, you can not only deliver it to the far reaches of the country, you can also hyperpersonalize it by using AI and robotics.
If we are talking about raising the standards of living of all Indians, digital is the only way up.
Digital scaling is also very close to my heart. It is what enables and empowers people. Imagine the kind of pedagogy currently delivered in urban and rural schools, for example. There is such a big divide. There are some rural schools with only three teachers. If you enable these schools digitally, they can deliver the best education material remotely, even to the farthest village. The same is true for healthcare. We need far more digital enablement so that the best doctors can consult and give the right advice to people in remote areas.
I think the government has done a great job in creating India Stack,
followed by the Open Credit Enablement Network [OCEN].
McKinsey: The world in which you led SBI is radically different from where we are now, with factors like the COVID-19 pandemic and climate action and the hyperacceleration of digital and technology. What are some qualities needed to be a successful leader today?
India’s path to financial inclusion through digital transformation
Arundhati Bhattacharya: First and foremost, a leader must have a very clear vision, both for the near and long term. Creating a long-term vision is difficult because there aren’t sufficient data points. But it is important to have that ability to create a scenario out of a few data points.
Second, you need to be a good communicator to get your point of view across and get the buy-in of the people. You have to create an environment where each person can look at your vision and think, “Yes, this is where I need to be, or where I want to be.”
Third, leaders must find a way of ensuring that they can play to the strengths of their employees, not weaknesses. I always say one should put the round pegs in round holes and square pegs in square holes. One of the bank branches I was tasked with heading at SBI when I first joined was rated the lowest in the ranking of our inspectors. When I left, it became the second highest. I realized that many people in that branch could be doing different jobs that they would be better at. So I shuffled people around, which helped to increase their productivity.
Finally, you must be able to change your management style depending on the situation. In times of crisis, you need to lead from the front. There are other situations where you can retreat to the back and allow your teams to do the work, because if you don’t do that in good times, you will not be able to achieve on multiple fronts. You are, after all, one person with one brain, two hands, and only 24 hours in a day.
As a leader, you can’t get locked into something either—you need to be flexible. When I was in the middle-management rung at SBI, my peer group used to tell me that I had an aggressive body language. My own self-image, on the contrary, was that of a very nice, sweet person. I felt like they were stereotyping me because I was a woman.
Later, when we went to a seven-day management course, where our group discussions were recorded and played back to us, I was amazed at the kind of aggressive body language I was displaying. It was a real eye-opener. I realized my peer group had given me genuine feedback.
After some reflection, I realized that I had developed that management style while working at the branch that had needed a lot of work. Since my approach had worked at the time, I had unconsciously accepted that as a style that succeeded. I did a lot of work on myself to change my management style.
McKinsey: Is this new professional chapter making you rethink what you would like your legacy to be?
Arundhati Bhattacharya: This question was also asked by the media when I became chair of SBI. My answer to them was that I just want to leave the institution stronger and better than when I joined.
A legacy builds itself. I don’t think you have to go about building it brick by brick. You do the right things, and then the legacy automatically follows.
There’s no point in wasting time thinking about what I’m leaving behind. You try to do the best you can at this point of time. Live in the moment, as so many of our gurus say. And then, let the legacy take care of itself.