In part one of a two-part series, Pichaya Changsorn reports on a seminar last week entitled "Visionary Leadership", which was all about changes to some of Thailand's leading organisations.

Competitors will find it difficult to imitate Siam Commercial Bank (SCB) these days, because it is harder to copy and profitably operate a retail banking business than it is to copy a wholesale operation, says executive chairman Vichit Suraphongchai.

Moreover, the process of change that has so far transformed the bank is about to make it even more different to others in the business, he told a seminar entitled "Visionary Leadership", organised by the Thailand Management Association.

Like other Thai banks, SCB previously relied heavily on wholesale banking, such as dealing with large corporate clients. However, learning from the 1997 economic crisis, Thailand's third-largest bank has shifted to an emphasis on retail banking, which now contributes nearly 60 per cent of its profits and differentiates it from many of its competitors.

"But this is not enough. We're still a goldfish, and other fish could jump into our jar sooner or later. We aspire to change from being a fish to becoming a giraffe. The goal of our change programme is, therefore, to evolve into a different species," Vichit explained.

Since embarking on its "change programme" five-and-a-half years ago, SCB has spent Bt7.5 billion to overhaul many of its business foundations. SCB now has Thailand's most extensive retail-banking network, with 817 branches and about 4,000 ATMs.

Vichit said that before kicking off such a change programme, the first need of any organisation was to know the "end-game", the goal that the firm was striving to reach.

"It's like the Titanic: if it moves in the wrong direction and sails into an iceberg, the ship will sink, regardless of how well it has been prepared. First, we need to make a fundamental decision: what it is we want to be? For SCB, our end-state is to be a universal bank," he said.

The bank's change programme is being run full-time by the bank's own staff, chosen from those known to be top performers - energetic workers and people with a mind to fight.

"If you pick unwanted guys, you will definitely not win," Vichit said.

When asked how he convinced the board to approve the costly change programme in the initial phase, when there were no previous results to show, Vichit bluntly replied, "We didn't have any choice. We didn't have an alternative plan. However, we 'fixed the car as it was running'," he said, explaining that the bank had reviewed and adjusted the plan while implementing it.

The first phase, which took two years, was crucial, because it was a "make or break" effort, Vichit said. SCB had recognised it needed its staff to "buy in" to the change programme, so it had done that partly by promising there would no lay-offs, demotions or pay cuts because of it.

The most important thing was demonstrating some "early wins". Among the projects implemented during the first phase were the redesigning of both the retail banking process and the physical branches, as well as introducing the predominantly purple colour for brand awareness.

Setting the vision is also very important, he said. SCB's vision is to become the bank of choice for its customers, shareholders and staff.

The second phase, from 2004-05, was geared towards "accelerated growth on all fronts", and the theme of the current third phase is "being different".

SCB's achievements from its change programme are many, including an increased return on equity, from 6 per cent in 2000 to 18-20 per cent over the past four years. Its core earnings growth, or net profit before extraordinary items, has risen to 25 per cent annually. And it has moved up from the No-4 spot to become Thailand's third-largest bank in terms of market share, and the gap is narrowing on the runner-up position. It should not be long before SCB takes the No-2 position, Vichit said.

SCB has recorded the fastest growth in asset value among Thai banks. It has achieved the largest market capitalisation among Thai banks, even though it ranks third in terms of asset size. And from a largely wholesale banking concern, it has successfully shifted to a situation in which retail banking now contributes nearly 60 per cent of the bank's net profit.

Last year alone, SCB added 101 branches and 1,025 ATM machines to the Kingdom's largest retail banking network, so that it now has 817 branches and about 4,000 ATMs.

Moreover, Gallop's worldwide banking surveys show SCB's customer satisfaction rating has climbed to a position very close to the best banks in the world, Vichit said.

Speaking at the same seminar, senior executive vice president Deepak Sarup said for any business organisation attempting a change programme similar to SCB's, it was essential that the CEO be committed to it. He said Vichit had chaired Change Committee meetings to review the programme's progress every two weeks for the past five-and-a-half years.

Deepak said SCB aspired to become "a unique Thai institution with world-class capabilities". To achieve that goal, the bank needs to attain five principals: deep relationships with customers, optimised processes, innovative products, differentiated capabilities and group synergies.

Next: Total Access Communication CEO Sigve Brekke on "karaoke capitalism".