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Business Journal

An Asian Bank's Resilience After Economic Crisis

by Vibhas Ratanjee

Story Highlights

  • BCA's aim: make employee and customer engagement a habit
  • Bank reinforced coaching and continuous learning
  • Building and sustaining engagement systems is crucial

Commercial banks operating in Southeast Asia were severely affected by the economic crisis that hit the region in 1997. By January 1998, the nominal value of the Indonesian rupiah was only 30% of what it was in June 1997. Many banks were forced to close or to merge in order to survive.

One bank stands out for its resilience. Founded in 1957, Bank Central Asia (BCA) established itself as one of the largest banks in Indonesia before the 1997 crisis. In the aftermath of this crisis, the Indonesian Bank Restructuring Agency (IBRA) took full control of BCA in early 1998. The bank made a full recovery that same year. Since then, BCA has grown into one of the largest and most profitable banks in Southeast Asia.

Cultivating Strong Habits

What led to this impressive growth during perhaps the most turbulent time in the nation's and the region's history? According to Armand Wahyudi Hartono, BCA's director of information technology and operations, the bank's success boils down to improving performance by making employee and customer engagement a habit. Habits, he believes, are actions employed without conscious thought, and employees, managers and leaders at BCA have found ways of making employee and customer engagement a fundamental element of their work lives.

Jahja Setiaatmadja, BCA's president director, agrees and adds that the bank has created an environment that cultivates the engagement habit. He believes the support, coaching and mentoring that the bank's directors and managers provide to employees keep a consistent focus on engagement.

During Jahja's tenure as president director, BCA has been successful in increasing employee engagement, which has had a positive effect on customers and on business results. BCA received the Gallup Great Workplace Award in 2015 -- the first Indonesian company to receive this honor. The bank is in the top 10% of companies worldwide in Gallup's employee engagement database and in the top 20% of banks globally in Gallup's finance and insurance customer engagement database.

After companies have made engagement a part of their standards and procedures, how can they make engagement a habit? How can they encourage employees to bring their own creativity and initiative to engaging customers -- and engaging themselves? The BCA experience offers some key insights into achieving these goals.

Striking a Balance Between Old and New Employees

Jahja feels that BCA's workforce is unique, particularly in the tenure of its employees. About seven in 10 of its 21,000 employees have been with the company for 13 or more years. Recently, though, the company has been expanding aggressively, hiring about 4,000 people over the past 2 1/2 years.

Indonesia is an increasingly younger nation, with a median age of 27 years; 46% of its population is younger than 25. BCA is in a good position to capitalize on this demographic dividend. The challenge is balancing the dynamics of engagement between the older, established employees and their younger counterparts. The bank has achieved this by nurturing a heightened sense of attachment and loyalty among its employees, which has resulted in extremely low turnover levels (2% overall).

Employee Turnover at Bank Central Asia

Jahja disagrees with the assumption that younger employees are naturally inclined to be disloyal and change jobs at a whim. With the right coaching and mentoring, BCA's employees, old and young, can be kept engaged. Jahja has aggressively inculcated this belief through management development programs to ensure that the bank is engaging and retaining great talent.

"We need to find leadership talent from within BCA. And if we can't find them [within the bank], then we need to get the best from the industry," Jahja says. "But they should be willing and able to imbibe our culture and values."

To channel the raw energy from young employees productively, the bank instituted formal and informal knowledge sharing systems and created innovation awards. It also built "communities of practice" -- groups that employees are encouraged to join that "hack" operational and customer service problems through innovation and knowledge sharing.

Reinforcing Coaching and Continuous Learning

Coaching and continuous learning are other conscious habits that BCA has worked to cultivate among its leaders and managers. Gallup research at BCA has shown that coaching has a cascading effect: Those who receive coaching are more likely to coach others than those who don't receive it.

Coaching plays a vital role in promoting continuous learning at BCA. The bank emphasizes coaching, but specifically during down times. The last few years have been unpredictable for the Indonesian economy, and coaching and learning during lean periods are seen as a way of building capacity and creating leadership readiness.

Coaching and continuous learning have been used to replace old habits with new ones. Armand believes that an effective way of implementing best practices is to crowd out old habits with new behaviors, particularly when working with emerging leaders.

Paying Attention to "B Players"

Though BCA has invested extensively in attracting and developing talented "A leaders," it doesn't ignore employees whom management regards as the core of the bank: the "B players" who make up the bulk of the bank's employee population. Jahja stresses this: "In my opinion, there are two types of people who work for you: those who are really talented and driven with critical thinking abilities -- who make strategies that help you grow -- and those who are 'ordinary,' hardworking people who might not be looking for rapid promotions. [They] may just [be looking for] good working conditions and a great [work] environment, but they will work hard nonetheless." BCA keeps a solid focus on B players even as it puts in place an effective program to develop A leaders through talent and succession management.

BCA serves more than 13 million accounts, so it must ensure that its well-oiled transaction engine is adequately staffed to provide efficient service at all times. Choosing B players and positioning them in crucial operational positions is a key strategy.

Building and Sustaining Systems That Breathe Engagement

Keeping employees engaged at a bank the size of BCA -- spread over a geography as diverse and dispersed as the Indonesian archipelago -- is daunting. Intense communication about employee engagement throughout the year is also a big part of the bank's engagement success. Lianawaty Suwono, BCA's chief of human capital management, says, "Our intention . . . is to educate all teams on how to make the right action plans that are feasible to execute. We feel we hit the right spot for developing true engagement with all team members as well as generating better results."

When it comes to increasing engagement, "overly scripting habits as standards or expectations is not the point. Just rewarding employees also does not necessarily form great habits," Lianawaty says. "Instead, BCA makes it clear that each habit is firmly rooted in the company's values: customer focus, integrity, teamwork and a continuous pursuit of excellence." These values, along with specific behaviors associated with each, provide clear guidelines that reinforce productive habits among managers and employees, and form the blueprint for individual, team and organizational performance and growth.

The company is automating its processes and is pioneering the use of video banking to serve its customers. Armand feels this investment in technology will not only help BCA meet increasing customer expectations but also free associates to build and strengthen relationships with customers.

"We are in the human technology business," Armand says. "The idea is to automate processes that are a waste of time for our team [members] so that they have more time to perform those tasks which are more important, with a greater focus on their customers."

The Road Ahead

After a period of unabated growth, the Indonesian economy is again at a crossroads, with worrying echoes of the crisis in 1997. However, Jahja and Armand see the current slowdown as more of a correction -- perhaps even a necessary one. "During a slowdown, you are forced to be efficient, forced to appreciate what you have," Armand says.

Mahatma Gandhi once said, "Your actions become your habits, your habits become your values, your values become your destiny." Cultivating good habits pays off. For BCA, building a habit of engagement is the key to its destiny and perhaps an important factor that guides its vision of becoming a major pillar of the Indonesian economy and the bank of choice for all Indonesians.

Gallup


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