A lot of eyes are on the emerging economies these days to see if they will continue to rise during the global economic crisis, or if the recession will end up stunting their growth.  IMF economists projected growth—albeit at a slowed down pace—for key emerging economies even as they expected contraction for the global economy as a whole.  The McKinsey Quarterly has two interviews with key finance leaders in two of the most important emerging economies—India and Brazil.  Over the last few years, Om Prakash Bhatt, of the State Bank of India, and Roberto Setubal of Banco Itaú, each took banks that were among their countries largest businesses and tackled major transformation projects.  In each case, these CEOs say that change was necessary, and their companies have benefited.  And the lessons they learned are applicable to other companies in transition.  Both say change has to involve executives leading conversations with managers throughout the company.

Roberto Setubal stresses that change begins at the top:

The role of CEO is key. If you want change to happen, you have to change your own ways. I realized that the decision-making process was a reflection of how I used to manage the company. So if you want the company to be more democratic, you have to allow yourself to be challenged by others. You have to commit yourself totally and really believe that this is the right way to go. This is very difficult in the beginning because sometimes I knew that I could make the decision much faster on my own.

But once we created an environment of discussing and listening to what others were saying and implemented a good process for making decisions, I could delegate more and rely on five or ten smart people with different backgrounds to make better decisions than one person.

Om Prakash Bhatt says that he made sure to work with managers throughout the company and spend important face time with trade union leaders:

These are important stakeholders, and I brought senior representatives from the unions and officers’ associations together in a meeting similar to the management conclaves. I spent four days with 30 leaders from across the country. Some of my best advisers at the bank warned that the leaders weren’t trustworthy and could be disruptive, but by being different and asking them to a conclave—like monks in a cave—I built up huge curiosity. They wanted to know what I was doing and to be a part of it. I told them I’d sit with them, but only if they came as friends of the bank. I think what hooked them was not only the quality of the discussions and the revelations but that the chairman was willing to spend so much time with them, eating and drinking, even singing and dancing.

Read the full interviews at McKinsey Quarterly online.  The Setubal interview is available here.  Om Prakash Bhatt's interview is here.