Mannarkkad Rural Service Co-operative Bank: Innovating at the Edge

In November 2016, the secretary of Mannarkkad Rural Service Co-operative Bank Ltd. (MCB) based in Kerala, India, learned that the prime minister of India had announced that large-denomination currency notes would be invalid as of midnight November 8. This demonetization move was to eradicate unaccounted for “black money” from the nation. Co-operative banks like MCB were excluded from the purview of India’s central bank, the Reserve Bank of India, and as a primary agricultural credit society providing short-term credit to rural borrowers, MCB stood out from similar institutions by providing best-in-class banking services and constantly innovating to meet its vision of providing “the pleasure of personal banking” to its customers. MCB was the only bank in India to provide 24/7, 365-day banking operations through its overnight counter, and through a series of innovations, it had successfully pushed the boundaries of a rural co-operative bank to provide maximum convenience to its customers. The secretary of MCB now had to make some critical decisions: How should MCB handle the demonetization crisis with its existing and potential customers? Should MCB keep its overnight counter open? Should the secretary alert the bank’s micro-ATM agents? Would MCB’s parent bank provide funds? How could he address these concerns in a way that would maintain the goodwill MCB had built up among its customers over the past 27 years?

The case is suitable for a graduate-level course on leadership and change management, innovation and entrepreneurship, or human resource management. This case would be best placed after the basics of innovation and organizational change. Students can identify the innovations implemented over time and assess how the organization inadvertently prepared to face external shocks. After working through the case and assignment questions, students will be able to<ul><li>evaluate the role of a change agent in triggering continuous change through service innovation;</li><li>describe how firms innovate at the edge, and explain how these innovations act as differentiators among competitors;</li><li>demonstrate how innovating at the edge prepares a firm to tackle external threats or crises; and</li><li>define business model innovation and the design elements used for value creation.</li></ul>

• organizational change
• innovation
• crisis leadership
• demonetization