ICICI bank’s leadership in the industry is exemplary. But nothing to compare its ability to spot, groom and deploy leaders in-house.
IT SEEMED like a random move then. In 2002, Sanjoy Chatterjee, 33, an almost unknown face to the outside world, was assigned to head ICICI Bank's UK subsidiary. Asking a young and relative inexperienced executive to lead the bank's UK operations may have looked risky and reckless to many at that time. But late last year, when the bank rejigged its top brass, the plot began to fall in place. Chatterjee got elevated to lead its critical international business and corporate banking divisions. His elevation hints at two things: the bank's phenomenal talent screening process and its courage to bet on young and bright executives much ahead in their careers.
Chief executive officer K V Kamath, 59, knows that that's the only way ICICI Bank will be able to maintain its edge and growth going forward. The average age of Indians will fall to 28 in the next 10 years, he says. In the meantime, ICICI Bank's appetite for leaders and managers will grow voraciously. “We have to ask ourselves: who should lead a group whose average age is 28?” Kamath asks. “Will be it a 58-year old, a 48-year old or a 38-year old? I believe it should definitely be towards 28. Whether it is 38 or 48 is debatable, but it cannot definitely be 58.”
Kamath's poser may sound provocative. CEOs across India Inc. are looking to nurture leaders to take their companies to tomorrow's youthful market. Every HR head polled for workplace surveys lists leadership development as a major challenge. But the trouble is that many programmes they have in place to spot talent aren't working. There is an urgent need to find a well-oiled machine that delivers tailor-made leaders in needed numbers.
There's one place they could surely look for some clues: inside ICICI Bank, where a strong system has been put in place to find answers to the question. And oddly enough, it is designed to reduce dependence on the one man who enjoys the enviable reputation of spotting and grooming more leaders than any other CEO in India Inc.
Right from 1996, when he took over as the bank's head, Mr Kamath has created an incredible breeding ground that spawned leaders. Many like Shikha Sharma, Ananda Mukherji, Nachiket Mor, Chanda Kochar, Madhabi Puri Buch, Vishakha Mule and Bhargav Dasgupta have blazed their way to individual glory. They have moved from one assignment to another, taken up different leadership roles and served the bank with distinction. “Mr Kamath has an amazing ability to pick a leader and identify potential way beyond what the people believed in. Less than 20-25% of us had any clue where we were headed in our careers," says Kalpana Morparia, the bank's joint managing director who worked closely with Kamath for more than two decades.
Another institution would have let this go on as far as possible. But shortly after the long-awaited reverse merger between ICICI and ICICI Bank in 2000, Ms Morparia and group HR head K Ramkumar decided to do some plain-speaking with their boss. The bank should make the transition from depending on Kamath's personal genius to working off a formal system, they argued. Their logic was sound: from a 1,000 member organization, the bank was rapidly moving to a scale—with a 7,000-strong team—where it was well-high impossible for Mr Kamath to personally know every senior leader.
Initially, there was no buy-in. They then appealed to his heart and head. They put forward a list of names for Mr Kamath to evaluate for a particular assignment. “How well do you know them, sir?” they asked him. Mr Kamath knew a few on the list—but drew a blank on the rest. Next came the emotional pitch: “What would happen when you step down as CEO? We aren't suggesting taking away your veto and judgment, but when we are a 50,000 strong organization, you can't do it all yourself? You simply won't know who is where. Besides, wouldn't it make more sense to pass on the secret of what it took to select and nurture talent to other leaders at ICICI, while you were still around?" That last bit seemed to cut ice. Mr Kamath thought hard about his legacy—and finally agreed.
Since then, the shift from a CEO-centric model to an institutionalized process of leadership development has already evolved through six annual cycles. Mr Ramkumar, who modified the model for the bank based on his experience in mature organizations like HLL (now HUL) and ICI, worked hard with the top team—especially Kamath, Morparia and the ICICI Bank board led by chairman N Vaghul—to create a system that has consistently thrown up the 12-odd people that the bank needs to take up critical leadership roles across the ICICI group every year.
But in making the transition, there was one critical thing that Mr. Ramkumar and his team did right: they didn't throw the baby out with the bathwater. So, ICICI continued to visit the best B-schools and hire the best CAs, just as they had done since 1996. They also persisted with the entrepreneurial model that Mr Kamath had consciously adopted. Each of the sub businesses—be it ICICI Ventures, ICICI Home Finance, et al—were handed over to an entrepreneur, who was rated as core talent.
IT SEEMED like a random move then. In 2002, Sanjoy Chatterjee, 33, an almost unknown face to the outside world, was assigned to head ICICI Bank's UK subsidiary. Asking a young and relative inexperienced executive to lead the bank's UK operations may have looked risky and reckless to many at that time. But late last year, when the bank rejigged its top brass, the plot began to fall in place. Chatterjee got elevated to lead its critical international business and corporate banking divisions. His elevation hints at two things: the bank's phenomenal talent screening process and its courage to bet on young and bright executives much ahead in their careers.
Chief executive officer K V Kamath, 59, knows that that's the only way ICICI Bank will be able to maintain its edge and growth going forward. The average age of Indians will fall to 28 in the next 10 years, he says. In the meantime, ICICI Bank's appetite for leaders and managers will grow voraciously. “We have to ask ourselves: who should lead a group whose average age is 28?” Kamath asks. “Will be it a 58-year old, a 48-year old or a 38-year old? I believe it should definitely be towards 28. Whether it is 38 or 48 is debatable, but it cannot definitely be 58.”
Kamath's poser may sound provocative. CEOs across India Inc. are looking to nurture leaders to take their companies to tomorrow's youthful market. Every HR head polled for workplace surveys lists leadership development as a major challenge. But the trouble is that many programmes they have in place to spot talent aren't working. There is an urgent need to find a well-oiled machine that delivers tailor-made leaders in needed numbers.
There's one place they could surely look for some clues: inside ICICI Bank, where a strong system has been put in place to find answers to the question. And oddly enough, it is designed to reduce dependence on the one man who enjoys the enviable reputation of spotting and grooming more leaders than any other CEO in India Inc.
Right from 1996, when he took over as the bank's head, Mr Kamath has created an incredible breeding ground that spawned leaders. Many like Shikha Sharma, Ananda Mukherji, Nachiket Mor, Chanda Kochar, Madhabi Puri Buch, Vishakha Mule and Bhargav Dasgupta have blazed their way to individual glory. They have moved from one assignment to another, taken up different leadership roles and served the bank with distinction. “Mr Kamath has an amazing ability to pick a leader and identify potential way beyond what the people believed in. Less than 20-25% of us had any clue where we were headed in our careers," says Kalpana Morparia, the bank's joint managing director who worked closely with Kamath for more than two decades.
Another institution would have let this go on as far as possible. But shortly after the long-awaited reverse merger between ICICI and ICICI Bank in 2000, Ms Morparia and group HR head K Ramkumar decided to do some plain-speaking with their boss. The bank should make the transition from depending on Kamath's personal genius to working off a formal system, they argued. Their logic was sound: from a 1,000 member organization, the bank was rapidly moving to a scale—with a 7,000-strong team—where it was well-high impossible for Mr Kamath to personally know every senior leader.
Initially, there was no buy-in. They then appealed to his heart and head. They put forward a list of names for Mr Kamath to evaluate for a particular assignment. “How well do you know them, sir?” they asked him. Mr Kamath knew a few on the list—but drew a blank on the rest. Next came the emotional pitch: “What would happen when you step down as CEO? We aren't suggesting taking away your veto and judgment, but when we are a 50,000 strong organization, you can't do it all yourself? You simply won't know who is where. Besides, wouldn't it make more sense to pass on the secret of what it took to select and nurture talent to other leaders at ICICI, while you were still around?" That last bit seemed to cut ice. Mr Kamath thought hard about his legacy—and finally agreed.
Since then, the shift from a CEO-centric model to an institutionalized process of leadership development has already evolved through six annual cycles. Mr Ramkumar, who modified the model for the bank based on his experience in mature organizations like HLL (now HUL) and ICI, worked hard with the top team—especially Kamath, Morparia and the ICICI Bank board led by chairman N Vaghul—to create a system that has consistently thrown up the 12-odd people that the bank needs to take up critical leadership roles across the ICICI group every year.
But in making the transition, there was one critical thing that Mr. Ramkumar and his team did right: they didn't throw the baby out with the bathwater. So, ICICI continued to visit the best B-schools and hire the best CAs, just as they had done since 1996. They also persisted with the entrepreneurial model that Mr Kamath had consciously adopted. Each of the sub businesses—be it ICICI Ventures, ICICI Home Finance, et al—were handed over to an entrepreneur, who was rated as core talent.
