Skip to main content

ICICI Leadership Academy - Part II

ICICI bank’s leadership in the industry is exemplary. But nothing to compare its ability to spot, groom and deploy leaders in-house.

One-man show

LISTEN to Mr Kamath as he recounts his original formula. “This entrepreneur was told you that have the support system of ICICI. You have a limited amount of capital. We will give you one good person whom you can pick. The rest of the team you will have to build and this is your business case. Detail your business case, build your team, tell me how you will execute, start executing, report to the board on that basis. Thereafter, move it to a management by-objective type of scenario—where objectives are very clearly set, keep meeting those performance targets. Keep ramping up these targets, if necessary, maybe course correcting the strategy as you go on.”
The model was successful. “It allowed the young business heads to evolve into leaders because they took the entire stress of building those businesses and getting them into shape. In that process they evolved into leaders. They had the cloud cover or the organizational support system. But the hard work had to be done by them,” says Mr Kamath.

So what did he look for in a person? “I tried to assess 3 or 4 qualities in a person. First, what is the level of raw intellect? What are the person's strengths and weakness? I never look for a person with no weakness. It is utopian. Thereafter, is the person open to acknowledge that his strengths and weakness must evolve? Plenty of leaders do not acknowledge their weaknesses. That is fine with me as long as they work at a subconscious level on those weaknesses. The next was a step into unknown territory—whether the person would build an entrepreneurial business. That had to do with a person's ability to take challenges and react under pressure. How you approached work and delivered gave an inkling of the person. We did not have anything to go by on pure entrepreneurial yardsticks. I still don't have answers on how to find an entrepreneur.”

Mr Kamath also instituted a star system for the top 5% of the bank's talent. They were treated preferentially while giving away bonuses. This made some strive to be stars and others who believed they can't make the cut simply leave. The pipeline was cleansed of low-rated employees clogging the system.

Dealing With Size

THE new process-driven system displaces none of Mr Kamath's precepts. It is not a computer generated list of leaders. Human judgement prevails. The new leaders are allowed to fail, to an extent. Every leader has two or sometimes three backstops. There is always someone to take the place. Performance targets are still sacrosanct.

But now, the company does the vetting rather than just Mr Kamath. First, among the 15,000-odd managers across the group, about 2,000 are empanelled as leadership talent. To be considered as talent, a manager would have to be a top performer. “The assumption is that unless you are a performer, you won't have credibility as a leader,” said Mr Ramkumar.

A thorough 360-degree appraisal is done for these people, which is then shared with each individual. The HR department then converts it into a data sheet and also writes a one-page profile of the person.

This is where the new talent assessment system takes over. It covers all those empanelled as talent—from joint managing director Chanda Kochar to the lowest rung manager. All of them go through the same rigorous process. Ms Kochar's assessment is done by the board of directors. For the rest, the HR department constitutes seven to nine member skip-level talent panels drawn from across the organization. So in effect, a senior GM can assess a deputy general manager (DGM), but not a general manager. Only people who are assessed as leadership talent can be part of the panel. "Our belief is that it takes a leadership talent to cite a leadership talent," says Mr Ramkumar. Decisions have to be arrived at by consensus. In effect, the panel is a leaderless group. An HR person tables the name of the person, and also presents the data. At least two people in the panel should have known the person, other than his direct boss. “Our belief is that if you are a talent, you can't be somebody who is hidden somewhere.”

These people are then asked to list out their experience of the person. Armed with data, the panel takes the call on the role that a potential leader can play. Is he good enough to be a regional head or head of a national business? If it is the pack of 25 odd people at the top level, the panel has to figure out just how many would make it to the board.

Then the question of time frame. If the panel decides that an assistant general manager is likely to make it to the national head's role in the next one to two years, he is classified as ‘A’ category talent. If he is likely to make the cut in 3 to 4 years, he is classified as a ‘B’ category talent and ‘C’ category, if it is within 5-6 years. This forms the basis for making appointments when national-level roles arise. Last year, about 400 managers in ICICI Bank were empanelled as category A talent—and they enjoyed the first strike at a new role.

The national head for home finance role is expected to come up for grabs soon. The directors will take a call on whom to pick based on a shortlist provided from the A-listers. The directors will use the 360-degree appraisals data which provides data on how the organization perceives the individual combined with the profile and comments from the talent panel on the person's domain knowledge.

So is the system foolproof? “Mistakes do happen. As long as it is 10-15% of cases, it is fine. What we promise is that errors are possible, but biases are not,” said Mr Ramkumar. It is this elaborate process that Chatterjee went through before landing the UK job. Today, at 39 years, after a successful stint in UK, he is managing both the corporate and international business for the bank; Chatterjee is responsible for nearly 90% of the bank's profits. Yet, he didn't need to catch just Mr Kamath's eye to become a leader, because the entire senior management of the bank was tracking him any way.

Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

Mutual Fund Review: L&T MIP

        This fund won't deliver chart-topping returns. However, over the long run it will not disappoint and end up beating the category average The fund has seen numerous changes at the helm. When Katare took over in October 2007, he made dramatic alterations to the portfolio. On the equity side, he increased the number of stocks to 11 (November) from 2 (September). On the debt side, he added Certificates of Deposit (CDs), while earlier Treasury Bills (T-Bills) and cash accounted for 88 per cent (September 2007) of the portfolio. In November 2007 he exited T-Bills for good. The results impressed. In the last quarter of 2007, it delivered 12.83 per cent (category average: 6.12%). In 2008, the first quarter performance was nothing short of impressive, a return of 9.93 per cent (category average: -3.97%). While other players increased their portfolio maturity, Katare maintained a low maturity profile. While the average maturity of the category was 2.81 years that quarter, th...

Mutual Funds: Past Performance is not just everything

Many a times your agent / distributor / relationship manager tries to push you some mutual fund schemes by enticing you with a typical sales pitch…"Sir, this scheme has generated 20% returns in the past one year." And this sales pitch often gets louder when the market conditions have been favourable. Some of the agents / distributors / relationship managers have another unique way of luring you. They say, "Sir / madam this scheme has been awarded the best scheme award in the past by a leading business channel"... And hearing all these sales talks you investors very often get attracted and sign a cheque in favour of the respective scheme.   But please ask yourself do you hear these sales talks when the capital markets turn turbulent? Why is it so that your agent / distributor / relationship manager avoids talking to you during turbulent times of the capital markets and doesn't boast about returns generated by the respective funds or awards being conferred on t...

JP Morgan ASEAN Offshore Fund

  JP Morgan ASEAN Offshore Fund - Invest Online JP Morgan ASEAN Offshore Equity Fund is an international equity mutual fund scheme that invests primarily in companies of countries which are part of the Association of South East Asian Nations (ASEAN). Most international funds , apart from those focused on the US market, have been struggling for sometime. This is because of the uncertainties in the global market. International funds are meant for investors who want to diversify their investments across geographies. If you haven't made your investment for this diversification, you should sell your investments in this scheme.   Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. IDFC Tax Advantage (ELSS) Fund 4. ICICI Prudential Long Term Equity Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. DSP BlackRock Tax Saver Fund 8. Birla Sun Life Tax Relief 96 9. Reliance Tax Saver (ELSS) Fund 10. HDFC TaxSaver...

ICICI Prudential Balanced Fund

 ICICI Prudential Balanced Fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent. An impressive show in the last couple of years has propelled this fund from a three-star to a four-star rating. The fund has traditionally featured a high equity allocation, hovering at well over 70 per cent, which is higher than the allocations of the peers. But in the last one year, the allocation has been moderated from 78-79 per cent levels to 66-67 per cent of the portfolio. ICICI Prudential Balanced Fund appears to practise some degree of tactical allocation based on market valuations. Within equities, well over two-thirds of the allocation is parked i...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now