The senior general managers of India's second-largest private sector bank, ICICI Bank, no longer sit in big cabins on a separate floor. They now work from lower floors at the bank's Mumbai headquarters where their teams sit. Similarly, the executive canteen for MD & CEO and executive directors has been thrown open for the 400 business heads. "These were some symbols of hierarchy we have done away with. We are trying to break old mindsets," says T.K. Srirang, Head (Human Resources), ICICI Bank. The bank, under Sandeep Bakhshi, the new MD & CEO, is undergoing a massive transformation. The aim is "One Bank, One Team and One Goal" to ensure speed of delivery. "We have crashed layers so that the speed of response is faster," says Srirang. The results are showing. The bank is among the top five companies in the Business Today's Best Companies to Work For list.
The moves have come in response to challenges the bank faced after the sudden exit of Chanda Kochhar on allegations of wrongdoing. The tough business environment also created pressure on profitability. "The entire organisation is now working towards core operating profits," says Srirang. Brand ICICI has always been associated with latest technology (the bank was the first to scale up the ATM network), popularising retail products from home loan to credit cards and universal banking model (offering insurance, mutual funds, online stock trading, private equity, etc). In fact, the bank's talent has often been picked up by other industry players. Kalpana Morparia (JP Morgan), V. Vaidyanathan (IDFC First Bank), Renuka Ramnath (Multiples), Sonjoy Chatterjee (Goldman Sachs) are some example of ICICI talent going on to lead big organisations.
The HR Question
The 48-year-old Srirang says the challenge is to put all the attributes (brand, product, distribution, people, etc) together to ensure that outcomes at the institution level reflect these attributes and strengths. The focus, as always, is on building a culture which differentiates the institution from others. "Our focus has been disproportionately on the culture of the institution - how to reorganise ourselves and improve some aspects of culture to leverage some of our strengths," says Srirang.
The bank has created a role-based leadership structure (the earlier one was based on grade). The 400 managers in the leadership team - comprising of sgm , gm and dgm - have a goal of "One Bank and One ROE". "Market dynamics are changing. Customers want one-stop solutions," says Srirang. Earlier, the bank used to approach customers, especially corporates, with a single product, say a working capital loan or a term loan. "Now we approach them as a bank and not a retail or corporate department," says Srirang. A manager who has a relationship with a large corporate sells transaction banking, corporate banking, trade opportunities, retail (salaries) and even insurance and home loans to employees. He or she captures all the opportunities and transfers the lead(s) to other businesses. All the leaders have a single objective of improving the bank's operating profit. The bonus of each and every member of the 400 plus leadership team will be equal.
The bank, with Rs 12 lakh crore assets and 5,275 branches, is trying to reduce both vertical and horizontal hierarchies. It has removed the grades (DGM or GM) of the top 400 managers. "We are going by the roles the managers perform," says Srirang, adding: "The corporate office is actually the service centre. The job of the central team is to serve."
The bank is also empowering frontline teams. For example, the zonal head now has the freedom to decide how he wants to place the manpower. He also gets to decide whether to set up a branch in a certain geography or market. "It is a big change," says Srirang. The bank is also trying to clean up the processes. "The decision making has to be quick," adds Srirang.
Culture of Experimentation
There is no "one-size-fits-all' solution in banking. The bank has broken down the market into micromarkets based on PIN codes and is encouraging microexperiments. The idea is to take successful models to larger markets. Take, for example, an experiment in the wealth management business. For years, it was believed that the success of the wealth business was decided by factors such as hiring good talent from B schools, a lucrative incentive structure, stiff targets and guidance from a supervisor. But the bank decided to hire graduates from colleges such as Hindu College in Delhi and Jai Hind College in Mumbai. They were not given targets or incentives. In the past eight months, the new graduates have done far more business than other people of equal vintage. "Human ability can never be measured. The biggest challenge is to assess the market potential of a product or segment," says Srirang. The bank is now scaling up the culture of microexperimentation. "We are looking for people who are culturally fit. Banking is something we can teach," says Srirang.
In the last few years, there has been a big shift in hiring with digitisation and technology playing a larger role in banking. The use of data analytics, artificial intelligence and machine learning is creating new opportunities. "The bank has to prepare for the future," says Srirang. While it continues to go to B schools, it is also hiring more technical graduates and engineers.
In recent years, many banks have had to look outside to fill top vacancies. However, at ICICI Bank, smooth transition of Sandeep Bhakshi into the corner room created stability in terms of culture, ethos and understanding of the group's businesses. To ensure that this is the case in future also, the bank follows a rigorous process of assessing the bench of all leadership positions. "We have been doing it for the last one and a half decade. We do it even for the branch manager level," says Srirang. That is why the 400 leaders are even invited to board meetings. The teams are invited based on their roles (risk, treasury, retail, etc) and not grades (SGM or GM or DGM). Clearly, the "one bank, one team and one goal" agenda is moving apace.