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K V KAMATH Rigor Rationale
ICICI
Bank Chairman KV Kamath on observations, conversations and ideas that have
shaped his decisions
When I came back from the Far East, there
were two things at the back of my mind. One, something happens to economies
when they go beyond a per capita level of 500 dollars to 1,000 dollars.
People’s aspirations change. Two, after looking at case studies around
Asia, I found that project finance and development banks were in trouble. I
noticed that a lot of our clients were not seeing the change in the country
for what it was. They thought it was temporary. Every year, CK Prahalad,
from 1995 onwards, did a CEO forum in India with 25-30 CEOs. In 1996-97, he
threw numbers at us about India that frightened us. I knew we were at the
cusp of opportunity.
Given the Asian banks experience, I was clear ICICI
would go into other businesses. But people laughed at our ambition of being
a universal bank, as if that was distasteful. One of the first businesses
we got into was corporate finance, where Chanda (Chanda Kochchar, CEO,
ICICI Bank) did a brilliant job. I wouldn’t have taken the call on the
retail side of business if I hadn’t observed that to survive, you need to
grow.
While we were scaling up, I noticed that within six
months of joining ICICI, young B-school graduates just ran out of energy.
It was like their mind atrophied. Nachiket (Nachiket Mor, ex-Chairman,
ICICI Foundation) told me in frustration about how he printed 24 letters
himself and delivered it to a youngster who hadn’t done the job even after
two days of being asked to. And on being asked why, the young man said he
had asked his secretary to do it.
I told Harvard Professor Jaikumar, an operations
research expert, about this. He asked me, “Are you a meritocracy?” I said
we do have people of merit in our office. He subtly explained to me how
meritocracy was different — it was about evaluating people correctly,
getting feedback, compensating well. That’s when set our HR processes
right. Ram Kumar (ICICI’s HR Director) came in and we started putting a
structure.
I have always found it useful to draw ideas from
different places and cross-pollinate it in our business. In the late 1990s,
I went to a McKinsey seminar in New York and learnt about the 90-day rule:
no project was to go beyond 90 days. I called up from a phone booth and
told my team that the platform for our online brokerage that was being
built ground up, must be completed in 90 days. We also saw to it that
project was done not by IT but business people, and everybody on the team
was below 30. When we filed for SEC, again I set a 90 day deadline. For
both projects, experts posited it would take anywhere between
one-one-and-a-half to two years. For SEC filing, we put up beds for people
on our 11th floor conference room and ran a 24-hour canteen. The team
delivered in 72 days.
While we were opening branches, we got ideas from
other industries since at that time we didn’t have benchmarks in India.
Nachiket asked a staff member of Jet Airways where its service starts and
she said, from the time of boarding. She explained how an air hostess
greeted passengers looking them in the face and how it impacted behavior
during the flight. So we launched a campaign called ‘Hello ICICI’ and
introduced lobby managers and ‘May I Help You’ desks. Chanda went to a
branch and noticed that the youngster sitting at the helpdesk didn’t have
90% of the answers and found out that the senior person, who had all the
answers, was busy vouching. We changed things based on observation.
Small ideas can have big impact. CEOs have to be
very careful about technology leaps that could disrupt businesses. Sometime
back, I heard a presentation from a tech analyst of a PE firm which said
the number of people using handheld devices had increased 8x, and the
number was 50 million. Back of the envelope calculations threw up
mindboggling numbers. It is a seminal trend, the customer is taking over.
Mindsets have to change and answers to larger questions like what is the
purpose of the branch in the future, found out.
Often, experiments that challenge your thinking,
teach a lot. I remember a lady officer after studying customer wait-time in
a branch offered a solution of customers handing over money in sealed
envelopes with their account numbers under camera—without bank staff
accepting it, without counting. I rejected the idea, she persisted. I
reluctantly agreed, it turned out to be a success and I received just one
complaint in 5-6 years. I realized I was going by feelings, not data.
I usually have a stack of books on my table and I
just glance through them. I pick up nuggets from books and try to apply
those in our business. These days, Ram Kumar is trying to evangelize
behavioral economics within the group and we find books by Dan Ariely or
Daniel Kahneman of Thinking, Fast & Slow fame, helpful. The trick is to
try and find a connection between what you are doing and what the thinker
is doing.
I am obsolete at the end of every year and I give
myself 10 days to learn. Nobody should have the fear of saying, I don’t
know. At leadership conclaves, like Esha Insights, I listen to
entrepreneurs, leaders, thought leaders. I find listening is an art. When
you listen, you understand nuances, best practices. Then you can test what
makes sense in your case.
As told to Vinod Mahanta
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