CHANGE MANAGEMENT IN ICICI BANK

MAHAVIR SINGH: 173MANDEEP KUMAR: 61

R.ANAND: 155RATIK KHURANA: 161SAGAR SHARMA: 15

VIKRAM PURI: 163

OBJECTIVES OF ICICI BANK

To assist in creation, expansion and modernization of enterprises

To encourage and promote the participation of private capital, both internal and external

Industrial investment and expansion of investment markets

BEGINNING OF THE CHANGE

K.V. Kamath replaced Narayan Vaghul in May 1996 as the CEO of ICICI

Emphasis changed from a development bank mode to that of a market driven financial conglomerate

Creating new divisions to tap new markets

Introduce flexibility to increase the ability to respond to market changes

KEY PROBLEM AREAS

Limited expertise: disbursing 8 year loans to big players

ICICI was neither a low cost player, neither a differentiator in terms of customer service

Ignorance regarding the nuances of lending practices in newly opened sectors like infrastructure.

MAJOR CHANGE CHALLENGES

Division of the organization into groups

Focusing of operations around its customers

Merger with Bank of Madura (BoM)

FIRST MOVE: DIVISION INTO GROUPS

Infrastructure group (IIG)

Oil & gas group (O&G)

Planning and treasury department (PTD)

Structured products group (SPG)

EFFECTS AND RESISTANCE

Shift of major work and talent to corporate center

Employees felt it was difficult to get noticed working in the zonal offices

Employees leaving the organization

FOCUS ON CUSTOMERS

Three new departments set up

1. Major Client Group (MCG) Staff: 30 – 40 Handled top 100 clients

2. Growth Client Group (GCG) Staff: around 60 Handled mid-size companies

3. Personal Finance Group

EFFECTS AND RESISTANCE

GCG employees felt the lack of opportunity

Continuous complaints ICICI blamed for not developing the

right people Feedback process questioned No clear demarcation between internal

skill group and client representative

MEASURES TO CHECK THE UNREST

Imparting new skills to existing employees

Reviewing the compensation structure in place

IMPARTING NEW SKILLS

Training programmes and seminars by external agencies

Overseas and in-house training programmes

Introduced a two-year Graduates' Management Training Programme (GMTP)

COMPENSATION STRUCTURE REVIEW

Rewards related to group performances and not individual ones

Two types of remuneration were considered

1. A contract basis to attract risk-takers. 2. A tenure-based compensation to attract

employees who wanted security. 360-degree appraisal system put in place

RESULTS

Much more relaxed atmosphere within the organization

By 2000, ICICI had emerged as the second largest financial institution in India with assets worth Rs 582 billion.

The company had eight subsidiaries providing various financial services.

MERGER WITH BANK OF MADURA (BOM)

ICICI was almost 3 times the size of BoM

Large differences in staff strength, salaries, designations, profiles, grades and work culture

ICICI was more individual performance oriented while BoM concentrated on overall profitability of the bank

MANAGING THE CHANGE

Technological upgrading of BoM branches

Hewitt Associates was appointed to facilitate smooth cultural integration

Employee behavioral pattern study conducted

KEY FOCUS AREAS DURING THE MERGER

Employee communication Cultural integration Organization structuring Performance management Training Employee relations

RESULTS

By June 2001, the process of integration between ICICI and BoM was started

Promotion schemes for BoM employees were initiated

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