Change Mgmt Icici

CHANGE MANAGEMENT AT ICICI

INTRODUCTION

• ICICI Bank is India’s second largest bank, with over 50 years of financial experience and 14 million customers worldwide.

• Today, ICICI Bank is a global bank, with its presence in 18 countries across the globe.

INTRODUCTION

• ICICI Bank is the first Indian company to be listed on the New York Stock Exchange and is a part of the well-established and hugely successful ICICI Group.

• The ICICI Group has expertise in many financial services from banking to broking, mutual funds to insurance, home loans, venture funds and much more.

• The Group is the largest consumer credit provider and the largest private sector life and general insurer in India, with diverse products and varying expertise.

INTRODUCTION

• ICICI was established by the Government of India in 1955 as a public limited company to promote industrial development in India.

• The major institutional shareholders were the Unit Trust of India (UTI), the Life Insurance Corporation of India (LIC) and the General Insurance Corporation of India (GIC) and its subsidiaries.

ICICI Bank's 'Five S' clean up act

• It's been just 12 or 14 months since the bank began implementing Five S (a management initiative to keep the workplace in order), but compared to other quality control drivers like Six Sigma and ISO, which have been running for more than four years, Five S made a clean sweep almost immediately.


• In certain cases, such as ICICI's back office for integrated operations at Mahalaxmi (central Mumbai), the company claims to have saved Rs 7.5 crore (Rs 75 million) as a result of quality programmes in the current year.

• However, it was Five S that contributed generously, making up 50 per cent of the savings. At another location, employees confide that earlier document retrievals would take up to two or three days.


• Now even the lower rung employees boast of tracing documents in record time -- just 30 seconds (naturally, it takes significantly more time to drum up a hard copy from the store).


• Five S is a workplace transformation exercise. When we implemented it across the organisation, it appeared functional with many tangible benefits.

• But implementation was nowhere as easy. When ICICI Bank announced the initiative in December 2003, nearly 15,000 employees grudgingly gave up their weekends to come in to office -- and clean their workplace!


• They didn't scrub floors or wash used coffee mugs. But they did everything else, like emptying out filing cabinets and drawers and retaining only what was absolutely essential and everybody grumbled in the beginning.


• In the process, the bank freed up huge amounts of shelf space. Consider this: in the HR department alone, throwing out old, unwanted résumés cleared up six cupboards. At the central Mumbai back office, too, employees discarded their pack-rat tendencies, freeing about 10 per cent storage space.

• There was a direct pay-off consequently: ICICI Bank saved more than Rs 600,000 a year on payments to third-party warehousing companies, since records can now be stored in the office.


• The bank set up retail banking operations in 1994; by 2000, it had half a million retail bank account holders. That number skyrocketed in the next few years; at present, it has 10 million retail bank account holders.

• The track record in credit cards has been equally awe-inspiring. ICICI Bank claims to be the number one credit card company in the country with 2.5 million cards issued in less than five years.


• The bank was growing furiously in the period 1997-2001, compromising on quality.

• customer grievances were increasing: from poor service at the branches to interminable waits for reissue of cards, the laundry list of complaints grew. Calls to the customer care helpline were of no use: it was not unusual to be put on hold for up to half an hour at a stretch.


• By end-2003, ICICI Bank officials realised they needed to take action -- fast. A close look at global best practices that could help improve the customer experience turned up Five S, a Japanese concept used mainly on manufacturing shopfloors around the world.


• But they soon realised that the main principles of Five S (sorting out, systematic arrangement, spic-n-span, standardise and self-discipline) could be easily imported into the services sector as well.

• Another advantage is that Five S could be easily followed by everybody -- from the "peon to the president"


• The best thing about Five S is that it is extremely simple and yet powerful. More importantly, the benefits are visible immediately.


• In December 2003, ICICI Bank managers from across the country participated in a one-day leadership programme that included not just Five S but also sessions on workplace improvement and change management. The aim was to help them encourage employees down the line to adapt to Five S.

• It is not enough to just engage zonal heads and branch managers. If Five S has to be successful, it must be owned by the line employees


• The bank followed up the initial sessions with pilot projects across 30 locations, involving 25 people at each location. The 750 employees so covered accounted for just 5 per cent of the total workforce. It took the bank close to six months to implement Five S at all its offices across the country.


• employees navigate their way through the workplace using colours for reference (orange is for cabinets, blue for workstations, mauve for vaults and pink for storage).

• Life at the back office has become simpler after Five S. The biggest change has been in cataloguing. Earlier, records were filed haphazardly, strewn across cupboards and rooms.


• There is more science to file-keeping. Files are now cross-referenced in alphabetic order, by date and by month -- making retrieval far simpler. Some regional offices also offer vernacular explanations for Five S, making it easy for even the housekeeping boys to retrieve documents.

• Finally, 10 minutes at the end of each working day is reserved for a staff meeting, where employees discuss various initiatives and identify problems, and achievers are publicly applauded. Incidentally, for these 10 minutes, lights and computers are switched off to save power.


• Five S is an entirely people-driven initiative and ICICI Bank hasn't been slow in recognising that. In order to sustain employee involvement, the bank is awarding individual and group efforts with certificates signed by the chairman.

• There have been two such ceremonies in the past six months alone. The bank has also tied-up Five S project involvement with the performance management systems, so that no employee is caught napping at the workplace.

Principles of Five S

• The dominating principle of Five S is to create ownership for every object in the organisation, so that nothing is neglected. In the first step (sorting out), individual owners sort their belongings into needs (used regularly, used irregularly) and wants (may be used later or scrap).

• This is followed by making a systematic layout of the workplace, specifying the storage areas and deciding where to put each item, right from files and documents down to the stapler and pins.


• The third phase (spic-n-span) monitors whether the earlier steps (S1 and S 2) are being regularly and effectively carried out and the workspace is kept clean.

• What follows next is to standardise the policies and rules that are to be followed by the entire workplace. These include making timetables and indexes that indicate where you can find what, using charts and visuals. Finally, it is self-discipline that is required to sustain Five S.


• The Five S practice not only helps to impress the customers but also to establish effective quality processes for good services and products.

• Five S is a part of the kaizen family that talks about continuous innovation.

• In India companies like Hindustan Lever, Bhel (Bharat Heavy Electricals Limited) and the Aditya Birla group practice the principles of Five S.

Engineering a change, the ICICI Bank way

• The bank is planning to recruit over a batch of 500 engineers the next couple of months. There will roughly be one engineer for each branch.


• ICICI Bank is taking in a combination of fresh engineers from the campus as well as those with a few years experience in different industries. These engineers are being recruited to "transform the workplace" and introduce process efficiencies in branches.

• Whether it is redesigning the branch layout, or the height of the counter, or cutting down the customer interaction time, or reducing the steps involved in counting of cash, or cutting down on the forms that collect the same detail, engineers will apply their skills to the problem.


• The decision to recruit engineers came after there was an internal brainstorming about the kind of talent that the bank needed to recruit in planning for the future.

• If these engineers could come up with 10 to 20 great innovations in processes, it would have more than repaid the investment and the effort in recruiting them.

Top management change at ICICI

• V. Vaidyanathan, executive director, ICICI Bank, was appointed as MD & CEO of ICICI Prudential Life Insurance Company (ICICI Life). He took over from Shikha Sharma last year.

Top management change at ICICI

• Sandeep Bakhshi, MD & CEO, ICICI Lombard General Insurance Company (ICICI General), was appointed as ED of ICICI Bank and is responsible for retail and rural banking. Mr Bakshi's post was filled by Bhargav Dasgupta, ED, ICICI Life.

• Chanda Kochhar, who took over as MD & CEO, ICICI Bank, from May 1 was also appointed as non-executive chairperson of ICICI Life, ICICI General, ICICI Prudential Asset Management Company (ICICI AMC), ICICI Securities, ICICI Bank UK PLC and ICICI Bank Canada.

• She assumed charge after the bank's MD & CEO KV Kamath stepped down on April 30 2009, and assumed office as non-executive chairman of the Board effective May 1, 2009.

• N Vaghul retired as non-executive chairman of the bank on April 30, 2009.

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Change Mgmt Icici

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