Friday, February 11, 2005

KV Kamath on ICICI

A Smart Manager article on Rediff

Dedicated to my friends Prasannaa and Jeeth !!!

We parked people all over the place. A year-and-a-half later, we offered people a second golden handshake. Many 'parked' people took it and went away. By the time the third one came, the job ended.

He advised me to start reading and do what other companies do, i.e. grade people. So now we grade people, and the bottom 2 per cent to 3 per cent have to go. We have come a long way from those days.

People try to execute in a status quo. You can never execute in a status quo. The organisation is not geared to it. Is the structure right for what you want to do? If I don't think it is right, I won't allow people to do it, because it won't work. I've heard the phrase, 'You cannot have a third generation strategy with a second generation organisation run by first generation workers' and it's totally right.

On the other hand, timing was on our side in 1996. All our technology implementation took place after the mainframe era, and we could take advantage of the huge breakthroughs in computing power at the time when our customer base was exploding from 10,000 customers to 600,000 to 2.5 million to 5 million to 10 million today.

Take ICICI Bank. We may have $30 billion in assets -- but we also have 10 million-plus customers. To put that in context, our customer base is equal to the combined customer base of the three largest banks in Singapore. Yet in terms of assets, we are only one-tenth their size.

Someone described the '90-day rule' or how an entrepreneur starts off in Silicon Valley. He has to design a concept, build a product, test it and take to the market within 90 days otherwise he will be dead because 25 other people are thinking along the same lines.

In several management books, the authors try to make a case that there is something wrong about charismatic leadership. I don't agree fully with this thinking. It may appear to be a single quality but it is not a single quality.

It was the first time we took a stand, and it had a negative impact on the organisation. Lateral recruitment stopped. For the next twenty years ICICI did not recruit laterally! This was too much of a penalty for our organisation, I can say this today.

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