Page 1
Chapter 1
INTRODUCTION
11 Concept of Change
Changing is the regulation of nature Any business organization undergoes change on
a continuous basis technically termed as Corporate Restructuring It can be defined as
a strategy to achieve faster growth desired capital structure and change in the
ownership and control of company The reasons behind change may be external or
internal factors In the present scenario business organization undertakes changes to
increase their cutting edge over the competition and enhance their leadership
positions It is a fundamental fact of finance that growth and capital employed are two
basic drivers of the value of an organization On the other hand neither growth nor
improvement in ROCE is possible unless the company is under the control of
competent progressive and visionary management The present paper is an attempt to
understand the strategic move of ICICI bank The case study will reveal the motives
behind and synergies from such MampA activities An attempt has been made to
analyze ldquoIs corporate restructuring a tool to enhance the shareholders valuerdquo This
entire case study is about the implementation of change in ICICI Bank Kundapur
Vaman Kamath is the man most credited with building the Industrial Credit and
Investment Corporation of India Ltd (ICICI) Mumbai into Indias largest private
sector bank When he took over as CEO and managing director in 1996 ICICI had
total assets of Rs 21000 crores
In April 2009 when Kamath 61 handed over the reins to Chanda Kochhar and took
over as its non executive chairman ICICIs total assets had grown to a whopping Rs
380000 crores with an annual profit of Rs 3750 crores The visionary banker saw
opportunities in both retail and corporate lending that few of his contemporaries
thought existed and in doing so changed the face of banking in India Kamath
introduced massive changes (Planned change) in the organizational structure
stimulate innovation empowered employees and introduce work teams and the
emphasis of the organization changed from a development bank mode to that of a
market-driven financial conglomerate
Change Management Page 1
12 Principles of Change
a) Challenging emotions should be greater than positive emotions
b) Change only happens when each person makes a decision to implement the
change
c) Confidence of getting tough anywhere
d) Truth is more important during periods of change and uncertainty than arsquo good
news
e) People who work are capable of doing much more than they are doing
f) The intrinsic rewards of a project are often more important than the material
rewards and recognition
g) Donrsquot force change on anyone
h) The change process must be linked to business and performance goals
i) The change process involves both organizational and personal participation
13 Challenges of Changes
a) Involves new procedures
b) Leadership - changing the running of an organization from a command and
control nature of management to the nurturing and motivational nature of
leadership
c) Focus - making business choices to bring alignment and focus to the
organization
d) Commitment - creating commitment to the future of the enterprise throughout
the organization
e) Resistance- Resistance is a complex entity that directly affects the outcomes of
change both positively and negatively
Change Management Page 2
14 Eight Steps to Successful Change- John P Kotter
a) Increase urgency - Inspire people to move make objectives real and relevant
b) Build the guiding team - Get the right people in place with the right
emotional commitment and the right mix of skills and levels
c) Get the vision right - Get the team to establish a simple vision and strategy
focus on emotional and creative aspects necessary to drive service and
efficiency
d) Communicate for buy-in - Involve as many people as possible communicate
the essentials simply and to appeal and respond to peoples needs De-clutter
communications - make technology work for you rather than against
e) Empower actions - Remove obstacles enable constructive feedback and lots
of support from leaders - reward and recognise progress and achievements
f) Create short-term wins - Set aims that are easy to achieve - in bite-size
chunks Manageable numbers of initiatives Finish current stages before
starting new ones
g) Dont let up - Foster and encourage determination and persistence - ongoing
change - encourage ongoing progress reporting - highlight achieved and future
milestones
h) Make change stick - Reinforce the value of successful change via
recruitment promotion and new change leaders Weave change into culture
Change Management Page 3
15 Kurt-Lewinrsquos Change Model
ICICI has followed some of the scheme and models for managing change in the
organization One models followed by the organization as well as lines of Kurt
Lewins three phases has this model has three stages in the managing process when
the changes in the organization
Unlock This is the largest three phases of the model This step gives the details of the
preparatory steps to the changes taking place in the organization It also explains how
to prepare for change decision to stay in the situation or to make changes and leave
the comfort zone Melt occur and contribute to changes in the organization not only
do not want all the possible consequences that a change has occurred in front of them
Simply put it is defined by the organization to ensure the motivation of employees
business processes and strategies to ensure the full output of the entire fruit
Motion If the organization ready to move for change and are willing to explore new
opportunities for others and the direction they need to be forward This phase includes
the creation of third time to new values principles develop the changes defined in the
organization Sometimes this may mean changes in the structural forms and processes
to support the proposal that the organization change
Re-freeze If you have recently strategies to the core processes of organizational
changes adopted amendment shall be frozen Some system supports such as the
evaluation system to reward other cultures and sub-systems within the company are
being considered to support the acquisition of new functions and actions The process
of re-freezing allows the organization to achieve higher levels of symmetry through
the institutionalization of organizational change (D B K Srivastava 2007)
Change Management Page 4
Kurt Lewinrsquos model of change
Stage Characteristics Organizational impact
UnfreezingPeople in the organization made aware of problemsperformance gap and need for change
This diagnosis stage is often driven by a change agent
ChangingPeople experiment with new workplace behavior to deal with needed change
This intervention stage features specific training plans for managers and employees
RefreezingPeople employ new skills and attitudes and are rewarded by organization
Changes are institutionalized in the corporate culture
Change Management Page 5
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 2
12 Principles of Change
a) Challenging emotions should be greater than positive emotions
b) Change only happens when each person makes a decision to implement the
change
c) Confidence of getting tough anywhere
d) Truth is more important during periods of change and uncertainty than arsquo good
news
e) People who work are capable of doing much more than they are doing
f) The intrinsic rewards of a project are often more important than the material
rewards and recognition
g) Donrsquot force change on anyone
h) The change process must be linked to business and performance goals
i) The change process involves both organizational and personal participation
13 Challenges of Changes
a) Involves new procedures
b) Leadership - changing the running of an organization from a command and
control nature of management to the nurturing and motivational nature of
leadership
c) Focus - making business choices to bring alignment and focus to the
organization
d) Commitment - creating commitment to the future of the enterprise throughout
the organization
e) Resistance- Resistance is a complex entity that directly affects the outcomes of
change both positively and negatively
Change Management Page 2
14 Eight Steps to Successful Change- John P Kotter
a) Increase urgency - Inspire people to move make objectives real and relevant
b) Build the guiding team - Get the right people in place with the right
emotional commitment and the right mix of skills and levels
c) Get the vision right - Get the team to establish a simple vision and strategy
focus on emotional and creative aspects necessary to drive service and
efficiency
d) Communicate for buy-in - Involve as many people as possible communicate
the essentials simply and to appeal and respond to peoples needs De-clutter
communications - make technology work for you rather than against
e) Empower actions - Remove obstacles enable constructive feedback and lots
of support from leaders - reward and recognise progress and achievements
f) Create short-term wins - Set aims that are easy to achieve - in bite-size
chunks Manageable numbers of initiatives Finish current stages before
starting new ones
g) Dont let up - Foster and encourage determination and persistence - ongoing
change - encourage ongoing progress reporting - highlight achieved and future
milestones
h) Make change stick - Reinforce the value of successful change via
recruitment promotion and new change leaders Weave change into culture
Change Management Page 3
15 Kurt-Lewinrsquos Change Model
ICICI has followed some of the scheme and models for managing change in the
organization One models followed by the organization as well as lines of Kurt
Lewins three phases has this model has three stages in the managing process when
the changes in the organization
Unlock This is the largest three phases of the model This step gives the details of the
preparatory steps to the changes taking place in the organization It also explains how
to prepare for change decision to stay in the situation or to make changes and leave
the comfort zone Melt occur and contribute to changes in the organization not only
do not want all the possible consequences that a change has occurred in front of them
Simply put it is defined by the organization to ensure the motivation of employees
business processes and strategies to ensure the full output of the entire fruit
Motion If the organization ready to move for change and are willing to explore new
opportunities for others and the direction they need to be forward This phase includes
the creation of third time to new values principles develop the changes defined in the
organization Sometimes this may mean changes in the structural forms and processes
to support the proposal that the organization change
Re-freeze If you have recently strategies to the core processes of organizational
changes adopted amendment shall be frozen Some system supports such as the
evaluation system to reward other cultures and sub-systems within the company are
being considered to support the acquisition of new functions and actions The process
of re-freezing allows the organization to achieve higher levels of symmetry through
the institutionalization of organizational change (D B K Srivastava 2007)
Change Management Page 4
Kurt Lewinrsquos model of change
Stage Characteristics Organizational impact
UnfreezingPeople in the organization made aware of problemsperformance gap and need for change
This diagnosis stage is often driven by a change agent
ChangingPeople experiment with new workplace behavior to deal with needed change
This intervention stage features specific training plans for managers and employees
RefreezingPeople employ new skills and attitudes and are rewarded by organization
Changes are institutionalized in the corporate culture
Change Management Page 5
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 3
14 Eight Steps to Successful Change- John P Kotter
a) Increase urgency - Inspire people to move make objectives real and relevant
b) Build the guiding team - Get the right people in place with the right
emotional commitment and the right mix of skills and levels
c) Get the vision right - Get the team to establish a simple vision and strategy
focus on emotional and creative aspects necessary to drive service and
efficiency
d) Communicate for buy-in - Involve as many people as possible communicate
the essentials simply and to appeal and respond to peoples needs De-clutter
communications - make technology work for you rather than against
e) Empower actions - Remove obstacles enable constructive feedback and lots
of support from leaders - reward and recognise progress and achievements
f) Create short-term wins - Set aims that are easy to achieve - in bite-size
chunks Manageable numbers of initiatives Finish current stages before
starting new ones
g) Dont let up - Foster and encourage determination and persistence - ongoing
change - encourage ongoing progress reporting - highlight achieved and future
milestones
h) Make change stick - Reinforce the value of successful change via
recruitment promotion and new change leaders Weave change into culture
Change Management Page 3
15 Kurt-Lewinrsquos Change Model
ICICI has followed some of the scheme and models for managing change in the
organization One models followed by the organization as well as lines of Kurt
Lewins three phases has this model has three stages in the managing process when
the changes in the organization
Unlock This is the largest three phases of the model This step gives the details of the
preparatory steps to the changes taking place in the organization It also explains how
to prepare for change decision to stay in the situation or to make changes and leave
the comfort zone Melt occur and contribute to changes in the organization not only
do not want all the possible consequences that a change has occurred in front of them
Simply put it is defined by the organization to ensure the motivation of employees
business processes and strategies to ensure the full output of the entire fruit
Motion If the organization ready to move for change and are willing to explore new
opportunities for others and the direction they need to be forward This phase includes
the creation of third time to new values principles develop the changes defined in the
organization Sometimes this may mean changes in the structural forms and processes
to support the proposal that the organization change
Re-freeze If you have recently strategies to the core processes of organizational
changes adopted amendment shall be frozen Some system supports such as the
evaluation system to reward other cultures and sub-systems within the company are
being considered to support the acquisition of new functions and actions The process
of re-freezing allows the organization to achieve higher levels of symmetry through
the institutionalization of organizational change (D B K Srivastava 2007)
Change Management Page 4
Kurt Lewinrsquos model of change
Stage Characteristics Organizational impact
UnfreezingPeople in the organization made aware of problemsperformance gap and need for change
This diagnosis stage is often driven by a change agent
ChangingPeople experiment with new workplace behavior to deal with needed change
This intervention stage features specific training plans for managers and employees
RefreezingPeople employ new skills and attitudes and are rewarded by organization
Changes are institutionalized in the corporate culture
Change Management Page 5
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 4
15 Kurt-Lewinrsquos Change Model
ICICI has followed some of the scheme and models for managing change in the
organization One models followed by the organization as well as lines of Kurt
Lewins three phases has this model has three stages in the managing process when
the changes in the organization
Unlock This is the largest three phases of the model This step gives the details of the
preparatory steps to the changes taking place in the organization It also explains how
to prepare for change decision to stay in the situation or to make changes and leave
the comfort zone Melt occur and contribute to changes in the organization not only
do not want all the possible consequences that a change has occurred in front of them
Simply put it is defined by the organization to ensure the motivation of employees
business processes and strategies to ensure the full output of the entire fruit
Motion If the organization ready to move for change and are willing to explore new
opportunities for others and the direction they need to be forward This phase includes
the creation of third time to new values principles develop the changes defined in the
organization Sometimes this may mean changes in the structural forms and processes
to support the proposal that the organization change
Re-freeze If you have recently strategies to the core processes of organizational
changes adopted amendment shall be frozen Some system supports such as the
evaluation system to reward other cultures and sub-systems within the company are
being considered to support the acquisition of new functions and actions The process
of re-freezing allows the organization to achieve higher levels of symmetry through
the institutionalization of organizational change (D B K Srivastava 2007)
Change Management Page 4
Kurt Lewinrsquos model of change
Stage Characteristics Organizational impact
UnfreezingPeople in the organization made aware of problemsperformance gap and need for change
This diagnosis stage is often driven by a change agent
ChangingPeople experiment with new workplace behavior to deal with needed change
This intervention stage features specific training plans for managers and employees
RefreezingPeople employ new skills and attitudes and are rewarded by organization
Changes are institutionalized in the corporate culture
Change Management Page 5
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 5
Kurt Lewinrsquos model of change
Stage Characteristics Organizational impact
UnfreezingPeople in the organization made aware of problemsperformance gap and need for change
This diagnosis stage is often driven by a change agent
ChangingPeople experiment with new workplace behavior to deal with needed change
This intervention stage features specific training plans for managers and employees
RefreezingPeople employ new skills and attitudes and are rewarded by organization
Changes are institutionalized in the corporate culture
Change Management Page 5
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 6
Chapter 2
COMPANY PROFILE
21 Background
ICICI Bank is Indiarsquosrsquo 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 ICICI Bank is the most valuable bank in
India in terms of market capitalization and is also ranked second amongst all the
companies listed on the Indian stock exchanges
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
ICICI was established by the Government of India in 1955 as a public limited
company to promote industrial development in India ICICI Bank was originally
promoted in1994 by ICICI Limited an Indian financial institution and was its wholly
owned subsidiary 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 The equity of the corporation was
supplemented by borrowings from the Government of India the World Bank the
Development Loan Fund (now merged with the Agency for International
Development) Kreditanstalt fur Wiederaufbau (an agency of the Government of
Germany) the UK government and the Industrial Development Bank of India (IDBI)
22 Objectives
bull assist in creation expansion and modernization of enterpriseshttpskillmattersin
bull encourage and promote the participation of private capital both internal and external
bull take up the ownership of industrial investment and
bull expand the investment markets
Change Management Page 6
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 7
23 History of ICICI
1 In 1955- ICICI was established as a public limited company by the Government of
India to promote industrial development in India
2 In mid 1980s ICICI diversified rapidly into areas like merchant banking and
retailing
3 In 1987 ICICI co-promoted Indias first credit rating agency Credit Rating and
Information Services of India Limited (CRISIL) to rate debt obligations of Indian
companies
4 In 1988 ICICI promoted Indias first venture capital company ndash Technology
Development and Information Company of India Limited (TDICI)
5 In 1992 ICICI tied up with J P Morgan of the US to form an investment banking
company ICICI Securities Limited In line with its vision of becoming a universal
bank
6 In 1998 ICICI restructured its business based on the recommendations of
consultants McKinsey amp Co
7 2001 ICICI acquired Bank of Madura (est 1943) Bank of Madura was a Chettiar
bank and had acquired Chettinad Mercantile Bank (est 1933) and Illanji Bank
(established 1904) in the 1960s
8 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI ICICI PeIn May 1996 Kamath returned to ICICI as its Managing
Director and Chief Executive Officer Kamath was instrumental in expanding the
Groups services to the retail customers He initiated a process of a series of
acquisitions of non-banking finance companies in 1996-98 and led the way to the
formation of ICICI Bankrsonal Financial Services Limited and ICICI Capital Services
Limited into ICICI Bank After receiving all necessary regulatory approvals ICICI
integrated the groups financing and banking operations both wholesale and retail
into a single entity
9 Also in 2002 ICICI Bank bought the Shimla and Darjeeling branches that Standard
Chartered Bank had inherited when it acquired Grindlays Bank
10 ICICI started its international expansion by opening representative offices in New
York and London
Change Management Page 7
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 8
11 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK) and in
the UK it established an alliance with Lloyds TSB
12 It also opened an Offshore Banking Unit (OBU) in Singapore and representative
offices in Dubai and Shanghai
13 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country India and South Africa
ICICI is the one which has fast change in the Indian organization It is above
all the plans for development on the grounds that as already predicted to convey the
challenges in the coming future and the issues potential that were faced by the
changes management Is not with the results of this organization is known that the
success of managing and controlling the problem by appointing staff Kamath actions
ICICI has been suffering issues internally to organizational change Internal problems
must be the main driver of organization changes There are many problems which
have to be determined by the organization changes as well the obstacles that the
organization has to go through its journey The ICICI has undergone many changes
from its date of establishment the changes were regarding the economic and other
which are occurring in the market few analysis of ICICI for the determination of
change in the drivers of organization The organization has been in-sell and cross-sell
products and services aggressively going to the second largest bank and the
institution In its 90-in Safety and finance joint venture is one of the organizations
such as JP Morgan the company is known for the same configuration Asset
Management These are all previous phases of development now occur in the further
years various union trades and the organization joint force ICICI is a one of the
leading provider of private organizations products and services to customers in
various fields the innovative reputation strength of finance and culture along a
general All these features changes in the organization of organizations to embrace
Change Management Page 8
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 9
Chapter 3
SWOT ANALYSIS OF ICICI
SWOT analysis is conducted organizational strengths and weaknesses opportunities
and risks that development organization that is used to estimate the potential impact
of aggressive companies are analyzed This process allows the organization to the
strategy is accepted and recognized standards in their markets which assist the
organization to construct their schemes for overcoming some mistakes in the
government The following are the strengths and weakness analysis of ICICI bank to
understand better the positioning of the bank
31 STRENGHTS
1 Brand Name
ICICI Bank has earned a reputation in the market for extending quality services to the
market vis-agrave-vis its competitors It has earned a strong Brand name in banking in a
very short span of time
2 Market Share
ICICI Bank has the largest market share of 34 in the IT amp ITES industry in
Hyderabad according to our survey (within the limitation of the sample size)
3 Huge Network
There many branches of ICICI in India ICICI stores are about 500 and its ATMs are
1800 in India therefore the service quality to the customers around the stateICICI
Bank has the highest number of linked branches in the country The bank operates
through a network of 450 branches and over 1800ATMs across India thus enabling
them to serve customer in better way
4 Diversified Portfolio
ICICI Bank has all the products under its belt which help it to extend the relationship
with existing customer ICICI Bank has umbrella of products to offer their customers
if once customer has relationship with the bank Some Products which ICICI Bank is
offering arebull Retail Bankingbull Business Bankingbull Merchant Establishment Services
(EDC Machine)bull Personal loans amp Car loansbull Demat Services with E-Brokingbull
Mutual Fund (ICICI Bank is the Distributor of all Mutual Fund)bull Insurancebull Housing
Loans
Change Management Page 9
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 10
5 Salary Account
One very interesting thing that we have observed in our survey is that ICICI is having an edge
over other banks in case of Salary Account Most of the companies are having their
Salary Account with ICICI even if their Current Account is with any other Bank This
is mainly because of the huge network of ATMs and branches of ICICI
6 Working Hours
ICICI is the only bank which is having its working hours from 8to 8 which is one of
the major strength of ICICI Bank with respect to IT amp ITES Industry
As most of the IT amp ITES companies are global players and their Parent company is
in US so they have to work according to their office time Thus some have their
Office time in the morning and some have it in the evening so if the working hour of
the bank is 8 to 8 it is very convenient for them
7 Treasury Department
ICICI is the only bank which is having its treasury department especially for
Hyderabad Customers So customers can get the best rates for foreign exchange
8 Aggressive Marketing
ICICI Bank is known for its aggressive marketing of its products Recent
Endorsement of its product by AMITABH BAHCHAN proves the same This gives
ICICI an edge over other banks
9 Technology
From its inception ICICI Bank has adopted a policy of selecting internationally
proven and specialized Packaged Systems for its technology ICICI bankrsquos technology
platform has been acknowledged globally as one of the best in terms of robustness
flexibility and cost efficiency ICICI Bank is in a position to leverage this platform to
further build cost and service advantage
Change Management Page 10
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 11
32 WEAKNESS
1 Transaction Cost
ICICI Bank charges high cost for its transactions Throughout data analysis we have
find out that most of the small companies prefer nationalized banks only because of
this cost factor Also the group has found out that there are companies which are
going for multi bank system ie they are using only those facilities of ICICI Bank
which are provided at cheaper rates and for other services they are going to
nationalize banks and MNCs So there exists a huge potential for ICICI Bank if they
are ready to make their transaction cost flexible
2 Focus Only On High End Customers
The bank targets only the top bracket of clients and does not cater to the needs of
small customers Due to this reason the bank may sometimes loose good clients
3 Defensive Approach in Lending
ICICI Bank has a defensive approach in lending Mainly to IT amp ITES companies
Bank do not provide loan as these companies are not having collaterals so bank
hesitate in giving loans to them Because of this policy companies prefer nationalized
banks and ICICI Bank in turn sometimes loose potential customers
4 Little Presence Outside India
ICICI Bank is having little presence outside India because of which companies prefer
MNC Bank mainly Citibank So if ICICI Bank tries to emerge outside India then it
has a huge potential of customers
5 Poor Customer CareService
With its aggressive marketing ICICI Bank is rapidly increasing its customer base
They are not however increasing the number of employees accordingly This is
leading to deterioration of the standard of customer service
Change Management Page 11
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 12
33 OPPORTUNITIES
1 IT and ITES
ICICI is the future of the market and the large untapped in India in sectors of IT and
ITES The current bank dissatisfaction that many Indian institutions in India are not
very much satisfied at this time it can convert their opportunities in ICICI
2 Consultation with Small Businesses
Business advising for smaller Players The analysis has also indicated that the concept
of business advising though very popular with the higher end players is virtually
nonexistent in the lower end of the market ICICI should take this opportunity to
provide business advising to the smaller companies at competitive rates and try to
take the first mover advantage How much of the banks to focus on business
consulting for small businesses that ICICI to obtain is the opportunity for all business
categories
3 Remittances
From the analysis group has also found out that ICICI bank has very little presence as
far as the EEFC account is concerned Companies prefer to bank with MNCs (which
have greater presence in the foreign countries) and nationalized banks (which
according to the companies provide lower transaction rates) to get their inward
remittances in spite of ICICI being providing one of the most competitive rates So
the bank can promote its EEFC account better and get the key to the door of huge
potential market
Change Management Page 12
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 13
34 THREAT
1 Company bank increased MNC
The Indian government friendly lot of MNC banks are now increasing threat to banks
such as ICICI in India This will certainly increase competition which in turn leads to
potential threats in ICICI in the market place
2 Nationalization in bank development
With PSU banks like SBI going all out to compete with the private banks and
government giving them a free hand to do so it can prove to be serious threat for
banks like ICICI The fee has been granted by the bank practical significance for a
number of nationalized banks in India like SBI which is considered a serious threat to
ICICI as they compete with them
3 Customer dissatisfaction
This is the biggest threat and vulnerability ICICI It was observed that many of the
organizations and customers who use the services of ICICI satisfied with the services
of ICICI This should be regarded as a serious problem and customers are not
satisfied by other banks that offer better products and services to their customers
Change Management Page 13
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 14
Chapter 4CHANGE MANAGEMENT AT ICICI
41 OverviewThe story of ICICI Bank indeed is quite exciting as we look into how the
company has internationalized its business vis-a-vis the other banks from India With
the least number of international bank branches as compared to many of the other
Indian banks it stands tall in terms of its share of international business especially in
the foreign remittance business In a short period of time it has grown to be the
largest bank in the private sector with a global foot print Its share of international
remittance business among the banks in India has risen from 4 in 2003-04 to about
30 today while retaining over 75 of the total online international remittance
business in India
ICICI has not changed much over the past five years It was a great success in
managing change within an organization Begin to compete with banks in India to
meet their market position The use of the agency has become an important union
with the server and that the policies implemented by management ICICI has
improved its market position and offers a variety of products and services to
customers In recent years trust and customer satisfaction after purchase missing
Since technology is the application of certain services by sharing new technologies
has changed as a result of their service is quick and easy Because of these changes
can not invest in ICICI in the past five years and confidence in the market in the same
situation over the next five years to do it again Changed their business processes
strengthening of some units and some of its services powerful body for all categories
of its customers
Another of the challenges of change management that the organization has suffered as
their client is more pronounced than before the service provision of various services
because this method if the needs of any customer service three sections which are
separated and fresh This process can lead to times where there is the possibility that
customer off to another service provider of company This will ultimately lead to
customers losing organization All of these challenges and ICICI conducted during the
last five years and has one of the largest banks in India
Not only was the company faced with the challenge of competition from other
established players in the industry but also from potential customers for international
banking and remittance business In fact when KV Kamath took over as the CEO of
Change Management Page 14
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 15
ICICI Bank in 1996 the banking industry in India was fast changing with several
banking deregulations underway and increasing competition in the market Around
this time the bank had a high employee turnover to the extent that it could destabilize
the operations of the bank Kamath wondered how to manage the manpower He also
wondered if technology was a solution to handle some of these problems and would it
also help in the companyrsquos growth plans ICICI as an organization is divided into six
major product divisions like Retail Banking International Banking Rural Micro-
Banking and Agri-Business Government Banking and Corporate Centre Kamath
identified the main problem as the companys ignorance regarding the nuances of
lending practices in newly opened sectors like infrastructure The change program
was initiated within the organization Organization changed from a development
bank1 mode to that of a market-driven financial conglomerate
The Key Objectives of the Change In ICICI
A number of objectives and problems in the organization who are agreeable to pay
ICICI were ready to change The mainly three issues that have caused five years in the
change of atrophy were ICICI relatives and lateral adjustment With the Kamath
ICICI has seen various organization changes Kamath said that workers will lose
effect on the world of work They follow some of the strategies to overcome this
problem by the scoring system in the organization He started the distribution of their
benefits to workers who stop too lazy and committed to their work Prior to ICICI
employees is not a five-point scale effectively They change the process of concluding
a five-point scale and graded according to the performance
This is degree two percent and three percent of workers increased from creation Is
observed even in the organization uses a DOS-based technology as it becomes
available from new technologies (KV Kamath 2005)
Kamath and the process have changed the basis of Oracle to improve business
processes in improving the interface of user
Other change drivers in 90 days of a public company ICICI process with INT
Kamath This states the rule that all start to implement a project or task within 90 days
of start date 90-day rule developed by businessmen who have started their business in
Silicon Valley do The employer must be designed constructed and to use the
product on the market and have lost 90 days of competition This is a strategy ICICI
Change Management Page 15
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 16
will take to complete the projects at hand to win the race competitive in this world In
the Kamath seminar visit to New York this strategy has attracted decided to take the
organization As this rule is three years six months able to complete 12 of almost all
projects are following the strategy ICICI rule of 90 days However this strategy has
found a good knowledge of the organization to finish the projects in time with the
output product perfectly
There are some factors of internal that have covered the way for changes in the
organization over the past 5 years All these changes are to win the competition in the
market of Indian and the size of the wholesale and retail market These changes have
led to the source s part of the business challenges of process management Above all
ICICI these changes have made some changes to business processes the customers
needs ICICI creation of development fund the club IFCI IDBI and ICICI to
participate because of the changes in the sector of finance has decided to do a service
to stop ICICI as its customers The Ministry has decided to make these measures
should apply to all financial institutions to provide services to clients was not a low-
budget scenario or discriminatory In this situation at the beginning of a change in the
organization in the preparation of O amp G (oil and gas) IIG (Group Infrastructure)
DES (Structured Products Group) and DTP (Planning and Finance) held for the
provision of loans to customers For food processing to control sections have heard
some of these experts for their current employees Following this process the most
talented group offers business centers and the attention given to them over the
branches Because many of these workers have a complaint after being informed by
the managers must have to be in the group of business or otherwise go out of the
organization
42 Organization Divided In Groups
Infrastructure group (IIG)
Oil amp gas group (OampG)
Planning and treasury department (PTD)
Structured products group (SPG)
Change Management Page 16
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 17
43 Top Management Change at ICICI
V Vaidyana executive director ICICI Bank was appointed as MD amp CEO of ICICI
Prudential Life Insurance Company (ICICI Life) He took over from Shikha Sharma
last year
Sandeep Bakhshi MD amp CEO ICICI Lombard General Insurance Company (ICICI
General) was appointed as ED of ICICI Bank and is responsible for retail and rural
banking Mr Bakshis post was filled by Bhargav Dasgupta ED ICICI Life
Chanda Kochhar who took over as MD amp 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 banks MD amp 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
44 Operations Focus on Customers
ICICI set up three new departments
1) Major client group (MCG)
bull A staff of about 30-40 people
bull Handled top 100 customers of ICICI
2) Growth client group (GCG)
bull A staff of about 60 people
bull Looked after the needs of mid-size companies
3) Personal finance group
Change Management Page 17
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 18
Chapter 5
THE CHANGE LEADER
In May 1996 KV Kamath (Kamath) replaced Narayan Vaghul (Vaghul) CEO of
Indias leading financial services company Industrial Credit and Investment
Corporation of India (ICICI) Immediately after taking charge Kamath introduced
massive changes in the organizational structure and the emphasis of the organization
changed from a development bank1 mode to that of a market-driven financial
conglomerate
Kamaths moves were prompted by his decision to create new divisions to tap new
markets and to introduce flexibility in the organization to increase its ability to
respond to market changes Necessitated because of the organizations new-found aim
of becoming a financial powerhouse the large-scale changes caused enormous
tension within the organization The systems within the company soon were in a state
of stress Employees were finding the changes unacceptable as learning new skills and
adapting to the process orientation was proving difficult But the top management of
ICICI Bank seems to have had a clear reason for the expansion of its business world-
wide as can be seen from the statement below
What role am I supposed to play in this ever-changing entity Has anyone worked
out the basis on which roles are being allocated today
- A middle level ICICI manager in 1998
We do put people under stress by raising the bar constantly That is the only way to
ensure that performers lead the change process
- K V Kamath MD amp CEO ICICI in 1998
When K V Kamath came back from ADB (Asian Development Bank)in
1996working there for 8 enriching years Kamath have seen the changes occurring in
the financial sector abroad wanted ICICI to become a one-stop shop for financial
services But there were basic problems in the organization like- ignorance in the
organization about the lending practices in the new sectors like infrastructure
problem of atrophy ( which was deep rooted in the organization) lack of motivation
Change Management Page 18
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 19
to grow and improve customer services and adapt to new technology( use of internet
ATM for fast services)
So he initiated the change within the organization The first move being the creation
of the infrastructure group (IIG) oil amp gas group (OampG) planning and treasury
department (PTD) and the structured products group (SPG) as the lending practices
were quite different for all of these As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate center
While the zonal offices continued to do the same work - disbursing loans to
corporates in the same region - their importance within the organization seemed to
have diminished
Another change management problem surfaced as a result of ICICIs decision to focus
its operations much more sharply around its customers To tackle this problem ICICI
set up three new departments major client group (MCG) growth client group (GCG)
and personal finance group In the major client group a staff of about 30-40 people
handled the needs of the top 100 customers of ICICI On the other hand about 60
people manned the growth client group which looked after the needs of mid-size
companies Obviously the bigger clients required more diverse kinds of services So
working in MCG offered better exposure and bigger orders
This movement has challenged the status quo of the organization And act as a
catalyst to resistance toward the change as it is threat to established power
relationships threat to expertise The management had tremendous resistance in the
first year People were willing to come to blows and there were emotional
breakdowns also Change Challenges
The changes also brought in a lot of confusion among the employees with media
reports frequently carrying quotes from disgruntled ICICI employees According to
analysts a large section of employees began feeling alienated The discontentment
among employees further increased when Kamath formed specialist groups within
ICICI like the structured projects and infrastructure group
Doubts were soon raised regarding whether Kamath had gone too fast too soon and
more importantly whether he would be able to steer the employees and the
organization through the changes he had initiated
Change Management Page 19
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 20
Chapter 6
DEREGULATION CHALLENGES
ICICI was a part of the club of developmental finance institutions (DFIs -
ICICI IDBI and IFCI) who were the sole providers of long-term funds to the Indian
industry If the requirement was large all three pooled in the money However the
deregulation beginning in the early 1990s allowed Indian corporates to raise long-
term funds abroad putting an end to the DFI monopoly The government also stopped
giving DFIs subsidized funds Eventually in 1997 the practice of consortium lending
by DFIs was phased out
It was amidst this new found independent status that Kamath who had been
away from ICICI for eight years working abroad returned to the helm At this point
of time ICICI had limited expertise with its key activity being the disbursement of
eight-year loans to big clients like Reliance Industries and Telco through its nine
zonal offices In effect the company had one basic product and a customer
orientation which was largely regional in nature
Kamath having seen the changes occurring in the financial sector abroad
wanted ICICI to become a one-stop shop for financial services He realized that in the
deregulated environment ICICI was neither a low-cost player nor was it a
differentiator in terms of customer service The Indian commercial banks cost of
funds was much lower and the foreign banks were much savvier when it came to
understanding customer needs and developing solutions Kamath identified the main
problem as the companys ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
Steps taken to overcome challenges
The change program was initiated within the organization the first move
being the creation of the infrastructure group (IIG) oil amp gas group (OampG)
planning and treasury department (PTD) and the structured products group
(SPG) as the lending practices were quite different for all of these Kamath
picked up people from various departments who he was told were good for
these groups
Change Management Page 20
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 21
The approach towards creating these new skill sets however led to one
unintended consequence As these new groups took on the key tasks a
majority of the work along with a lot of good talent shifted to the corporate
center While the zonal offices continued to do the same work - disbursing
loans to corporates in the same region - their importance within the
organization seemed to have diminished An ex-employee remarked The
way to get noticed inside ICICI after 1996 has been to attach yourself to
people who were heading these (IIG PTD SPG OampG) departments These
groups were seen as the thrust areas and if you worked in the zones it was
difficult to be noticed
Another change management problem surfaced as a result of ICICIs decision
to focus its operations much more sharply around its customers In the system
prevailing if a client had three different requirements from ICICI he had to
approach the relevant departments separately The process was time
consuming and there was a danger that the client would take a portion of that
business elsewhere To tackle this problem ICICI set up three new
departments major client group (MCG) growth client group (GCG) and
personal finance group Now the customer talked only to his representative in
MCG or GCG And these representatives in turn found out which ICICI
department could do the job
Though the customers seemed to be happy about this new arrangement people
within the organization found it unacceptable In the major client group a staff
of about 30-40 people handled the needs of the top 100 customers of ICICI
On the other hand about 60 people manned the growth client group which
looked after the needs of mid-size companies Obviously the bigger clients
required more diverse kinds of services So working in MCG offered better
exposure and bigger orders The net effect was that the MCG executive ended
up doing more business than the GCG executive A middle-level manager at
ICICI commented The bosses may call it handling growth clients but the
GCG manager is actually chasing non-performing assets (NPA) and Board of
Industrial and Financial Restructuring (BIFR) cases
Change Management Page 21
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 22
Kamath was quick to deny this allegation as well Just because somebody is
within the MCG does not guarantee him success And these assignments are
not permanent Todays MCG man could easily by tomorrows GCG person
and vice-versa Complaints against these changes put in continued and ICICI
was blamed for not putting in adequate systems in place to develop the right
people The manner which ICICI recognized an individuals efforts - the
feedback process - was also questioned A manager remarked Last year the
bonuses varied from Rs 30000 to Rs 250000 depending on the performance
In many cases the appraisal scores were same but the bonus amount was not
And we were not told why
With Kamaths stated objective to make ICICI provide almost every financial
service separating the customer service people from the product development
groups was another problem area In the current scheme of things an MCG or
GCG person acted as a clients representative inside ICICI The MCG or GCG
person understood the clients need and got the relevant internal skill
department to develop a solution Unlike foreign banks there were no
demarcations between these internal skill groups and client service person
(Demarcation helped in preventing an internal skills person from cannibalizing
business being developed by the client service group) With no such systems
in place at ICICI this distorted the compensation packages between the
competing divisions
While Kamaths comments in the media seemed to dismiss many of the
employee complaints ICICI was in fact putting in place a host of measures to
check this unrest One of the first initiatives was regarding imparting new
skills to existing employees Training programmes and seminars were
conducted for around 257 officers by external agencies covering different
areas
In addition in-house training programmes were conducted in Pune and
Mumbai During 1995-96 around 35 officers were nominated for overseas
training programmes organized by universities in the US and Europe ICICI
also introduced a two-year Graduates Management Training Programme
(GMTP) for officers in the Junior Management grades Along with the training
to the employees management also took steps to set right the reward system
Change Management Page 22
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 23
To avoid the negative impact of profit center approach wherein pressure to
show profits might affect standards of integrity within an organization
management ensured that rewards were related to group performance and not
individual performances To reward individual star performers the method of
selecting a star performer was made transparent This made it clear that there
would be closer relationship between performance and reward
However it was reported that pressure on accountability triggered off some levels
of anxiety within ICICI which resulted in a lot of stress in human relationships
Dismissing reports of upsetting people Kamath said much of the restructuring plan
has come from the bottom ICICI also reviewed the compensation structure in place
Two types of remuneration were considered - a contract basis which would attract
risk-takers and a tenure-based compensation which would be appealing to employees
who wanted security Kamath accepted that ICICI had been a bit slow on completing
the employee feedback process Soon a 360-degree appraisal system was put in place
whereby an individual was assessed by his peers seniors and subordinates As a result
of the above measures the employee unrest gradually gave way to a much more
relaxed atmosphere within the company
Change Management Page 23
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 24
Chapter 7
MERGER CHALLENGES
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 and was present in almost all the areas of financial services
medium and long term lending investment and commercial banking venture capital
financing consultancy and advisory services debenture trusteeship and custodial
services
ICICI had to face change resistance once again in December 2000 when ICICI Bank
was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times
the size of BoM its staff strength was only 1400 as against BoMs 2500 Half of
BoMs personnel were clerks and around 350 were subordinate staff There were large
differences in profiles grades designations and salaries of personnel in the two
entities
It was also reported that there was uneasiness among the staff of BoM as they felt that
ICICI would push up the productivity per employee to match the levels of ICICI7
BoM employees feared that their positions would come in for a closer scrutiny They
were not sure whether the rural branches would continue or not as ICICIs business
was largely urban-oriented The apprehensions of the BoM employees seemed to be
justified as the working culture at ICICI and BoM were quite different and the
emphasis of the respective management was also different While BoM management
concentrated on the overall profitability of the Bank ICICI management turned all its
departments into individual profit centers and bonus for employees was given on the
performance of individual profit center rather than profits of whole organization
ICICI not only put in place a host of measures to technologically upgrade the BoM
branches to ICICIs standards but also paid special attention to facilitate a smooth
cultural integration The company appointed consultants Hewitt8 Associates to help in
working out a uniform compensation and work culture and to take care of any change
management problems
Change Management Page 24
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 25
71 POST MERGING CHALLENGES
The amalgamation of ICICI bank with BoM came in to effect on August 13 2010
when RBI approved the deal The key issues that hindered the proposed merger have
been discussed earlier now the focus of ICICI bank should be on followings-
a) HR ISSUES Human capital has always being a major concern for the merging
firms The integration of human resource of both the entities sets the path of growth
through synergy Work cultures have always differed from organization to
organization To cope up with the change depends on the ability of the organization
and its problem solving approach In the amalgamation of ICICI bank and BoR the
issue related to the fear in the minds of employees of being sacked by the transferee
bank should be considered as major challenge after merger It was already assured by
Ms Chanda Kochhar CEO and Managing Director of ICICI bank that no employee
will lose job after merger
b) RISK OF DETERIORATION OF QUALITY OF ASSET As Bank of
Rajasthan have members of branch in the interior and rural area of Rajasthan number
of loans disbursed to agricultural workers and the low profile people of the rural
areas In future there may be problem of recovery and chances of delinquency of such
pre merge loans by Bank of Rajasthan It may increase the NPA in the near future
c) LEVERAGE AND SYNERGY Before the deal announcement the share price of
the ICICI bank was Rs 889 where the swap ratio implied substantial premium to the
Bank of Rajasthan‟s present price which was almost 89 higher Do this high amount
paid for synergy The major challenge before this merger deal would be to gain
synergies which could be in any flow such as cost optimization through better
negotiation with vendors economies of scale eliminating overlaps and many more
Secondly through revenue enhancement this infers new market access (as ICICI bank
will be able to get readymade access to Bank of Rajasthan‟s wide branch network in
north and west India) Thirdly by way of technological leverage and forth could be
forward and backward integration
Change Management Page 25
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 26
ICICI conducted an employee behavioural pattern study to assess the various fears
and apprehensions that employees typically went through during a merger (Refer
Table I)
Table I
Post-Merger Employee Behavioral Pattern
Period Employee Behavior
Day 1 Denial fear no improvement
After a month Sadness slight improvement
After a Year Acceptance significant improvement
After 2 YearsRelief liking enjoyment business development
activities
Based on the above findings ICICI established systems to take care of the employee
resistance with action rather than words The fear of the unknown was tackled with
adept communication and the fear of inability to function was addressed by adequate
training The company also formulated a HR blue print to ensure smooth integration
of the human resources (Refer Table II)
Table II
Managing HR during the ICICI-BoM Merger
The HR Blueprint Areas of HR Integration Focussed On
A data base of the entire HR structure
Road map of career
Determining the blue print of HR moves
Communication of milestones
IT Integration - People Integration -
Business Integration
Employee communication
Cultural integration
Organization structuring
Recruitment amp Compensation
Performance management
Training
Employee relations
Change Management Page 26
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 27
72 Managing HR during The ICICI-BoM Merger
Areas Of HR Integration Focussed On
Employee communication
Cultural integration
Organization structuring
Performance management
Training
Employee relations
By June 2001 the process of integration between ICICI and BoM was started
According to a news report The win-win situations created by HR initiatives
have resulted in high level of morale among all sections of the employees from
the erstwhile BoM
To ensure employee participation and to decrease the resistance to the change
management established clear communication channels throughout to avoid any kind
of wrong messages being sent across Training programmes were conducted which
emphasized on knowledge skill attitude and technology to upgrade skills of the
employees Management also worked on contingency plans and initiated direct
dialogue with the employee unions of the BoM to maintain good employee relations
By June 2001 the process of integration between ICICI and BoM was started ICICI
transferred around 450 BoM employees to ICICI Bank while 300 ICICI employees
were shifted to BoM branches Promotion schemes for BoM employees were initiated
and around 800 BoM officers were found to be eligible for the promotions By the end
of the year ICICI seemed to have successfully handled the HR aspects of the BoM
merger According to a news report The win-win situation created by HR initiatives
has resulted in high level of morale among all sections of the employees from the
erstwhile BoM
Even as the changes following the ICICI-BoM merger were stabilizing ICICI
announced its merger with ICICI Bank in October 2001 The merger to be effective
from March 2002 was expected to unleash yet another series of changes at the
organization With Kamath still heading ICICI analysts were hopeful that the bank
would come out successfully in the task of integrating the operations of both the
entities this time as well
Change Management Page 27
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 28
Chapter 8
ICICI BANKS FIVE lsquoSrsquo CLEAN UP ACT
Five S is one of the basic tenets of lean Manufacturing It originated in Japan as a
work-environment enhancing measure but the Japanese believe this visually-oriented
exercise is useful not just for improving the physical environment but also for
improving Total Quality Management (TQM) processes
The Five S are as follows
1 Seiri (sorting out)
2 Seiton (systematic arrangement)
3 Seiso (spic-n-span)
4 Seiketsu (standardise) and
5 Shitsuke (self-discipline)
In the first step (sorting out) individual owners sort their belongings into
needs and wants
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)
Next is to standardise the policies and rules
Finally it is self-discipline that is required to sustain Five S
81 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 S2)
are being regularly and effectively carried out and the workspace is kept clean
Change Management Page 28
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 29
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
82 Implementation of Five S at ICICI
Its 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 ICICIs back office for integrated operations at
Mahalaxmi (central Mumbai) the company claims to have saved Rs75 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 confident that earlier document
retrievals would take up to two or three days
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 15000 employees grudgingly gave up
their weekends to come in to office ndashand clean their workplace
In the process the bank freed up huge amounts of shelf space Consider this
in the HR department alone throwing out old unwanted reacutesumeacutes 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 600000 a year
on payments to third-party warehousing companies since records can now be
stored in the office
Change Management Page 29
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 30
The bank set up retail banking operations in1994 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 25 million cards
issued in less than five years
The bank was growing furiously in the period1997-2001 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 of 2003 ICICI Bank of ficials realized 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 shop floors around the world
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
Change Management Page 30
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 31
83 Outcomes of Five S Implementation
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 The750 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 10minutes lights and computers are
switched off to save power
Five S is an entirely people-driven initiative and ICICI Bank hasnt 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
Change Management Page 31
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 32
Chapter 9
EFFECTS OF CHANGE
During the process of change over the last five years is expected ICICI to solve few
challenges in the change The whole process of change in an organization there will
be some surprise as the normal stress but how to manage stress and make a difference
in perspective on change management within the organization
ICICI also follow few methods as amended by the adoption of Real-time scenarios
such as the parking of vehicles Opposes any change in the organizations leadership
to try good employees while some employees to change or wishing to enter these
areas These workers will change parking in some areas in order to remove a barrier
and is flush with the front as needed This scenario has been changed to ICICI
organization He was a golden handshake that staff have their fields rather than with
the changes (KV Kamath 2005) may be responsible ICICI is also some changes in
business processes and infrastructure in the past five years Management of services
of finance such as P amp G IIG etc to provide one-stop financial services to its
customers But the way this process takes time if you need customer service in
various departments at the same time because the opportunity arose and that
customers can switch suppliers To meet this challenge because of changes in
business ICICI have formed in other parts of the Personal Finance Group the largest
group of clients and customers are becoming more and more Through these passages
demanding customers come into contact with the representatives of this group to
obtain the services of different departments
Thus by ICICI and the change has been following a policy rule to provide customers
satisfied and get the same services more efficiently The following were some of the
effects of change management at ICICI
A majority of the work along with a lot of good talent shifted to the corporate
center
An ex-employee remarked The way to get noticed inside ICICI after 1996
has been to attach yourself to people who were heading these departments
These groups were seen as the thrust areas and if you worked in the zones it
was difficult to be noticed
Change Management Page 32
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 33
Complaints against these changes put in continued and ICICI was blamed for
not putting in adequate systems in place to develop the right people
The feedback process - was also questioned
In many cases the appraisal scores were same but the bonus amount was not
91 Imparting New Skills to Existing Employees
Training programmes and seminars were conducted
Overseas training programmes
Introduced a two-year Graduates Management Training Programme (GMTP)
Best advantage is that Five S could be easily followed by everybody from the
peon to the president
ICICI company claims to had saved Rs 75 crore
Five S had contributed generously making up 50 per cent of the savings
The lower rung employees boast of tracing documents in record time just 30
seconds
The company appointed consultants Hewitt Associates to help in working out
a uniform compensation and work culture and to take care of any change
management problems
92 ICICI also reviewed the compensation structure in place
Two types of remuneration were considered
A contract basis which would attract risk-takers
A tenure-based compensation which would be appealing to employees who
wanted security
93 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
Change Management Page 33
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 34
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 brain
storming 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
Change Management Page 34
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 35
Chapter 10
CONCLUSIONS
Change has to be a common system in the world at present days are changes in the
organization are a number of reasons processes such as mergers divisions or
departments etc personnel management although it should have a strong will and
the ability to change and resistance in the results of the changes at the organization
OU change is an important process and should provide a detailed study and manage
an organization Management and business change is not solely dependent on but
the business processes but it also depends on culture resources and many other
factors contributing to the organization Show here the analysis of research projects
change management was ICICI Bank the Institute for the Future in the management
of change in the past five years undertakes short-term support
ICICI main objectives of the organization of businesses in their statements and the
process of modernization can encourage private investment in partnership with some
of the organization and much more The change occurs share in any organization
because of certain factors that demand for change These factors are considered
factors change Change Given these factors factors changes in internal and external
factors of the organization Internal factors include changes in leadership shortage of
labor the application of new technologies and some their internal affairs Externalities
change in government policies including competition economic changes and rising
costs of infrastructure and raw materials
ICICI is one of the banks in India as a quick reaction to changes in the organization
Since its inception it has been many changes in the organization But in the last five
years a few steps from design and politics In the appointed Kamath past as the
organization of business processes has changed in the past five years with an exciting
plot and follow some of the strategies for organizational change and change
management Rule 90 days the rental system the basic rule is bound by certain
strategies of change management in planning and managing change without affecting
the policies of the central bank ICICI successfully manage change following a few
models that exchange Model Kurt Lewin was unable to obtain customer satisfaction
with the support of the changes you made in your business processes
Change Management Page 35
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2 Page 36
BIBLIOGRAPHY
wwwbusinessballscom rsaquo leadershipmanagement
httpwwwbusinessballscomchangemanagementhtml
wwwskillmattersinicicipdf
httpwwwslidesharenet
httparticleseconomictimesindiatimescom
httpwwwicicibankcomaboutuspdfchange-
managementpdf
enwikipediaorgwikiKVKamath
httpwikianswerscomQHistory_of_icici_bank_in_detail
wwwicmrindiaorgcasestudiesicici-change-
management1html
httpseminarprojectscomsicici-change-management-case-
study
Change Management Page 36
INTRODUCTION 11 Concept of Change Chapter 2