When vast opportunity and a meritocratic culture are complemented by a robust process for managing talent, leadership development becomes a success

Chanda Kochhar joined ICICI Ltd as project trainee in 1984. When, within 10 years of joining, she was sent to ICICI Bank as part of the core team to setup the bank, it was clear that she had been chosen for a more ambitious role than her peers. An internal process had been set in motion, whereby she would be provided with more opportunities to build and lead change as a platform for growth and development. Other similar roles would follow -- from infrastructure finance to building the retail business – mostly assignments to grow a business from its inception phase, until she became CEO in May 2009.

With more than 2,500 employees in the Talent Pool, ICICI aims to create a pipeline of eligible talent to cater to all critical jobs in the bank. This does not happen by default but by strategic design. The company puts serious resources, time and effort behind this important activity of identifying and grooming talent. In 2002, the bank started to grow at an accelerated rate and the previous process, which was heavily dependant on the contribution of board members, had begun to look obsolete. “In 2002, on Mr. Kamath’s initiative, we began to set up a leadership development process to cater to a different scale of business. We got ideas and inspiration from practices followed by GE and Unilever - companies that we felt had mastered the art of leadership development”, says Board Executive Director & HR Head, K. Ramkumar. They took the best practices in the industry and tailored a process for Leadership Identification and Development that essentially moved the ‘ownership’ of this key activity from the MD level to a larger group of people. The prime objective of this process was to scale leadership development to a new level and ensure that the organization had enough talent and leaders available from within to execute their ambitious growth strategy.

And the amazing growth of ICICI in this decade and the seeming ease with which they have created new businesses is evidence enough that the process for creating leaders from within is working very well indeed. At ICICI, leadership is defined in terms of Conviction - to set the change agenda and Persistence -- to live through the period of change whatever the challenges.

With around 35,000 employees in ICICI Bank and more than 80,000 across the group, the process of identifying leaders starts with the Performance Management Process. ‘A pre-requisite to be considered part of the talent pool is to consistently be a good performer’, says Ramkumar; only those consistently on the 25% percentile are considered for the talent pool.

These employees in the top performing category are then profiled on the basis of 9 leadership anchors, known internally as the “ICICI DNA”. These anchors are defined in terms of specific behaviour and also have defined “stoppers” -- unacceptable behaviour that goes against the anchor. For instance, ‘Customer First’ (one of the anchors) is defined by behaviour like consistently leveraging customer interaction as an opportunity to understand customer needs. Conversely, the stopper is defined by actions like promising more than can be delivered. With such precise definitions, the process is able to standardize the seemingly ambiguous task of identifying leadership talent. These definitions are attributes that the core group believes are required of a leader in the organization. Finally, all this information is compiled into a one-page profile which highlights the areas that the panel should be focusing on and gives a cue for potential areas for development.

The final step is a panel assessment that identifies the aptitude and maturity of the employee’s leadership capabilities. ‘The assessment is a combination of process, technology and intuition. We believe you cannot replace personal judgement in the process of identifying leadership talent,’ says Ramkumar.

What the group looks for in a Leader depends on the level of seniority of the employee. The panel focuses only on a very simple approach to identify leaders. For junior level employees, it looks for consistent passion and strong problem solving abilities; for middle levels, being able to build capability internally is key, ie, what has the employee built in the last 2 years in terms of people, processes and systems? For senior level employees, the focus is on the agenda for change that the employee has set in the last 2 years and achieved this successfully by mobilizing people and resources.

Interestingly, the panel needs to arrive at a consensus on whether the employee has the capability to move to the next leadership role and whether he or she is ready to make this move immediately or over another couple of years. If the direct supervisor is part of the panel, he or she is not allowed to intervene in the discussion unless the panel differs on some point, then only the supervisor can bring some information to the table. The idea is that if you have leadership potential, someone else besides your manager should know you or had worked with you. “The panel selects employees on the basis of their strengths and does not normally reject for weaknesses,’ says Ramkumar. ‘The only reason for the panel to reject an employee for weaknesses is when that weakness is considered a ‘stopping behaviour’, for example, a person showing excessive aggressive behaviour is a stopping behaviour for ICICI and hence that person will be out of the talent list.’

The employee is then categorized under “A” List - ready to move to next role immediately, “B” List - ready to move in the coming 2 or 3 years, and “C” List - high performing individual with potential for a specialist role within that area of work without any emphasis on leadership development. This pool is revised annually and feedback to the employees plays a very important role in the overall process.

There is a very significant differential in terms of compensation (bonus, rewards, increments and even ESOPs) and career opportunities for people identified in the talent pool. “Most importantly, they get priority for more interesting and challenging assignments available across the group”, says Ramkumar.

In terms of leadership development programs for those within the talent pool, the objective is to help leaders deal with adaptive challenges which are not amenable to analysis. During the different modules, mostly developed in-house, the participants learn to apply standard models while appreciating that choosing between alternate course of actions will require sound judgment. The key focus of the program is to provide the talent pool an opportunity to build perspective by using the Action-Behaviour-Consequence model. The most unique aspect of the program is the concept of group mentoring, as opposed to individual mentoring, where the entire senior and peer group come together to mentor and aid in the individual’s development. This program is interwoven with top management sessions where the CEO and board members and successful icons play key roles in the group dialogue.

Results show the success of this plan - the targets are ambitious as it aims to create sufficient “bench strength” to cater to all critical jobs in the group. With more than 10 CEO and Board level positions filled only by internal staff in the last 7 months, the program is definitely working and showing tangible benefits.