Article: Planning for Tomorrow, Today: Q&A with K.V. Kamath

C-Suite

Planning for Tomorrow, Today: Q&A with K.V. Kamath

The visionary with an ability to focus on the details without losing sight of the larger picture, K. V. Kamath shares with Dr. Asha Bhandarker, his journey of creating a financial powerhouse and a pillar of banking excellence in India
 

We were surprised to see that customers value convenience above everything else and were happy to transact through ATMs

 

I believe national transformation is possible if attention is given to the minute details that build the process

 

The visionary with an ability to focus on the details without losing sight of the larger picture, K. V. Kamath shares with Dr. Asha Bhandarker, his journey of creating a financial powerhouse and a pillar of banking excellence in India.

How did the journey with ICICI Bank begin?
I come from a small town and wanted to start something on my own. My father had a manufacturing unit and I thought I would surely go back to that business one day. In my 4th year of engineering, I decided to join the IIMs and joined in Ahmedabad where I specialized in Finance. This landed me at ICICI and I kept deferring my plan to go back to my father’s manufacturing unit.

What are some of the key formative experiences and learning?
My father was responsible for instilling strong ethics in everything I undertook. My personal goals were fairly modest as I did engineering like most people at the time and ICICI was never in the picture. My parents’ biggest contribution was two-fold – firstly, to never compromise on education and everything else I did, and secondly, they always encouraged leadership, being in politics themselves though they never asked me to join politics. My father always pushed me to lead in everything that I undertook and I became a student leader in school and also led the student council during engineering.

How would K.V. Kamath describe K.V. Kamath?
Personally, I am not an aggressive person. Traits that probably apply to me are innovative, agile, adaptive, and inquisitive. But aggressive is the hat that I wear when I am on this seat. I am a simple person and even make my own cup of tea in the morning. Some people find it very hard to believe. So I wear two hats - aggressive for my complex role at ICICI while calm and simple in real life.

Is it very tough to switch between the two hats?
It is not very tough to switch between the two hats. I do not carry work home most of the time. When I leave office, my phone is switched off and I am a different person at home. Frustration comes in cycles but you cannot allow frustration to overcome you.

How do you keep yourself up-to-date with the changes taking place in the world?
I believe I will be obsolete if I do not update myself and therefore honestly spare time for learning in areas beyond banking - like technology and also what other leaders are thinking. I will spend two days at a seminar for 100 CEOs where a variety of people come to share their thoughts. I believe in continuous learning and have no hang-up if any of my colleagues say that they also need to go to an 8-12 days training program.

Through the process of building India’s largest financial house, were you taken by surprise at any stage?
We were surprised by the reaction we got from introducing two customer interfaces – the ATMs and internet banking. Five-six years back when there was less than 1,000 ATMs in the country, ICICI had 70 ATMs, and I said we should have 1,000. I faced tremendous opposition and nobody believed that the ATM strategy would work. The strong belief that customers prefer a human interface brought strong opposition to this strategy. But we were surprised to see that customers value convenience above everything else and were happy to transact through ATMs. Customers became comfortable with self-service. Even when we introduced internet banking, there was skepticism whether people in India will adapt to or have access to internet. Today, less than 15% transactions takes place in the branch, while 25% is done through internet banking, and 10% through call centre and drop boxes. It was astonishing to see customers accepting these changes so easily.

What were the core strategies and how did you know these were the right things to focus on?
My mind works on several levels and I observe a lot – things in general, business, interactions, changes and possible opportunities from that. I retrospect and draw lessons from these observations which I then apply to business. The stages I follow in this include observations, vision articulation, strategy formulation, and execution of strategy. I keep my eyes and ears open. You may call it intuition but there are a lot of things that led to these intuitions.
Let me give you a few examples. 10 years back when we said the next big opportunity in India was in consumer banking, people laughed. This idea sparked from what I observed in China where I saw people with per capita income between USD 500 and USD 1,000 dollars wanting to buy a home or a car. And I saw India facing this challenge as well. We realized we had to work carefully with policy makers to move interest rates down which happened during 1999-2001. The government rates dropped from 9% to 5% so the interest rate cycle corrected dramatically. This happened by repeated observation in domains where per capita income had increased. The focus was to prepare for the domain where per capita income had increased, so that when interest rate corrects we had an opportunity, and that was the take-off platform in 2001. The second example is how observation led to setting up of international offices as a result of seeing a possible rise in remittance. Thirdly, it also led us to realize the big opportunity in rural India.

What spearheaded the concept of continuous innovation at ICICI Bank?
Sometimes innovation is forced upon you, but in our case almost all innovations were a result of constraints. For example, when we faced limitation in our branches, it forced us to innovate on technology to bridge this gap.

People say you fly at 40,000 feet and then hover at 2 inches above the ground. When and why do you do this?
I do this when things have gone wrong or right. For example, I may be driving back home with the new advertisement of ICICI and if feel it has not used the right font or color, I will call up the concerned person to point out the same. Something that will have such a grave impact is too critical to ignore. I believe national transformation is possible if attention is given to the minute details that build the process.

Who all have been your role models?
I admire Jack Welch for being a great thinker and respect him for his quintessential professionalism. I also admire Dhirubhai Ambani’s entrepreneurial drive and his ability to think, quantify and put things down into something that is easily understood.
I remember what he said when we were migrating from being a development bank to a financial powerhouse in the late 1990s – when you change the orbit there is always friction and until that friction is over there will be great despair.
From the political front, I admire Mahatma Gandhi’s lateral thinking and simplicity in thought. To say Satyagraha can achieve everything is far from common sense.

Dr. Asha Bhandarker is Raman Munjal Hero Honda Chair Professor of Leadership Studies at Management Development Institute, Gurgaon.

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Topics: C-Suite, Strategic HR

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