Change Management @ICICI

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Change Challenges - Part II 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)6. Though ICICI Bank was nearly three times the size of BoM, its staff strength was only 1,400 as against BoM's 2,500. Half of BoM's 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 ICICI's 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 ICICI's 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.

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6] Bank of Madura was established in 1943 at Madurai, Tamil Nadu. By 2000, it was number one bank in Tamil Nadu and it had 278 branches all over India.
7] In 1999-2000 business per employee at ICICI averaged Rs. 59.5 million to BoM’s Rs 22 million and profit per employee was Rs 0.78 million to BoM's Rs 0.17 million.
8] Hewitt Associates is a global management consulting and outsourcing firm specializing in human resource solutions.

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