Axis Bank grooms future leaders for key positions
The move was planned in Hyderabad, where top 40 executives drew out a 2020 people’s agenda to look at the second level & develop a pipeline of talent.
With six years to go, Sharma wants to ensure that when it is time for her to move on, it is not deja vu for the bank. Sharma was an outsider and from the insurance sector when the Axis Bank board picked her to succeed Nayak in 2009. Then, Nayak, himself an outsider, had dissented, saying someone capable from within the organisation should be elevated.
To have an answer to who will audition for her job, Sharma started reshuffling the top deck at the private lender this year — Rajiv Anand was made head of retail banking, Siddharth Rath was appointed head of treasury operations and Parthasarathi Mukherjee was made president of large corporates and international business.
The move was planned at the bank’s annual manpower and leadership meeting in Hyderabad, where some top 40 executives drew out a 2020 people’s agenda to look at the second level and develop a pipeline of talent.
“This has not been triggered by any event. Switching roles gives an individual a well-rounded exposure. One has to do succession-planning, which this bank lacked in the past,” said Sharma, who is also the bank’s managing director. “This is part of the reorganisation planned at the beginning of the year and a move towards leadership development.”
The 2009 boardroom tussle over who should lead Axis had seen Nayak pitch for the candidature of Hemant Kaul, who headed retail operations. “When I took over as the head of Axis Bank, people said I had no experience in banking, as I came from an insurance company. But I have worked my way through the organisation by acquiring skills over a period of time,” Sharma said.
Amid the slowdown in corporate lending, Axis Bank has picked Anand to grow its consumer lending business. The bank’s leadership believes he has a good understanding of retail distribution. Over the next two years, the bank plans to increase the share of retail lending to 35-40% from 30-35% now.
Anand, who was head of the Axis Mutual Fund earlier, has been working with RK Bammi, executive director for retail banking, to be able to take over the reins once Bammi retires in 2014. Jairam Sridharan, who was brought in as head of Axis Bank’s retail business in 2011 after a stint with US-based Capital One, will continue to grow the lending business.
Mukherjee, who was heading the bank’s treasury operations, has been moved back to credit to groom talent, while corporate banking president Siddharth Rath has been moved to head treasury operations. Many credit decisions on the corporate side, which were executed by the bank in the last one year, have backfired as companies have been caught in a slow growth cycle.
“This shuffle is to ensure that the top talent gets exposure to different kinds of experiences. This is a thoughtful move and is not driven by any agenda,” Sharma said. As a part of its annual manpower plan, the bank has divided its staff into three categories.
In the first tier, there are 40 executives who have been identified as key positions and are part of the top management. Of this, five to six executive roles are changed every year. The average age of an employee in this tier is 47 years. At the second tier, the HR maps 500 people and creates a diary charting their skills, weaknesses and aspirations.
The job profile of 20% of the staff working in this tier changes every year to ensure that the bank has a rejuvenation of talent every five years. The next tier groups 2,000 middlelevel executives working as branch and circle heads.
“The change of business roles is planned in October, wherein the employee is given an indication of the change in role and the transition is executed in April. However, the first preference is given to employee preference,” said Rajesh Kumar Dahiya, president, human resources, at Axis Bank. “The changes planned in the October cycle is fed into the board. The idea is to have a coverage ratio of 1:2 for every key role in the bank.”
HR experts say diversity is an important aspect in succession planning. “A person from a different function can bring in diverse perspective, new ideas, lateral thinking and innovation. So, bringing in a person from diverse backgrounds is a foundational aspect of succession planning,” said Aditya Narayan Mishra, president, Randstad India.
“There could be five people in a team who are experts in their areas but possibly a leader from a different background could usher in out-ofthe-box fresh thinking. However, organisations in such circumstances should be able to explain the premise to people to manage expectations and avoid conflict situation in team,” said Mishra.
While Sharma may have sometime before she hangs up her boots, the bank seems to be mentoring V Srinivasan, executive director and head corporate banking, to take over the job. Sharma, though, would want to ensure that these changes don’t upset the other top executives.
For instance, the leadership team at ICICI Bank, the country’s largest private sector bank, quit after Chanda Kochhar was anointed the MD and CEO. “Internal communication is a very important element of succession planning, as a lot of uncertainty could prop up in the team. Bringing the issue to the table and talking about it openly is crucial to prevent disharmony within the existing team,” said Randstad’s Mishra.
“Training is just one aspect of leadership development. We believe in them going through the job grind, stay connected with industry and network,” said Axis Bank’s Dahiya. “My belief is that at the MD level, the dynamics and the challenges the CEO has to face are different. A piece of learning that we give our employees at the very senior level is (about) broadly understanding trends and scenarios. So, our board guides us and those are largely in the areas of scenario-building, global economic trends, learning from past events. Top leaders spend a lot of time with regulators. The regulator is a big teacher to us. Not everyone can be a CEO,” said Dahiya.
The bank is also preparing itself for the competition that will intensify on the HR front once the Reserve Bank allows new entrants. Axis Bank runs partnership programmes with Dukes London and with the IITs to prepare future bankers. It also takes 40 executives every year from premier management colleges.
To ensure gender diversity, the bank recently partnered with ISB to hire only women bankers. “These women come straight at the assistant vice-president level, so they bypass six to seven years of banking to ensure the retention level is high. We do not have any bias towards women,” said Dahiya.
(With inputs from Rica Bhattacharyya)