September 29, 2012

How Chanda Kochhar managed 2008 crisis ?

Chanda Kochhar 2008—we had to manage situations where customers were questioning our soundness and we saw abnormal deposit withdrawals. In 2008, when the global financial crisis hit, people started saying, “ICICI is a global bank, so if something is going wrong with the global economy, it will go wrong with ICICI.” And the only way to cope with that was for me to get into every little detail. 
We set up a control room, and I was asking very specific questions. 
“What is our strategy for small depositors who come to the branches?” 
“How will we communicate with our employees?” 
“How are we handling the regulators, the large investors, the media?”
There were also the operational things. We had to figure out how much cash we needed to make available in each branch and ATM to make sure we didn’t run out if people wanted to make withdrawals. And that meant getting into very precise mathematical calculations. “If at every ATM everybody were to do a transaction every three minutes and this is the average amount of cash they would withdraw, what is the cash we would need on a daily basis?” “How do we move all that money physically from our cash chest and get it into the ATMs—how many trucks will we need?”
Then we had to think through dealing with the media. “What are the 25 questions we might be asked and how should we answer them?” And we had to remind ourselves to be patient because every media person was going to ask the same 20 questions over and over again.
We went to our branch managers with detailed instructions, saying not just that these are the answers you should give but reminding them that when customers come, managers should be relaxed, ask them to sit, and offer them a glass of water first, before even starting to talk with them. We felt it was really important that managers not seem stressed or confused but project an aura of confidence and composure, so they could give that confidence to the customers.
I was deeply involved in all those issues. These are times when the leader must be prepared to get into that level of detail on execution.

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