Anuradha Sengupta: To harness the power of mental models effectively, the middle path may be the best route to take. On Lessons in Excellence today we talk about how paradigm shifts needs to be a two way street. Jerry Wind is here and with him the man who heads the second largest bank in India and has masterminded one of the biggest paradigm shifts in Indian banking, please welcome K V Kamath, MD & CEO of ICICI bank. Jerry, KV, thank you both for being here.

Jerry, this paradigm shift necessarily being a two way street, how often have you seen people seeing it as a one way street? What does experience suggest? Why do they do that? How frequently do they do that?

Jerry Wind: Very often it is very difficult to introduce change into an organisation. If you are a leader and have a new vision of a model, a new approach, a new business paradigm that you want to introduce, you have to sell it through the organisation. It is very easy than to come up with a radical new way and try to rally the troops around it. There is also some virtue in simplicity and coming up with a single simple idea it is easier to sell it and that is the reason we get it.

Anuradha Sengupta: Ok, let me get you in here. The ICICI bank the second largest bank in the country today, you've seen a paradigm shift up close. You have actually orchestrated it, if I may use the word. Was it very difficult, while creating the new model of a private retail bank which is all about universal banking and a financial institution which had a 30 year old history, or more than 30 years.

K V Kamath: Indeed, I would agree with Jerry to start with, change is the key and mindsets are the blocks and unless you are going to unlock these you are not going to succeed. If you need a paradigm change in the business and every business needs it from time to time, you need to think 'How do I effect change?' When you introspect you may find that you have a very competent organisation but on a scale of 10, the ability of the organisation is below 5. You are stumped. You need to address that as a priority and that is what we did.

Anuradha Sengupta: But when you did that you were confronted with the new model or the new mindset that you would need to adopt to deal with the new entity and personality of the bank but you were also left with the ICICI institutional finance company.

K V Kamath: We had three difficulties at three levels actually. The first one was the people who were steeped in the old, the old culture of ICICI bank. The second one was that people though they were in banking as we know it, were not used to technology and third was the customer. Would the customer accept change? We had to address all three simultaneously. The way we went about it that we created a brand first because we said, that is how we need to get identified by the customer. Then we tried to articulate what the brand stands for and we knew that we could not compete with those days of 100 branches with large banking giants. So we had to provide technology as a differentiator. So we provided technology to the customer, initially through the ATM then through the internet and thirdly we slowly started reassessing our organisational structure because you cannot effect change with changing organizational structure.

Anuradha Sengupta: Right, so there is the old and the new but did you throw away the old completely? You had to pick up things from there and adapt to the new way of doing things.

K V Kamath: We had to adopt the old because that is where in the banking business a phrase was coined - click and bricks. So you had to live with the bricks. You could have a lean structure on the bricks but you could not throw it away. And the click complemented the brick or the brick complemented the click.

More than convincing people, it is the ability to believe that this will work. At that point of time if you take a decision you are not sure. On hindsight you can say that this worked and this was the best model but when you take a decision you do not have the benefit of that hindsight. So again that leads to something I saw in Jerry's book 'the power of intuition'. After all data has been analysed, decisions have to be intuitive. Decisions have to be taken. So there is always a bias for not taking decisions and going by saying that I have inadequate data or the data that I have leads to me to a decisions which is what I would quote in court as safe. You have to break out of that mould.

Anuradha Sengupta: Jerry, how important is intuition? How much importance does corporate leaders give to intuition when they are changing from one mental model to another?

Jerry Wind: Intuition is extremely important. Before the intuition let me come back to something that KV said because there is an interesting distinction here. What KV did was a hybrid model. What he did was a convergence model. He came up with what we call in the States a cold click or visit model because the consumer can approach the bank in any way whether it is through the ATM or it will be calling or by internet or by visiting the branch.

Intuition is critically important. The problem is that institutionally we try to downgrade intuition. We don't appreciate it much and there are lot of examples that a lot of the real insight and a lot of the really good great decisions are based on intuition.

Anuradha Sengupta: You mentioned that besides the employees you had to communicate this new paradigm, this paradigm shift, you also had to talk to a whole lot of consumers out there. What do you think was the most crucial in communicating the new approach, the new mental model that you believed in as an organization to people who had to buy that idea and quite literally buy the idea?

K V Kamath: I think people brought into the idea because essentially of the convenience factor that I mentioned. When we started rolling out ATM's there were just 30 or 40 ATM's in the country. We rolled out about a 1,000 a year and people initially explored what this machine was. They had no idea what it was and then saw the convenience, the power of the machine because you are hardly dealing with your bank which is now a machine for 30 seconds and getting your transactions done so I think the speed attracted them, the convenience attracted them. So in a way -

Anuradha Sengupta: Jerry, any parallels to this case study?

Jerry Wind: Well, there is a fascinating bank in Philadelphia, the Philadelphia Commerce Bank that was started on a very similar underlying idea. They defined it a little different. The founder of the bank, he says I am not a banker, I am a retailer. Just happen to retail banking products and services. And the slight difference in the framing from a banker - a traditional banker - the 9 to 5 or whatever the banking hours and the rigidity does not exist anymore when I say that I am a retailer.

Then you say, "Ok, what are the retail hours?" Well retail is open 7 days a week. I am open 24 hours a day and providing the convenience. I am trying to design the service, the appearance and everything to a way to appeal to the consumer. So I find enormous similarity in what KV is doing here and what Commerce Bank is doing - trying to break the traditional paradigm of the banker into more retailer establishment.

K V Kamath: Yes, it is a mental model and I summarise it one word - merit. If you truly run a meritocracy right from the stage of recruitment and then at every stage of the process of growth, you will have gender balance because the law of nature has to work out even in the corporate world.