← Redefiners
Redefiners
Banking on Change: How Standard Chartered Group Chief Executive Bill Winters Stays Ahead
00:29:38
Stepping into the CEO role is a challenging transition for any leader to make. It’s even more challenging when you know you’re stepping into the role at a turbulent time in an organization’s history.Our guest today experienced that transition over ...
Loading summary
Transcript53 lines
- [00:00]
A
Call them change makers, call them rule breakers. We call them redefiners. Hi, everyone, and welcome back to another episode of Redefiners. I'm Marla Oates, a leadership advisor at Russell Reynolds Associates, and I'm thrilled to be joined by my wonderful co host, Clark Murphy.
- [00:23]
B
Marla, happy to be back. Great to see you again. And we're going to have a great episode.
- [00:28]
A
We are going to have a great episode. And it was so nice to see you in Houston when we got to celebrate our wonderful colleague Steve Newton and his 40 years at the firm. I'm back in Texas. You're in New York. And our guest today is in London, a place you and I have both lived in the past and call near and dear.
- [00:46]
B
We've got the podcast spanning the globe. This is what we set out to do. This is great. It's good.
- [00:50]
A
Look, before we get started, just a quick reminder to our listeners that you can find all episodes of Redefiners and leadership lounge on YouTube. And if you're watching Redefiners on YouTube, please don't forget to hit that subscribe button. And for our audio listeners, don't forget to rate redefiners Wherever you listen to your podcast. We love to see your feedback.
- [01:10]
B
Marlo. We talk about redefiners and global leaders. We've been so fortunate in healthcare, oil and gas, metals and mining. And our guest today literally is a redefiner, but in the global finance world. In his career, he has redefined himself. In his career as an entrepreneur and running one of the largest financial institutions in the world, he's redefined the institution itself. He's also shown the public private partnership that's so effective in working with regulators through crises. So I think this concept of the global leader in redefinition is right here today.
- [01:43]
A
Yeah, look, it reminds me, Clark, of another redefiner, another global citizen. You'll recall, a few weeks ago, we had Andy Penn of Telstra, who lives in Australia, had really navigated both a tech transformation and an operational transformation. I will have the pleasure of actually seeing Andy here in Austin next week. So this redefining moment, these global leaders, you know, it very much is at the forefront of what we're seeing in the industry and market today.
- [02:12]
B
I think for our listeners in the world of so much change today, there are going to be some great lessons learned, things to say. I can use that in what I do day to day and as I help redefine where my company's going.
- [02:24]
A
Yeah, that's right. And look, I'm really excited for our guest today. He's actually the CEO of a bank that's been around for a very long time. This is a bank that was started in 1853. It has more than 80,000 employees around the world, 20 billion in operating income. He stepped into the CEO role at a pretty turbulent time in the bank's history. What he's built is truly a compelling story of transformation and importantly, value creation.
- [02:52]
B
Our guest today is Bill Winters, the group chief executive of Standard Chartered Bank, a global bank headquartered in London, but a household name in Asia and Africa and all the parts of the world that one would want to be in. Bill was co chief executive of the Investment bank in JP Morgan where he spent 26 years and after that he was an entrepreneur. He started the private credit fund called Renshaw Bay. Bill is also on the board of the International Rescue Committee, one of the great institutions of the world. He's on the board of Stripe and he's the chair of the Cornet Theater. Bill, welcome to Redefiners.
- [03:26]
C
Great to be here. Thank you for having me.
- [03:28]
A
Bill, before we get started, some of our listeners and viewers may not be familiar with Standard Chartered, even though it's been around since the 1800s. Can you please give us a quick overview of the bank and perhaps how it's different than some of the other financial institutions.
- [03:44]
C
Standard Chartered has indeed been around for a long time. Actually originally it was the Standard bank of Africa and the Chartered bank of India, China and Australia which came together in 1969 to form Standard Charter. Both of those were banks commissioned by Royal Charter basically to provide the financial infrastructure for the Empire. The British Empire at the time at our roots is financing trade and financing cross border investment flows that that has evolved into being a very major payments bank and then veering into big chunks of what you would call investment banking today in terms of capital markets activity and in particular in fixed income markets. But about half of our business also is retail banking where we operate in 25 markets. From a retail perspective, the biggest single component of that is wealth management. So we're dealing with affluent people where we're the third largest wealth manager in Asia and the fastest growing wealth manager in Asia. A very important part of our business. So it's a universal bank, it's a global bank. We're the sixth largest clearer of US dollars with the top four being American, were the largest international clear of RMB in China and a bunch of other currencies. Although compared to the behemoths of banking, we're mid sized that presents both the challenges of being mid sized and not having the same scale as my old shop, J.P. morgan, but also has some tremendous opportunities in terms of the ability to be more agile.
- [05:12]
B
Well, I like the global definition of mid sized. It's mid size with a heck of a lot of scale, both geographically and products. Great career at Morgan. Then you're an entrepreneur at Renshaw Bay and you decided to go to Standard charted kind of at the worst trifecta. The regulators were angry, the profits weren't where they should be, the board had upheaval and you take the job. What made you decide to do that and then.
- [05:38]
C
Well, that trifecta is why My assessment back in 2015 was that this was a really good bank with a really good franchise with very loyal customers, a fantastic brand, but had stumbled on some pretty big problems. If we could clear up the problems and rub off some of the rust, there'd be another fabulous bank underneath that. As I reflect on 11 years, we cleaned up the mess pretty quickly. It turned out that there was in fact a really good franchise with really good people, really good and loyal customers. A very strong brand. You also mentioned that I set up a private credit company. I wish I'd called it a private credit company because if I had, we'd be managing 5 trillion doll dollars right now and be worried about redemptions. But instead we called it a structured finance fund or something to that effect. But really what we were doing was private credit. Yeah, that was, that was a fantastic chapter. Thankfully, when I did go to Standard Charter, because I was attracted to that trifecta that you described, Clark, we were able to put the biggest operating part of that business into an asset manager that bought the business. But I'm really happy I had that little bit of experience.
- [06:47]
A
Bill, you've been at the bank for 11 years and really orchestrated a pretty fascinating transformation since you stepped in, you know, as CEO. What were some of the key diagnoses that you came to? What were some of the key issues that you were able to solve as you unlocked this value creation story?
- [07:04]
C
I have had some experience kind of settling down an unsettled situation even before I got to Standard Charter. The first thing is to diagnose the problem. And it's always interesting to me how difficult it is for incumbents to diagn what's really wrong. And that's the benefit, I think, of having somebody come in from outside is that somewhat brutally, you strip everything down to core principles, understand and diagnose the problem. Step two is to whatever you're going to do, do it faster than you think you need to. And whatever tough decisions you're going to take, take them earlier. The more inhumane way to characterize that is if you have to fire people, fire them before you get to know them too well, because it gets really hard once you've brought them into your circle of trust. We diagnosed an organization that had emphasized top line growth over returns and had emphasized top line growth over controls. So it manifests itself in compliance failures that the New York State Department of Financial Services and the Department of Justice in the US together with the regulators in the UK had dropped a big old hammer on the bank, including large fines and monitor ships and things like that. Loan growth had outstripped our ability to control them. So we had big embedded credit losses. And I'd say generally there was a slackening of the control environment, including to some extent expense management that had allowed the organization to race ahead of itself. So we had to strip all that back. So big investments in the control environment. I made a big mistake as part of that, which was to not recognize how risk averse the organization had already become by the time I arrived. So we hit the brakes hard on a lot of things and we significantly delayed the organization. So part of the driving for growth was that we ended up with layers of management that were unnecessary or inappropriate for the organization, with in many cases, very narrow spans of control. So we took about 25% of the senior leadership of the bank out during that process, which meant bringing some talent in from outside, which we did. But as you know, at Russell Reynolds, bringing talent into a firm that is just top of the charts and doing exceptionally well is different than bringing talent in into a turnaround. But we did and we got a great team and many of them are here today driving those same client franchises that we recognize as valuable at SAND or chartered.
- [09:32]
B
In the beginning, how do you identify the unsung heroes and how do you develop, give them the primacy to go forward in times of turmoil? It's probably not that black and white, I know, but how do you think about that?
- [09:48]
C
I know that you have a better shot of spotting them if you're a little bit closer to the ground than if you're flying at 45,000ft because you're getting a heavily distilled version of who the value adders are. I emphasize getting a little bit closer to the ground over having that heavily curated, heavily distilled information set at the top of the organization that might allow for a faster, sharper strategic orientation. I don't know, but I've made that trade off and I think it's worked well for me.
- [10:22]
A
Yeah, innovation is such a big theme as We've talked to CEOs over the last couple years. And in the banking world you have to walk a really fine line, I imagine, balancing the risk and reward in addition to innovating and staying current with your peers and competitors and the digital banks. How do you go about managing this delicate balance?
- [10:46]
C
It's culturally very difficult because the external signals that come into the management probably of many companies, but certainly of a highly, highly regulated bank, the external impulses and signals are cautioned. Checks and balances, take your time, test small, grow from there. The business itself is super dynamic and of course we're competing with people that aren't regulated like banks who have in their nature, but also in their strategy can be much faster and more agile. So I remind my colleagues regularly that I reject the notion that we're constrained by regulation. Many will say a bank can't run a digital bank because of all your legacy infrastructure and because of all your regulatory requirements. I said, let's turn that around. We took some legacy infrastructure from Standard Charter, where it was best in class compliant systems, for example. The second is, oh yeah, but you have much higher compliance standards than a non bank. I said, no, let's see how we can turn that into an advantage. If we have better kyc, better cdd, better compliance, better fraud detection, let's see how we can target a customer base where those skills will be more useful and can give us an edge. We all know stories of digital banks that have gotten into a lot of trouble. They've grown very fast, maybe ahead of their own compliance systems. Regulators have come in and put the big check on them and said, now hold on, you don't get to grow anymore. Well, that's very debilitating for a startup where the employees are incentivized by growing volumes or market share. So I don't accept the conventional arguments around why it's difficult to innovate in a bank. Rather, let's pick those areas where it's absolutely critical for us to begin to understand how a market's evolving digital assets would be one seven years ago, but before anybody had to spell digital assets, we were saying, we think things are going to settle on blockchains. We think payments are going to be conducted in distributed ledger technology and security settlement and things like that. And how can we get exposure to this area that we don't really know or understand today? And the answer in our case was to build a bunch of ventures initially anchored in cryptocurrencies because that's where these things were being used actively at the time, but with the view somehow that this technology would be useful for other things. And now we've got a bunch of successful ventures. We built them in non banks, so they weren't regulated like banks. They therefore had none of the advantages of being in a bank. We didn't have easy, cheap funding source. We didn't have a lender of last resort. We didn't have the credibility that comes with being a bank where the counterparty knows that in extremists you have a lender of last resort. So big disadvantages, but also some advantages. And we figured out how to do it. And now we're the only G Sib and we're the only G Sib that has a license to trade digital assets. So now we can bring that set of capabilities that we developed outside of a bank and bring it back into the bank and hopefully we can translate that into a lead in terms of the finance of the future, which I think is going to be very digital asset or digitized money anchored.
- [13:54]
A
Yeah. And Bill, I want you now on this same kind of train of thought. Take off the CEO hat for a second, put on the board director hat, you're on the board of Stripe, which we find fascinating at a very old bank as the CEO and then this new technology, a big global payment processing platform. How do you stay on top of the latest innovation and learnings? Because I think a lot of board directors are really struggling at the moment going, man, how do I just stay on top of everything and how quickly the pace of change is moving, particularly as it relates to technology.
- [14:27]
C
Well, it's very tough and I wouldn't count myself amongst those who are on top of things. I always feel that I'm behind, but I am learning a lot. And the more sort of forward looking and forward acting you are, the more people who are already there will talk to you and inform you about where the future is going. So I was of course flattered when John Collinson and Patrick at Stripe asked me to join the board. By virtue of being on that board, I think I am able to share some insights with them, but I'm also getting a huge amount of insight from them in terms of, you know, what does it mean to be an AI native company and what does it mean to understand why your customers want to use their digital wallet for payments or why a merchant is setting up a digital wallet? It's not because we sold it to them. It's because it's something that they need for their business. And they found that that stripe, or in a different context, Standard Chartered is in a position to accommodate that. So I think you can get into a virtuous circle if you're both delivering into that circle and you can take out in terms of knowledge. But I'm curious, and I think that it helps if you're innately curious.
- [15:35]
B
Again, it circles back to redefining, and you're redefining Standard Chartered. Inside the history of Standard Chartered, the Wise Owl has the patterns of recognition of decades. We may not want to admit that we don't want to tell anyone how long Clark and Bill have known each other. It's kind of embarrassing, but in a learning environment, we talk a lot about lq learning quotient that an executive has who then imbues it into the culture of the organization to say, we don't keep learning, we go out of business. And yet Standard Chartered keeps evolving. So as you redefine Standard Chartered, the board of directors, which had a bit of upheaval when you joined, has to buy in and approve and back you. You have a new chair that's just joined. The chair relationship, particularly outside the US is super important. How did the CEO board relationship work, particularly as you made some big decisions and as the board has changed, how do you keep pressing that so that they will back you and the institution?
- [16:34]
C
Part of what we try to do with our board, of course, they have governance responsibilities and they have an obligation to challenge and they have substantial obligations to the regulators, which is not like many other industries. I was on the board of a pharma company for 12 years, Novartis. Of course, as a board member there, you also felt an obligation to the health and safety regulators because people's lives were at risk. We have regular interaction from the regulator, not just one, but many of them to the board. So it is different, but that's one set of their responsibility. I think a board could easily spend all their time on that because it feels somewhat existential. You can't get on the wrong side of your regulator. The key, I think, for an effective board is to be able to balance that with. You can call that defense with offense. We have teach ins where we bring the cyber team or the AI team in, not to expose our doings to the board so that they can challenge and govern, but rather so that we can learn together. And we have these sessions that are sort of off the books, as it were, so they're not minuted. Nobody's being tested. It's just to learn. And the downside of that is it makes it quite time consuming to be a director of a company like ours because you've got to do all the regular stuff and then the extracurricular. But it's probably the most rewarding part of the job, or for all the directors. And then when we come back in to talk about strategy or talk about controls or talk about governance, it's much better informed. My approach to staying on top of my relationship with the board. I'm a member of the board, so we're in the conversations together, but it's to be super transparent, even if that means that they have to observe a little bit of the washing of the dirty linen. But that's okay. I'd rather have them see the cleansing process than to be told at the end of the day that the garment is irretrievable.
- [18:29]
A
We'll be right back with Bill Winters. But first, let's head to our Toronto office and hear from Henrik Krajowski, leadership advisor at Russell Reynolds. He'll share his perspective on how CEOs can create real value.
- [18:42]
D
Today, most leaders understand the importance of strategic focus. The harder part is practicing it in advising CEOs and leadership teams. I often see leaders try to make progress on too many fronts at once, not because they lack discipline, but because pulling back from certain activities can feel uncomfortable, even risky. But we know from our experience that CEOs who focus on fewer, clearer priorities consistently outperform those who try to excel at everything. So how do you achieve that clarity? It often starts with identifying activities that do not truly differentiate your business and having the confidence to pull back in those areas. But there are pitfalls along the way, and we often see CEOs make two common mistakes to learn what they are and how to avoid them. You can find the full article in the show Notes.
- [19:37]
A
Now back to our conversation with Bill. Look, you've been the CEO at Standard chartered now for 11 years, and while it may not be imminent, how do you think about succession planning for you, for the bank? What are you doing to prepare others on the team, the business? Just any advice there for our listeners?
- [19:59]
C
Succession has been a real consideration from the day I arrived. And each appointment that I make to the executive team is with some eye to succession, not necessarily just for myself, but also for the other key roles in the group. We've got a very transparent process. Anybody who's a successor to me knows it. They're going through some dedicated training and development, but that all said, it's never easy because people have different ideas in terms of timing, people have shifting views in terms of the desirability of these roles themselves or the needs of the organization. So it's a process that needs to be handled extremely dynamically. And I'm thankful that Russell Reynolds has been able to help us with that.
- [20:38]
B
In many instances as an institution, Standard Chartered has been through multiple transformations over the last 150 years, but particularly in the last decade. And Bill, you talked a lot about institutionalizing change, but how do you get comfortable for people to take risk, to be comfortable with change, to want to see change as part of their success?
- [21:03]
C
That's such a great question and such a hard one to get right. Change is, it's anxiety provoking. And it's very easy for me at this stage of my career to say, hey, change is great because my personal satisfaction quotient is driven more by what I'm learning than what I'm necessarily doing from day to day. And I'm not that worried about the downside. As one boss of mine famously said, hey, the worst thing that can happen to me professionally is I get fired. I'm not sure that's exactly the worst thing, but I get this fear. But nevertheless, I think we want to attract people that have enough self confidence that they can roll with the change and come out the back end of that feeling really good about what they get to do next rather than feeling like they're always on the edge of a cliff or about to be pushed off. And I think as organizations become more successful to build confidence in our own ability to deliver, change actually becomes something that creates opportunity at an individual level rather than something that just creates anxiety and pain.
- [22:05]
A
So while AI is offering just amazing opportunities for companies, tell us a little bit about how you're using AI at the bank and how do you get people bought in to use it?
- [22:15]
C
People have lots of different ways to categorize the types of things we're doing in AI. Doing what we did yesterday with more advanced data tools or analytical tools. So I'd say code completion, automating manual tasks would be tier one. Tier two is beginning to use agents to redefine the way that we interact with customers or the processes interact with each other, or creation is undertaken. And then stage three might be using AI to do things that you don't do today, that you can't do today, or that you hadn't thought about doing today. Probably most banks or corporations are pretty well embedded in tier one. We're reconfiguring everything that we do today through the lens of AI to be more productive and more accurate and more efficient and all that. We're embarking on Tier 2 in terms of call it agentic commerce or agentic processes, and then state three. I think we're only beginning to imagine there's a lot of anxiety that comes with tier one because you're kind of telling people we're going to displace humans with automated processes. But finance has been forever, thus. I mean, that's been a mantra for my 43 years in banking. We've been talking about automating manual processes. So when I joined Standard charter, we had 85,000 employees plus 15,000 contractors. Today we have 85,000 employees and 15,000 contractors. The difference is there's probably 15,000 fewer clerical workers and 15,000 more data scientists, fraud detection specialists, relationship managers, et cetera. So a lot of it is about reskilling, retooling. As I think we all say, don't fear the AI, fear the person who's using AI better than you. We just want to stay ahead of the game. But where this is going to go,
- [24:08]
B
like, who knows, Bill? We've kind of accepted change as a way of life, whether it's JP Morgan settling something in an unsettled moment, Standard Chartered with regulators and board of directors, profitability. But amongst all that, is there any single redefining moment for you in your career?
- [24:29]
C
When I reflect on my time in finance, I think there have been two paradigm shifts. The first was the derivatization of financial markets, and I just, through dumb luck, happened to be there pretty close to the beginning. When you're there for a paradigm shift, you get to innovate a lot. The second paradigm shift is, in my opinion, the digitization of money. And we're just beginning on that one right now. We kind of took a view that this was a direction of travel, and we made some investments early and we now we have a ringside seat. The aha moment for me on the digitization of money was work that we did with Facebook when they were trying to create their own what today we would call a stablecoin. And it made a lot of sense. It really was a very good idea. Unfortunately, probably not very well executed by the team at that time. So it didn't happen. That experience working together with this tech behemoth who was highly successful in terms of delivering a satisfactory customer outcome, married with some of the financial technology that we were familiar with but hadn't figured out how to use, was A huge aha moment for me and a number of my colleagues which then caused us to go out and create the digital asset infrastructure that we subsequently built and which is now highly relevant.
- [25:40]
A
Well, look, we've come to the part of our time today where we're going to ask you a series of questions. Your job is to answer as quickly as possible and in five words or less. Are you ready?
- [25:51]
C
Five words or less. Oh my.
- [25:52]
B
Okay, question number one. As you travel all over the world, if you could pick one place to live, where would it be?
- [25:59]
C
London.
- [26:01]
B
Describe your leadership style in three words.
- [26:04]
C
Collaborative, empathetic, curious.
- [26:09]
A
What mentor has had the biggest impact on your career?
- [26:12]
C
The guy that was the godfather derivative business at J.P. morgan, Peter Hancock. And the guy who is still the godfather of banking, Jamie Dimon, both had the biggest influence on my career.
- [26:22]
B
What was your first job exactly?
- [26:24]
C
I was a baby banker, so a relationship manager for oil and gas companies in Texas and Oklahoma.
- [26:32]
B
Nice.
- [26:33]
A
Which has taught you more about life failure or feedback?
- [26:38]
C
Failure.
- [26:39]
B
Last one. What's the one thing you think leaders need to rethink about how to prepare for the future?
- [26:47]
C
Understand who your stakeholder is and their anxieties and opportunities and address those.
- [26:56]
B
Listen, Bill, this has been fascinating and redefining. I think if we look back and we think about our listeners understanding Standard Chartered and how you step into situations as you talked about diagnosing the issue and sometimes outsiders have greater clarity than those who have been there to do it faster than you think you need to and take decisions, tough ones, early on and quickly. Don't confuse top line growth over controls and profits. But culture really can define the pace of success and finding the talent to affect culture, which for you is the unsung heroes and you discovered them by the travel time and that standing at 10,000 or 50,000ft that it's too distilled. And you've rejected this concept that you can be constrained as a traditional or historic bank into certain areas of business. And that in fact you can take a lot of those strengths, reevaluating compliance, doing fraud detection better than others so that we can get into the digital bank and reinvent oneself by relying both on on the old and the new. The blend of the old new can define the finance of the future. And all of a sudden you're a g sib who can trade digital assets. Your curiosity, your learning quotient and the decades of pattern recognition help you think ahead. We don't divide those who have learned from the past and those that can act on the future. Combining the pattern recognition, the ability to think ahead is what creates success. And you talked about success with the board of directors and balancing offense and defense, which you've done through history and thinking ahead, you do with the board. So they learn together and that they trust each other through learning together. There are no surprises. And finally a culture of change, which is continuous learning and saying if we can change and get more confidence from what we just went through, then we'll create opportunities from confidence instead of anxiety and the ability to take advantage of a paradigm shift. You probably didn't see the first one when it happened and now you're realizing this digital asset opportunity and the digitization of finance markets. My takeaway is as both we're history buffs, let's learn from the past, but make sure we have the ability to think ahead and listen on the ground, not at 10,000ft, because that's how leaders lead and how leaders win. Thank you for talking about leading and winning, Bill. Fantastic discussion.
- [29:32]
A
Thank you for joining us, Bill.
- [29:33]
C
Thank you both.