Piyush Gupta Bio
Mr. Piyush Gupta has been Chief Executive Officer and Director of DBS Group since 2009. Prior to joining DBS, Piyush had a 27 year career at Citigroup, where his last position was Chief Executive Officer for South East Asia, Australia and New Zealand. In addition, he is a member of the United Nations Secretary-General’s Task Force on Digital Financing of the Sustainable Development Goals, Singapore’s Advisory Council on the Ethical Use of AI and Data, and the McKinsey Advisory Council.
Episode release December 12
DBS CEO Piyush Gupta Aims to Lead the Best Bank in the World
Like many successful enterprises, DBS (formerly known as the Development Bank of Singapore) is obsessed with the customer experience. Piyush Gupta says DBS’ mission to be the best bank in the world pays huge dividends for employees, investors and communities.
More than 50 years ago, a small group of people tasked with spearheading the economic and industrial growth of Singapore founded an institution, aptly named the Development Bank of Singapore. The bank was responsible for backing many firsts for the country, including Singapore’s first multi-story shopping mall, and at the time, the world’s tallest hotel. The bank was a place that was accustomed to taking risks to serve a larger purpose, the modernization of Singapore. In the early 2000s, the Development Bank of Singapore changed it’s name to DBS to reflect its growing status as a major player in the international banking world. As a global entity, DBS faced new challenges like the need for digitization, while holding true to its identity. My guest on this episode is the man who led that remarkable change, helping DBS become the first bank to concurrently hold three Global Best Bank awards.
Hi everyone. I’m Ranjay Gulati, a professor of business administration at the Harvard Business School. And this is Deep Purpose, a podcast about courage and commitment in turbulent times. Piyush Gupta was fresh out of management school when he got a job with Citibank in his native India, my home country as well. A decade later, he was sent to Singapore to head Citibank’s operations there. And that’s where our story starts.
I joined Citi straight out of business school. And through my twenties and thirties, like a lot of other young people who joined our organizations, by rising there was professional success. So how do you do the big jobs? How do you get the big promotions? How do you get to be the youngest managing director, that kind of stuff. And then in 2000, I made a choice to try my hand at .com, the first internet revolution. So I went and set up a .com. I went back to India, like many other people that.com turned out to be a dot bomb. It didn’t work. And so seven, eight months down the road, I was really on the horns of a massive dilemma. I didn’t know what to do with my life. I was 40 years old. I had two kids. I had this epiphany along the way. The epiphany was really this, that, you know what, I really enjoy banking. I think I’m good at it. I enjoy it. And I think I know how to make a difference as a banker.
And so I decided to go back to banking, but with a really profound shift in my mental makeup, from looking and striving for professional success, to an agenda of going back to banking because it is something I enjoy and an area in which I could make impact. I do believe I have some strengths. I have the capacity to look around corners a little bit. And I’m a good executor and I have deep domain knowledge. So I figure if we can put all these together, the world is changing, and what people are going to need from finance, financial services, banks is going to change. How they do the banking is going to change. If I can play a role in helping shape that and create impact, that would be the best legacy I can lead for myself. And so I guess that’s really sort of defines my purpose.
I was lucky when I joined DBS. Very early in my career with DBS, I ran a poll with the people who are trying to figure out the same question of what are the soul of the company and what should the soul of the company be? I was really thunder stuck because the number one thing that came back to me from a thousand people was DBS is a company with purpose. Now ,you can imagine this is like 12, 15 years ago, 12, 13 years ago, when purpose was not the buzzword it is today. And for that to come back to me was quite special.
I realized then that DBS had this thing very deeply rooted because it had been formed in the Development Bank in the 60s. It had been formed with the very express intent of helping in the industrialization and development of Singapore. And we talked to the old timers and went back to the archives. It’s quite clear that P&L was not a consideration. For the first 10 years, the only rubric of decision making was, is this good for Singapore or not good for Singapore? So this notion that this sort of platform, which is already deeply immersed in the idea of making a difference and doing real things for real people, jive really well with my mindset and where I was in my own personal journey of trying to make an impact and trying to make a difference.
What do you think are some of the moral dimensions or the ethical challenges leaders, like yours, who are embarked on this digital journey are going to face in the years ahead. And how are you thinking about these challenges, whether it’s privacy, artificial intelligence? And how are you going to kind of muster the courage to tackle some of them? Because it is going to require a lot of kind of courage, if I may say, to really come up with a principled and disciplined stance on some of these issues.
I think the question we have to grapple with is what makes a society, what makes us human beings, what makes us different from machines? What is the right thing to do? And therefore, if you look at hiring today, I’m hiring anthropologists, I’m hiring ethnographers. We are having major philosophical discourses on what is the right thing to do.
Let me give you two or three examples of things that are obvious, but that do bother me. One is just the exclusion nature of technology. By and large, technology is inclusive. The standard line you’ll hear, which is true, is technology brings costs down. And therefore you can bring a lot more people into the financial net. If you look at some of the programs in countries like India and Indonesia, hundreds of millions of people have been brought into the financial net, just because on a mobile phone, you can do things you can’t do otherwise. But there is the other side of it too. Technology can be exclusionary. One of the things that happens is that as you start reducing physical cash, as you start reducing physical branches and you start reducing ATMs, then you will find at the margins, the elderly, the uneducated, the illiterate who might start getting excluded.
DBS Bank’s purpose, a better bank for a better world.
Piyush says banks and other businesses need to be mindful about how they use data. For example, the numbers say that most people want to do their banking online. So why not just close down all the bank branches? Well, that may exclude people living on the margins who can’t or won’t bank digitally. A strong leader needs to know the numbers, but not be ruled by them.
So the challenges of when can information be too much, when can information cause us to rethink how we think of ourselves as a common society with common burdens and common responsibilities? I think that’s a modern dilemma we’re going to have to come to terms with and deal with as we go ahead. You take AI, increasingly AI is doing more and more of the stuff that we do in the human brain. But what makes AI okay and where do you start drawing the line? It’s not easy. All my life, as a banker, I’ve been trained in one premise that I’m trained to make good risk decisions. So the idea is I should not give money to people who will not be able to return money to me. And that’s what our credit people do day and day out, make a judgment on your credit worthiness.
Now, what happens when I take the same process of making a judgment and enshrine it in a set of rules and code and let the machine make those decisions? Now you start getting outcomes that people are not comfortable with. You can get redlining, you can get geographical discrimination, you can get racial discrimination, but that’s because that’s what the data is showing. How do you make the balance between relying on data to make those kinds of decisions, but also recognizing maybe the other softer nuanced and personal elements that we need to be thinking about? So I think over the next decade, these are the kinds of challenges we’re going to face, challenges of privacy, what should I know, what should I not know, challenges of choice, challenges of exclusion. And each of these is a modern dimension.
Very helpful, Piyush. One of the questions, since you mentioned earlier that the purpose of DBS is being the best bank for a better world, and the better world kind of has a ring of stakeholder capitalism in it, which in America is getting tremendous heat from all directions. The one extreme people are saying this is business is doing purpose washing. At the other extreme, you have right wing of people saying that, no, wait a minute. Businesses should focus on shareholders. And this is undemocratic to have a business leader involved in social issues. They should not get distracted. How do you reconcile yourself in this space? Do you think stakeholder capitalism is good for business? Or is it something that is being imposed on you by regulators or investors? How does it play into your calculus as a leader of a prominent bank?
I think we’ve got to recognize that when companies get created, whether they’re a limited labor company or any form of organization, you give life to a legal form, you give life to a legal entity. This legal entity comes with the all kinds of rights and responsibility. The principle right you get is the right to limited liability. So your liability is limited to this entity. It does not carry on to other partners or shareholders. But if you get rights, then I think as a legal entity you also earn responsibilities. And the responsibility is that you have to play a role in society like any other entity would. Whether you’re an individual or any other organization, you have to have stances, you have to points of view on pretty much everything because you’ve been given that form.
The second issue to me is really the issue of agency. To what extent can say as an agent, I really don’t have free will. And the best example of this, everybody knows, it’s come up often, is if you are a German soldier in the second World War, in the army, is it legitimate for you to say, “I’m a soldier I’m doing my duty. It doesn’t matter what the Nazi regime is doing because I’m an agent.” And most people would argue that at some stage, agency [inaudible 00:10:26] breaks down. You need to have personal will and personal responsibility as well. And therefore, again, I believe that as companies, you cannot just rely purely on the fact that I’m an agent of the shareholder. You need to have some will and responsibility. But I think for me, the third and most important argument, which is the most cogent is that at it’s heart, I really don’t see too much conflict between stakeholder, capital and stakeholder value and shareholder value. I think that distinction is only a distinction of timeframes, and this is why.
What happens is most companies eventually survive, not just on a regulatory license or shareholder capital, you rely heavily on a license from civil society. You exist because societies and civil societies think you serve a purpose and want you to exist. If in the long term societies start thinking that you are not necessary or you do not bring value, you will not survive. And therefore, if you want to serve the shareholder interest in the long term, you must consciously recognize that you need a license from civil society for the long term.
And therefore the minute you change the timeframe from a quarterly result to long term results for the shareholders, you start squaring the circle very easily. The only way you can create long term shareholder value is you must be around for the long term. And for you to be around for the long term, you’d better be serving a decent social purpose, otherwise you won’t be around for the long term. So I find it easy to square the circle when I just change the time horizon to 10, 15 and 30 years, as opposed to what happens in the next quarter.
Just to build on that, what about the idea that perhaps serving stakeholders, as we like to call them, or maybe even, I would say, contributors, your employees are concerned about that. They are more motivated to come to work when they buy into an organization. Your customers are more loyal and trust your brand more, right? Your communities start to also value you as a good citizen. Do you think pursuing these goals can actually be profitable for you even in the short run? You see when companies steer away from thinking about these questions, they have employee rebellions, you have customer rebellions. So increasingly you’re seeing a more vocal stance from people around the organization if you are not willing to take some of these positions.
Well, that’s true. And they can be profitable in the short term, but they won’t always be. So let me give you an example, which spreads out the point. We have about five million customers in Singapore. And again, very early on the data was quite revealing. We lose money on half of them, actually more than half. Three million of the five million we lose money on. And that’s because they’re migrant labor. There are people who come into Singapore to do domestic stuff work. There are people in the heartland who don’t earn money, they don’t borrow money. So if I did a P&L on those three million customers, it is quite clear from day one they are loss making. I could have improved the profitability and the ROE of DBS very early on by stopping offering services to larger numbers of these customers. In the short term, there was no way to drive incremental profitability from that.
However, it is also quite clear to me that DBS is DBS because we serve this entire customer base. We’re the people’s bank, we’re the bank of the nation. We benefit from the trust that gives us, we benefit from the brand position we gives us. And frankly, we collectively believe this is the right thing to do. If we’re not going to do this, who’s going to do it? However, it took us a long time to try and convert this three million customer base from being a loss making drag, to at least being breakeven and eventually making some small money on. It’s not obvious. You’ve work at it. Now, you could argue that there’s some other places where the profits show up, but the line of site is not always easy, so you sometimes do have to make trade offs.
Let me ask you then, you have had excellent financial results, so it’s easier for you to talk to your shareholders and your board. How do you sell this idea of a better world to your board and your shareholders? What do you say to them? Hello? We are building a better bank for a better world, best bank for a better world.
That’s a timeframe question. So for me, Ranjay, and I’m sort of fortunate, I have a strong anchor invested. [Tomasic 00:15:08] wants 30% of our shares and [inaudible 00:15:10] takes the long view. I’m also fortunate to be at a point in time when many other shareholders are willing to take the long view, and the fact that you have to price externalities and you have to look 10 years out. But to me, the best way to reconcile the shareholders, take what I said, is to get people reconcile to the view that in the long term, what is good for the shareholder is to make sure that you’re working on things that are good for the country, society, community, employees, et cetera. And if people are convinced that this is a better long term strategy, they will have your back. I found very early that coupled with the purpose, if you sharpen the purpose to customer centricity and customer obsession, that really liberated our people and liberated the capacity to take risks, to be innovative and to make the right decisions.
And as I look back, there’s been the single biggest thing that’s worked for us, really dedicating ourselves to putting the customer at the center of everything we do. And again, it is a bit of a buzzword, but the proof has been that if you relentlessly focus on the customer, it liberates your employees. And the employees wind up responding and behaving in ways that you will not be able to get them to do just by sending them email that telling them you need to do stuff differently. It was a ground up feeling and belief and faith that we could be the best bank in the world. That shift from not even saying we could be the best to now saying we will be the best bank in the world. That belief and faith, I think the roots of that are in being liberated by the customer journey and the customer obsession approach that we took early in the game.
How do you translate that talk into action? How do you get emotional buy-in, people recognizing and allowing that daily actions to be informed by that point of view, that perspective, taking that empathy for the customer, and then putting KPIs around that too? Was it some hard levers, some soft levers? What were kind of markers of that journey?
A large part of this is the signaling. So let me give you an example. A lot of people have done this. Is not rocket science. But I found very early that one of the biggest source of calls into our call center was people wanting to be able to waive fees for various things, typically credit card fees and a whole bunch of stuff. And the way our process worked, we had kids in the front end, kids would been trained two, three months and put on the phones. And they were not given any authority to do make these decisions. So they would sort of tell the person we’d get back to you? They’d go and talk to the bosses. The bosses would talk to the bosses, and so on. And altogether, this whole thing would create a lot of angst in the system.
So early on, when we started thinking about this customer piece, the team got together and we asked the question, so let’s assume we get it all wrong and we give up all the fees and it’s all wrong, how much is it going to cost us? And somebody said maybe four, 5 million bucks. And I said, “Okay, fine. That’s a five million buck check. I’m writing it right now. We will spend the 5 million bucks. Let’s see what it does.” Now, those kind of stories start becoming legendary. People figure you’re not focused on the P&L and the making money in the margin, but you happy to give it up because it makes the right for the customer.
I first met Piyush some years ago. Piyush had just met the Chinese business titan, Jack Ma, head of the massive Chinese technology and retail company, Alibaba. Piyush says the encounter was in epiphany. He realized the old ways of growing a business of turning DBS into a modern digital bank, no longer worked.
That meeting with Jack Ma was actually quite important. And after hearing his vision for what he was going to do with what was then Alipay, it wasn’t even [inaudible 00:19:17], and how he was trying to take this whole agenda of using information and data to revolutionize the nature of finance, it blew me away. And I came back just thinking that as soon as these guys start coming out of China into our neck of the woods, we’re going to be history, unless we fundamentally rethink what does it mean to do banking or financial services? And so we came up with this whole agenda to do a radical transformation. We called it the Making Banking Joyful program. I’m a big believer in change by design, everything. So we really designed for three components of the program. The first was, how do you get to really be a technology company? My CIO, he came up with this great mnemonic called GANDALF. My CIO figured there was Google, Apple, Netflix, LinkedIn, Facebook, Amazon. And it made a very cool GANALF, but it lacked a D. And he says, you know what, DBS should be the D in GANDALF.
Just as an aside, Gandolph is the legendary wizard and the Hobbit and Lord of the Rings stories. Gandolph leads and mentors the other characters along their journey. In the same way DBS started looking outside its own industry for guidance navigating the customer landscape of tomorrow. DBS studied technology companies whose names began with letters in the word Gandolph like Google, Apple, Netflix, Amazon, LinkedIn, and Facebook. And as Piyush noted, this left an opening for DBS to become the letter D in GANDALF, for DBS to serve as a new leader of technology in the banking world.
Now, this is powerful because the idea that our frame of reference needs to be Google, Amazon and LinkedIn, and not JP Morgan, HSBC or [inaudible 00:21:02]. That was a very, very bold step to make. And we had a lot of people, even within the company, who were very doubtful about whether we can be a technology company. To me, however, this idea that in tomorrow’s world, every company is a tech company, became supremely important.
Pillar two was really doubling down on what I’d already started, which was the customer journey idea. And we were quite clear that the tech company, we started with Amazon, I’m struck in our discussions with Amazon, by the learning that Jeff Bezos would not let you talk P&L in a meeting. The only thing he let you talk was customer outcomes. So we figured that we’d have to take our customer journey thinking and customer obsession and instrumentation to yet another level. To do that, we’ve got to train people even more than we’ve trained people. So we started running a bunch of these different kinds of hackathons and training things and outcomes to double down on this customer obsession idea.
And the third pillar was this internal culture change. I’d spent three, four years trying to convert DBS to a multinational culture, meritocratic and so on. I figured that the world of the future has got to change again, and we convert it to a startup culture, which is nimbleness, agility, experimentation, risk taking. That’s a very different kind of culture.
How do you do that, Piyush? How do you get emotional buy-in when the natural human instinct response is fear, right? This is fear, especially this kind of where I don’t have the skills. I’m a banker, not a technologist. I don’t have any technology background. And Piyush is telling me that we’re going to be a technology company.
All of us. And we talked about every one of us has changed in our personal lives. The way we listen to music, read books, call taxis, do our banking, do our tax turn, everything has changed. And we are all 40, 50 and 60 years old. My father is 90 years old. He’s doing everything online. So when all of us could change in our personal lives, then obviously there is no limit to human capacity to change. So what you said is not a function of, can I do it, or is it possible to do? The real challenge is fear, what you correctly said, and the capacity to learn on the job. The difference is we do it, if I take a mobile phone, you’ve got 40 apps you weren’t using three years ago. So if you can do that in your mobile phone, why can’t you do that in your workplace?
And to me, that idea that there is something else going on in the office which prevents you from making the same change, as opposed to your mental capacities, that became really all consuming. We narrowed it down to two things. One is adult learning. So at home, how do you learn? You download an app. Your son, daughter or somebody’s going to come and show you how to use it. You use it a few times. You make a few mistakes and then you figure it out. The problem is in the workspace, nobody’s coming and showing you, nobody’s giving you the capacity to fool around with it and learn, and therefore you never learn. And the second problem is at home, risks are low. So if you can’t figure out something, you find an alternative way to do it. I still remember in the early days of WhatsApp, my mother used to get so frustrated. She’d say, “The WhatsApp didn’t go. It’s a big deal.”
But in the office spaces, it’s a high, your bonus gets impacted, you get criticized, you don’t get promoted, et cetera. So I figured the key things to focus on were these two, how do you make it easy to learn? When we came up, I referred to them earlier, with massive programs, hackathons and that learning kind of thing, where we gave people the chance to experiment and learn. My KPI for the company in 2016 was to run a thousand experiments. And I kicked the tires. Every three months, I go to different parts of the company and say, “Show me what you did that you hadn’t done before. What did you learn from it?” The other thing was this idea of risk taking. We doubled down on giving people elbow room to go ahead and make mistakes.
Again, and we made some moving markers. I didn’t want you to bet the company away. But at the same time, if it cost you some hundreds of thousand dollars or something went wrong, we wound up awarding people for that. We screwed up something somewhere. The regulators came and they asked me to punish the person. I pushed back and said, “Not only am I not going to punish the person, I’m going to give them an award for at least having tried.” And those kind of stories then also go down the system and create a life of their own. That in business, it’s okay to make some mistakes.
And I want to bring this discussion together and bring it back to you. We have all these kind of myths about a leader’s life. It’s lonely at the top. You kind of have to keep your own council. You have to carry the burden of all the issues and decisions in the company. Tell us about your personal journey. How have you grown and evolved as a leader? Who have been kind of the role model leaders that you have kind of drawn inspiration from that have really informed you as a leader today? Tell us about the arc of your own journey and where you are and where you hope to be?
I didn’t used to be a top down leader. I’m quite strategic. I can think long term and I’m very hands on. So the helicopter leadership thing is my thing. I can go up. I go down. I go into the weeds. And therefore my style of leadership has traditionally been quite directive. I figure out what to do, and I get people, I find the people, but I work to get things done. That’s always been the case. And from time to time, you still need to do that. If you’re in a battlefield and a general leading the army, well, you need to lead the army from the front sometimes.
But I’ve also found, and this is the big evolution, that I did not adequately appreciate or understand the power of collaborative and collective leadership. I did not really embrace the notion that culture does beat strategy. Culture eats strategy for breakfast, people have said. And over the years, I have found that to be true. That at the end of the day, there’s only so much you can do as a person. There’s only so much direction you can do. There’s only so much execution you can do. There’s only so much follow up you can do. There’s 24 hours in a day, and it’s finite. Can I inside build a team of six people? There’s only so much we can do. The power comes from energizing and motivating a team of 35,000 people to be able to operate and deliver in and of themselves. When you get to the stage where you can give a thousand [inaudible 00:27:41] bloom, when ideas come from the bottom up, when execution comes from the bottom up, then you really start getting out performance. And that requires a very different leadership style.
It requires a leadership style of collaboration, of trust, of getting people to be able to speak up, of psychological safety, what’s now called a growth mindset. I think these are not just buzzwords. When you start creating these avenues in the company for people to learn from each other, learn from feedback, to be able to grow collectively, and to be able to take decisions, then you get a completely different rhythm. And then you also get much greater longevity. Then you’re not relying on a small team of people who might or might not be there three years from now. Then you’ll build something that is more deeply rooted, which can have a life of its own. I started feeling, we’re getting to that day three, four years ago, five years ago, when I started hearing more about things going on around the company, which was broadly aligned with our vision, but I had no knowledge of. I had never started. I had not this thing. And they were taking birth everywhere. That’s a very different leadership style.
I’m always fascinated by the heroes and mentors that have helped guide and mold business leaders. Where do leaders look for leadership? Piyush told me that one model for him was Lee Kuan Yew. When Singapore gained independence in 1965, Lee became it’s first prime minister. He’s often called the father of his country.
He got a 400 square kilometer rock with nothing, and he created a world class country. He and his team created a world class country, which completely punches way above its weight, global reckoning, green, fantastic standards, non-corrupt, trusted, great financial center in 50 years. How do you do that? Lee’s Kuan Yew’s defining thing was the sense of deep purpose. He was guided by single agenda. How do I do the right thing for this country and the people? And he just went to town with that one agenda.
So I think for me, his intent and his capacity to translate that intent into what has been an extraordinary success, this is one of the greatest stories of the last century. Now, when the caveat, the caveat is this, evolution from directive to collaborative leadership, Lee Kuan Yew is a very directive leader. People are scared of him. And he often said, “I’d rather be feared than loved.” I don’t think that necessarily works in the day and age we’re going to. You would have to moderate a leadership style to be able to get more collaboration impact. And for everything Lee Kuan Yew did, I do think there was some downsides with the model. I think the future would have to embrace the intent that he had, but be able to take a lot more people along.
I spoke with Piyush Gupta of DBS Bank in Singapore. You’ve been listening to Deep Purpose, a podcast about courage and commitment in turbulent times. You can go to my website for more of my conversations with leaders in the business world, navigating the 21st century business environment. You can also find out about my book titled, Deep Purpose. Companies that are serious about establishing and working towards a deep purpose find that it delivers game changing results for the workers, the shareholders, and the larger society. So visit with me at deeppurpose.net. This podcast is produced by Steven Smith with help from Lauren Madelski, Ally Honan, Melissa Duncan, Craig McDonald, and John Bach. Theme music is by [inaudible 00:31:22] Meister. I’m Ranjay Gulati. Thanks for listening.