A conversation with Peter Schlebusch – Senior Banker, Standard Bank

Share:

LM:

Hi Pete, I look forward to our conversation and I know our readers will greatly benefit from your insights, experiences and wisdom? 

PS: 

Thank you Lincoln for affording me the opportunity to engage with you and your readers. Well done on creating this excellent platform and pursuing your passion for building leadership across Africa. I think it is a great initiative. Well done and thank you.

LM:

You took a very unusual decision to take a 4 months sabbatical leave from a high-powered job, what motivated you to take that decision? 

PS: 

I really, really enjoyed my 10 years of leading PBB for Standard Bank Group and achieving most of the objectives we had set for ourselves as a team. I decided, of my own volition, that 10 years was a really good innings.  I did not want to be a glass ceiling in the Group, that might serve to prevent others from taking up similar wonderful opportunities to those I have been so fortunate to enjoy. The decision to step down as CEO and the subsequent appointment of Zweli, provided a unique and wonderful opportunity to take a sabbatical which I have never done before. I thought the sabbatical would serve a twofold purpose.  Firstly, to give Zweli the space to lead the team in his own unique way without having any interference from me. Secondly, to enable me to spend some more time with my family and rejuvenate after a relentless 10 years as CEO, exacerbated by high levels of political and economic volatility and uncertainty.

LM:

What were the key personal highlights of your 4 months break? 

PS: 

Spending more time with my wonderful family and friends, travelling to some fascinating places, and getting myself healthier and fitter – prior to breaking my arm falling off a mountain bike.

LM:

You have had time to reflect on your 10 years as Group CEO, for the Personal and Business Banking Unit of the Standard Bank Group, what are the three things you are most proud of? 

PS: 

Firstly, that we have been able to successfully meet the needs of our growing customer base, now roughly 12m customers, by safely and securely processing billions of transactions every year, safeguarding more than R550bn of Customers Deposits and extending loans now outstanding of greater than R625bn to customers to pursue their dreams and aspirations.  Importantly we have also delivered real returns to shareholders growing PBB Group Headline Earnings by 17% compound annual growth rate over this 10 year period to more than R14bn. Secondly, that we were able to build more convenient, easy to use, digital platforms for customers, supported by our new core banking systems successfully installed in 12 countries, including South Africa. Thirdly, that we were also able to truly transform our PBB leadership to more closely represent our diverse customer base, while strongly improving the skills and capabilities of our people.

LM:

How has Standard Bank managed its succession plan to retain people like you and Ben Kruger whilst moving to promote people like Zweli Manyathi, Kenny Fihla and Sim Tshabalala? 

PS: 

Standard Bank has an actively managed succession plan process which certainly helps. Ultimately, I believe it is up to the leader to ensure their own succession plan and the plan should not be tied to a single successor only. People like Ben and I are passionate about Standard Bank and feel that we can still make a contribution to the Group. We enjoy working with the people here and interacting with our customers so we are happy to stay on, whilst we are hopefully still contributing positively to the Group.

LM:

Will banks survive the onslaught by new players buoyed by new emerging technologies? If so what needs to change for banks to not just survive but compete in this environment? 

PS: 

I do believe that banks will survive and that a smaller number of banks, those that are able to transform, will continue to thrive in this new digital revolution. Banks are continuing to improve their ability to truly understand what matters to their customers using better customer insights gleaned from data. This should enable banks to proactively meet clients needs in an increasingly personalised way, in real time, based on what is contextually relevant to customers. To survive, banks need to not only do continuous innovation and become much more efficient, but will also need to learn how to truly disrupt many parts of their existing business models and profits and replace these with new ways of engaging with customers and getting adequate returns for shareholders.

LM:

How can banks compete against Fintechs and still be heavily regulated for both prudential and market conduct? 

PS:

We must remember that we currently have much better assets than Fintech companies; – we have a great customer base, we know how to do risk and compliance, we have strong balance sheets and transactions franchises that provide great annuity flows.  We have a well known and trusted brand and reputation in the societies we operate in. We are in pole position in the race for continued relevance with customers. I am confident that we should be able to win. But we must become more like a Fintech company ourselves.  This means being obsessed with improving our customer experience and engagements. We need to better use the rich sources of data we have about our clients. We need to use the incredible technology available to us to become more efficient, more convenient, easier to use and more secure for customers. To do this we will need to have a faster cadence of delivering new and exciting capabilities and solutions to our customers and be very wise and discerning in prioritising doing only the things that really matter to customers.

LM:

Should banks see Fintechs as partners or as competitors? 

PS: 

I think that Fintech’s can be great partners for banks, by building new capabilities or solutions for customers that the bank does not yet have. By their very nature Fintech’s are smaller, more agile and nimble than banks and often have really creative solutions that banks can use to test new products or services. An example of this is Standard Bank’s partnership with Snapscan in South Africa that has for many years enabled customers to pay merchants, particularly small merchants, with just a phone and a QR code. I think the very “big tech” companies that have billions of users, like Google, Facebook, Alibaba, TenCent and Amazon and billions of dollars of cash, represent an acute threat to banks over the longer term. But even amongst these “big tech” companies we have found ways to partner and collaborate with them for mutual benefit.

LM:

What cultural changes should large organizations introduce in order to drive digitization, innovation and customer centricity? 

PS: 

Large, typically hierarchical organizations, need to eradicate fear of failure in their organizations.  This fear prevents people in the company from trying new and innovative things. Staff right across the organisation, and especially those interacting constantly with customers, should be empowered to try new things and test better ways of doing things without the fear of failure or losing their jobs. Another cultural dimension to change would be to reduce the number of committees or people that have a right of veto to prevent new ideas being tried. Amazon has done this well; Jeff Bezos has required those individuals who want to kill a new idea to publish an essay of no more than 2 pages on the Amazon intranet as to why the idea is not likely to succeed. This has resulted in more support for many new ideas being tested on a regular basis, enabling better learning and responsiveness – which is something that large organizations are typically not great at.

LM:

South Africa is one of the most unequal countries in the world, should corporates and high net worth individuals play a much bigger role in creating a much more equitable society? 

PS: 

The widening inequality in SA is a massive, massive challenge that requires all our collective wisdom, passion and skills to overcome. I do believe that corporates and individuals should be doing more to create new jobs, supporting relevant education initiatives, encouraging SME development and procurement, training and developing their staff, and ensuring fair pay – especially for junior employees.

LM:

We have seen highly regarded companies such as SAP, Bain, McKinsey, Bell Pottinger, KPMG, Wells Fargo, VW suffer huge reputational damage in huge corporate scandals, how can companies remain competitive and ethical at the same time? 

PS:

The companies that you mention have all suffered massively in their ability to compete as a result of their well publicized corporate scandals brought about by unethical behaviour from key people in their organizations. I believe that customers are becoming increasingly better informed and making wiser choices, which increasingly results in them buying products and services only from ethical companies. I believe that in order just to be competitive in the future, successful companies will have no choice but to be ethical companies. That is why at Standard Bank we constantly enforce our mantra of “doing the right business the right way” to ensure that we are being ethical, that we are improving our competitiveness and hence sustainability.  At an individual level, it is a moral imperative for each of us to behave in an ethical way, and to encourage that behaviour around us, with our families and our communities. If we all pull together in this way we will help to build the society’s that we would want for ourselves and our families in the future.

LM:

You have always argued that corporate life is not a sprint but a marathon, what do you mean by this? 

PS: 

A sprint is so intense and single minded in its focus that it can only be sustained for a very short time. I don’t believe that people joining companies are desirous of a life where their work is all consuming and dominates their life, such that their ability to be a good partner, mother, father, friend etc is severly compromised. I am trying to encourage people through this analogy to take charge of their own life, to use their locus of control, to ensure that the overall cadence or rhythm in their corporate life is sensible, fulfilling and thus sustainable. Essentially, if you don’t look after yourself and pace yourself wisely, it is unlikely that someone else will do this for you.

LM:

How have you remained grounded in spite of your status as a CEO of the largest business unit in the biggest bank in Africa? 

PS:

The role that I have had as PBB CEO is not personal to me at all. I am merely fortunate to be given the opportunity to have done this role as a steward of the bank to try to balance the interests of all our stakeholders. I am there primarily to serve our customers, our people, and shareholders. The banks results, its size and stature are due to the magnificent work of all our people over many, many generations. We are fortunate to stand on the shoulders of all those who came before us and contributed to making Standard Bank the great company that it is today. I believe an antidote to hubris or arrogance is to constantly compare ourselves to the best in class, and by this I don’t just mean banks, but also across other industries and across other geographies. Such a comparison is really humbling and reminds us that we still have so much work to do to build the bank that we want to be for all our stakeholders. The continuous improvement required never stops. On a personal level I do hope that my Christian faith has kept me grounded. Eternal life is so much longer than our brief time on earth.

LM:

You have always been passionate about Africa, what gives you confidence about the continent in spite of all the challenges it faces? 

PS: 

I believe that Africa has a wonderful opportunity to use the myriad new technologies to leapfrog many of our existing antiquated systems and infrastructure. An example of this is in mobile telephony leapfrogging fixed line networks. Aligned to this is smartphones in the hands of more than 300m people in Africa often leapfrogging the need for a PC. I think that Africa will see emerging technologies similarly leapfrogging in other industries such as agriculture, education, healthcare, and manufacturing. I am cautiously optimistic that this century will be the African century. But it is up to each one of us who call Africa home to make sure that this becomes our reality.  We need to celebrate our diversity as a country and a continent, and keep focussing on what unites us – to each other, to this great country and to this inspiring continent.

LM:

Do we not face the danger that the emerging technologies of the Fourth Industrial Revolution won’t create a greater digital divide and unemployment? 

PS: 

We definitely do face the dangers you describe. I guess only time will answer these anxieties decisively. It is instructive to see that in the 3 “revolutions” that have preceded the Fourth Industrial Revolution, namely mechanization and steam power, mass production and electricity, and computer and automation; everyone has been really concerned about job losses and the impact of these technologies on society. It is safe to say that these technologies have spawned many new industries, created many more jobs and left the world better off economically. I am optimistic that this may well happen again in Africa, particularly if there is decisive leadership in key areas, for example relevant education, and we can move quickly to improve broadband connectivity and reduce the cost of data. I do worry however that sustained high costs of data and initially new technologies, may serve to further exacerbate the existing economic divide.

LM:

How do we embrace millennials in the workplace? What will need to change with our culture to ensure millennials succeed and thrive? 

PS: 

I think millennials is too broad a definition to be really useful as it refers to too broad a range of people; typically those ranging from 22 to 37 years old which is not a homogeneous group. I think the real challenge is making sure that we understand what drives new joiners and people in their 20’s who are really digital first or digital only. I think what is important here is to ensure that this group has a credible voice in the business and at the leadership table. As leaders I think it is really important that all of us have some form of reverse mentoring relationship with young people in the Group so that young people can mentor us and that we can learn from them. We should engage the youth to understand their world better, the brands they are buying, what they are anxious about, what motivates them and how they think about the future.  We must recognize that this group of young people, whether staff or customers, is absolutely crucial to our success and give them the focus they deserve. I think we need to be more bold in placing exceptional young people into positions of leadership so that they may influence their organisations positively. Just think of how we ourselves have been promoted into leadership roles and given opportunities, when we were not yet properly ready.

LM:

How have you kept true to your faith and spirituality? 

PS: 

My faith is an integral part of who I am and what I believe in. I am exceedingly grateful for Gods amazing grace as well as the opportunities and skills that God has blessed me with. It is very important to me to have a fulfilling and meaningful spiritual dimension to my life. Accordingly, I have tried hard, although I have invariably failed, to live a life consistent with what I believe in and to practice spiritual disciplines to help my faith to grow.

LM:

Transformation is one of the most serious challenges facing South African corporates, how have you managed to drive it in a sensible, sensitive and deliberate manner over the last 10 years? 

PS: 

The starting point was an unequivocal acceptance by everyone that where we were in terms of diversity of our staff, particularly the lack of diversity at a senior leadership level, was simply not acceptable or good enough. We had many, many candid sessions, both in diverse groups and privately one on one, to discuss our individual history, our fears, dreams, hopes and aspirations. We also ventilated numerous unconscious bias.  These engagements helped us to ensure a better understanding of one another and helped to create a shared purpose regarding not just the importance and necessity of a diverse leadership team, but most importantly a sense of belonging and of being appreciated. We have confidence that the Standard Bank we are building is an exciting one that each of us can be proud of and want to be a part of. We ensured that we had measurable diversity targets which were discussed monthly, everyone knew that they were important and ultimately impacted our remuneration in some way. We have made excellent and pleasing progress regarding diversity of leadership. But we still have much to do so that each person feels welcome and believes they can have a bright future at the Group.

LM:

You are a member of the Board in a number of countries, how important is corporate governance in the light of the failures of African Bank, Regal Bank, Saambou bank and now VBS bank? 

PS: 

Bank failures have a devastating effect on the public and companies through the loss of hard earned savings and deposits and confidence in banks. Typically, a feature of bank failures is weak governance and often unethical behaviour, manifested in inappropriate risk appetite and conduct failures. The board is the ultimate custodian of good corporate governance and has an absolutely critical role in ensuring good corporate governance in overseeing the activities, conduct, ethics, performance and risk appetite of a bank. I believe good corporate governance is crucial in making our banks more resilient, more purposeful and more sustainable.

LM:

Your Family has always been a key part of your success, how have you kept that balance? 

PS: 

I have been really blessed to have a wonderful, close, and supportive family without whose help i would not have been able to succeed. I have endeavoured over the course of each year to try and balance the demands of work with the demands of family life, especially with 3 very busy and wonderful kids. Clearly there are times, with extended business travel, overseas investor meetings, key project delivery times etc when you are at home much less than normal and pretty absent. I have found Skype calls with regular communication and encouragement to still be good family time. I have tried to balance these busy times by taking all of my annual leave over the year for regular family holidays and creating special memories as a family. It is also crucial to know what is really important to each one of your family and make sure that, if possible, you can be there for them at times that are important to each of them and to try to make these times extra special, whether it is a soccer match, ballet, or a birthday. Ultimately I guess loving one another deeply, being committed to each other’s well being and trying to put the needs of others above your own, does tend to smooth over a lot of the inevitable difficult times and challenges that occur in any family’s life.

LM:

What advice would you give to young people entering the banking profession? 

PS: 

Banking is a wonderful profession with a very steep learning curve and is the backbone of any well functioning economy. I would suggest that young people entering the banking profession should be willing to work hard in order to learn as much as they can about this fascinating industry. Always be curious, searching for new insights, wisdom and understanding. Learning is a lifetime endeavour. It really is a big help if you can work for a manager from whom you can learn a lot, who you respect and who is genuinely interested in you as an individual, who encourages you and helps to develop your career. In return, make sure that you are trustworthy, responsible, proactive, staying abreast of new developments and delivering your very best work each and every day. I think it is going to be increasingly important to be able to work in multidisciplined teams, so the ability to get along with other people and be a great team player is crucial too.  Success is much more about doing the right things every day for a long, long time, than it is about a single once off big event or stroke of luck.

LM:

What is your focus in your new role? 

PS:

My new role has 2 key parts. Firstly, I will continue to Chair the Standard Bank Offshore Group (which are the Wealth and Investments businesses in Jersey and Isle of Man), and I will be on a few Standard Bank subsidiary country boards such as Namibia, and Kenya for now, with probably some more countries in the future. Secondly, I will be working with PBB, CIB and Wealth & Investments teams to try to improve some of our key customers’ experiences, grow our share of wallet on a number of key client relationships and help to get new to bank clients. This is an exciting opportunity that I look forward to in this new phase after 17 very, very happy years with Standard Bank.

LM:

Thank you so much Pete, you have generously shared your wisdom and insights, I am sure my readers will enjoy your perspectives 

PS:

It is such a pleasure to have this conversation with you Lincoln. Thank you. I hope that there are some valuable insights for your readers.

Share: