A Case study on Aditya Puri: A Pioneer on leadership, institution building and change management.

“A brand can’t be built by a CEO. The brand has to be built by everybody in the institution, understanding and creating an excellent product which has top-of-mind recall, followed by transparent dealings by everybody, every day, at every touch point.”

 - Aditya Puri

While heading a foreign bank's operations in Malaysia in the early 1990s, Mr. Aditya Puri got an offer from Deepak Parekh of mortgage major HDFC to come back to India to start a bank in an economy which had shifted gears with liberalization moves.

When Mr. Puri joined at that time, Public sector banks were controlling 90% of businesses of India’s financial system. To break the monopoly and introduce competition, government had sanctioned few private banking licenses.

Mr. Puri identified the strengths of both Public sector banks and foreign banks. Public sector banks had the brand, distribution and deposits. The foreign banks excelled in product, service and talent. 

Mr. Aditya Puri quoted, “If we can bring these two together in an institution and take advantage of changing telecommunications, then we should be able to come up with an institution that can be world class in terms of standards, whether it is in profitability, governance, or satisfaction for employees.” 

Leaving behind the luxe life and dapper suits of foreign banks, Puri and his team at the upstart venture shared fizz drinks, wore a footwear brand popular among the middle class, shared a rat-infested space in a yet-to-be gentrified work space to plan and execute it.

It started as a corporate-lending focused institution, but by changes happening in the economy shifted focus to the retail segment for both advances, and low-cost deposits courtesy corporate salary accounts.

The key to the entire operation was service. The well-heeled, well-travelled and exposed to global best customers were willing to pay a price for it.

The team expanded at a frenetic pace, loan books doubled every leap year and in a record of sorts, the bank's profits grew 30 per cent every quarter for a decade. When the profit growth fell in 2014, never to recover back to the higher levels, Puri had a ready explanation: the bottom line is a reflection of the economic conditions…

What it takes for a Leader to be an Institution Builder??

Mr. Aditya Puri sets an excellent example of how a Leader can be an Institution leader in itself!!

Quoting Mr. Puri - The builder of an institution has to understand what he wants to build. Once he knows that, he has to get the team together that will build that institution. And automatically then, you don’t become a CEO—you become a first among equals, the objective being to build the institution. Then you have to clearly define the parameters within which that institution will be built, i.e., its culture, what business it is going to do, what will it do for society, what kind of place it’s going to be to work in.

Once the team came together and we all believed in the idea, we said if the institution is to be long term, we must clearly define what the brand stands for. After all, the brand is the personality of the corporation. So, it must have trust, integrity, and transparency as overriding values. Then, to be successful in business we must be customer-focused. We must provide the best product and service that we can through cutting-edge technology. We must be a happy place for people to work in, because you can’t do this alone. We must be clear on our corporate governance standards, and clear that we have to be good members of society in terms of giving back to it, looking after the environment, and ensuring sustainability. Then we decided on the target market. Since we are in a fiduciary capacity, deposits must be returned. We needed to be very clear what our pricing was going to be. The pricing must cover us for expenses and the probability of default, because in banking some amount of non-performing assets is a part of the business. And, then, we must give a return to shareholders.

So we had the organisation structure, we defined the technology, and then we said we must execute to perfection. People must be empowered, and only then will they get the motivation. So, this is how we built it, step by step.

Moral of the story: Once the foundation is strong, you can Huff, you can Puff, No matter what we will not be blow away

Aditya Puri shared HDFC Bank's secret: Reasons why the largest private sector lender has successfully ducked any impact from the volley of frauds that hit India Inc. in the last decade and spared none of its peers.

The mantra was simple, but hard to implement in an economy still criticised for its cronyism: friendship and banking are not correlated, and good friends representing bad business risk get nothing more than a coffee.

The remarks, made in the context of how he avoided lending to fugitive offenders Vijay Mallya and Nirav Modi, speak volumes about how the outspoken and witty banker born in Gurdaspur, Punjab, built a formidable institution from scratch over a 25-year journey that has no parallel in India.

Source: https://www.fortuneindia.com/people/the-conversation-aditya-puri/104956