Why David Conner of OCBC Bank should not have been a CEO
At the airport lounge in KL last Saturday, I ran into David Phil.. Conner, the CEO of OCBC and his colleague. He was such a cold fish in that encounter that it triggered in my mind all the reasons why he is probably a very poor CEO.
Actually, it was Andrew Lee, his head of retail who saw me first seated in the lounge as they entered. Andrew came around to say “hi” and then intimated that he was with his boss. I looked around, saw David, and went around to say hello to him out of courtesy. Without going into the details, I think it reflects very poorly on a man who is not able to even be courteous when someone comes around to say hello. I thought that the days when bank CEOs looked down at everybody around them benignly as if they were coming to borrow money was over, but not for David. He probably still lives in an era that does not exist anymore.
David does not realise that I actually know him better than he realises. I am a bloody journalist for goodness sake. I am a nosey parker, listening to gossips and reconstructing realities from little bits of information garnered from different people. Just as an indication as to how mercenary I am for information, I was so irritated by his conduct at the airport lounge that as I was checking in, I asked the ground staff for more information on his Solitaire status with Singapore Airlines and they gave it to me without realising why I wanted to know. Let’s just say that unlike the other two Singaporean bank CEOs, whom this airline recognises as a who’s-who in Singapore, David is plain Solitaire and not marked as “VVIP” on the airline.
From all accounts of David from his staff, he is better at managing his different business lines like an accountant, pouring over the numbers and holding his senior managers to account for them. In that regard, to be fair to him, he makes a very good CFO, but arguably not enough to be a good CEO. Talk to any of his senior managers, and they will tell you that internally, he is a good CEO, leaving the managers to do their respective jobs. YY Chin, who has now left, had nice things to say about him because David basically left him alone. In fact, in the case of YY, he managed upwards, giving David all the numbers he needed, while the growth in the retail business in all the time that YY was there, was either flat or not profitable. (YY argued to me that he was building infrastructure. Okay lah! The numbers did actually start showing up after he left, so we will leave it at that.)
Then look at David in public. His monumental failure was in selling the Great Eastern merger story to investors. The idea was not a bad one, and professionally, I would have supported it, but only because I thought there was some vision in there. But quite obviously David was trying to sell it as a numbers proposition, larger asset size, stronger contribution to bottomline. The vision thing was the wealth management play, and investment into the future of where financial services was heading! He needed to live it, breathe it and his enthusiasm should have rubbed off on his investors through analyst reports and the media. Nobody stood in his way, and yet he failed.
I am not talking about populist charm here. Actually, populist charm, the kind that some senior people have a propensity for, can be quite sleazy. The nice thing about our markets these days is that they are savvy enough to know the real guys from the imposters. The real and straightforward guys may even be awkward or shy about holding a view in public, but it is there, the public can see it. In the US, David should have been sacked for not being able to take the organisation to the next level through such a benign initiative as the GE merger. But here, his contract was renewed by a board made up of mostly retired individuals. This bank seriously needs what the technology people call a discontinuous transformation if it is to break away from its old mould.
I recall when I first met Khunying Jada of Siam Commercial Bank after she was appointed CEO of Siam Commercial Bank, she was actually quite uncomfortable with the role, because it cast her as first amongst equals in a very competent, and might I add, a “very Thai”, management team. The bank was still struggling out of its Siam Cement loans. Really bad times. She gave me a small passport photograph of herself after our introductory interview which I told her flatly that we could not use in our publication. In the end, she absolutely refused to budge and insisted we use that terrible picture of herself. In the end we did (it is in a 2002 or 2003 issue of the Journal). But her steely leadership shone right through even then. It was very obvious to me that she was determined to give it her best shot as CEO, even if some elements of the job were not natural to her. Now that she is in the process of handing over to Khun Kanika, all of us can see what an outstanding job she has done (under the guidance of Dr Vichit at the board level, of course).
Now, if David wants to tell me that he is actually a very nice guy and that my chance encounter with him at KL airport was an aberration, I’d say, sorry, I don’t think so. People are who they are, even if they just got out of bed.
Having said all this, we did narrow down the best CEO for 2005 in our inaugural leadership awards (leadership is a theme I follow very closely) to David for Singapore. We were of the opinion that several years of hard work had paid off for OCBC and that he was turning the organisation around because there was modest profitability from the organic side of the business instead of the usual “extraordinary gain” that we have come to expect from OCBC Bank. The bank CEOs from 18 of the 24 countries in the region turned up for the awards. Two of the really heavy weight bank CEOs who really could not come sent in a video clipping that we played during the ceremonies, and all the rest sent a contingent of 5-10 people to attend the ceremonies even though we had a rule that they must pick it up in person or not at all.
You know what this “dxxkhxxd” did? He wanted to send his PR girl, Koh Ching Ching, to pick up the award for him. Now, Ching Ching is a very nice girl, and I like her a lot, but she was hardly the heavyweight to represent the CEO in absentia. We had a ruling of come to get it, or forget it. He did not even bother to write to say thanks. David Conner might think that awards are marketing gimmicks, but when an organisation like The Asian Banker spends about five months deciding on the winner through several surveys, annual results, phone calls with extremely eminent judges from outside of Asia, and thousands of dollars of its OWN money in research and print collaterals even before the winners turn up, arrogance like this can only be called conduct unbecoming of a CEO who should be careful about impressions in the marketplace.
Now, having said all this, I figured later that when a CEO behaves like this, it is an indication of a latent insecurity. He probably thought that he did not deserve the award. Fair enough. Then we will take a different look at your numbers next year, Mr Conner. Even then, there is a courtesy at the human level that is so important that he missed out on.
Why is my perception of David or any other CEO important? Because a CEO is the salesman of the company, the face of the organisation. 50% of a CEOs role is internal controls, number crunching and internal mobilisation and the other equally large 50% is marketing, scanning the radar for external factors and influencers and always knowing that it is HE who is under scrutiny. I think that journalists, analysts and writers should be prepared go for the jugular of any bank CEO (especially in the benign media environment of Singapore) who thinks or who would like to behave as if he is above scrutiny.
My assessment is that this man probably can’t tell a story, can’t rally his troops around a cause in a way that makes the market excited. (I have a long term mantra that “a CEO who can’t tell a story probably does not have a story to tell”.) That’s 50% of the skills required to be a good CEO. From the stories of the different senior people who have worked with David, he probably has the other 50%. He manages by numbers. Not so much by scenarios, from the people who have been frustrated by his inability to consider new and bold ideas and who have since left the bank. Well, having listed what I think of his skills, I would say that he qualifies to be a damn good CFO, but certainly not a CEO.
Businesses today move forward not on the basis of numbers, but on the basis of perception. No matter how much you want to believe otherwise, numbers tell us where a business was yesterday, not tomorrow! So, my sense tells me that even as David manages his entire organisation based on hard numbers, it is actually he who is being managed backwards by his managers by the numbers he wants to see, and not the other way around. No wonder OCBC is such a nice organisation to work in. The tacit quid pro quo is already established! It is not going anywhere in a hurry. It is difficult for someone who is not a man of vision to see the effect of his. He is a gatekeeper!
I know that these are very hard things to say, but honestly, if he is a nice gatekeeper, I would probably leave him alone. Business is not an end all in life, and people and organisations should generally be left to deal with their own limitations (unless you are an investor and looking for returns). But when people choose to hide behind arrogance, as I believe David does, I think they have to be reminded of their feet of clay.
I know that the newspapers do not analyse CEOs rudely enough as they should be, and some of the things I say here in a blog would be restated differently in a business newspaper. But the elements are the same. I am writing this blog now on a flight from HK to Singapore, and I met with Mike Smith Asia Pacific CEO of HSBC, William Ryback, the deputy CEO of the HKMA, several minor CEOs (ie CEOs of foreign banks in HK who would under other circumstances would really be senior managers) and had breakfast with Lazaros Campos, the global banking head of SWIFT (who is usually based in Brussels, or like me, on a plane). The interesting thing about HK is that even the minor CEOs know how to sell their ideas. (The transcripts of some of these which were interviews will be up on theasianbanker.com in the next few days).
My every encounter with the better CEOs in the region have always been a two way street. I used to be very critical of Jack(son Tai) of DBS, because his was a case of a (real) CFO becoming a CEO, and with his investment banker’s background, he used to be very “pally” with the analyst community better than he was with the journalist community in his early years as CEO.
In fact, some of his earlier initiatives were so very nicely factored into analyst reports as early as six months before the newspapers figured them out, that I was of the opinion that these bordered on selective hinting of information, which in the US is now illegal. I think he changed over time.
I also used to criticise Jack because I called him the “Powerpoint CEO”. He loved anything he could explain away on a powerpoint slide, whether at an annual report meeting or internally with his managers. I would attend one or two DBS annual result announcements and it was so clear to me that he had not internalised some of the very operational numbers he was talking about (“…as our chief technology officer, Rajan Raju, has committed to me…” gimme a break!).
I saw him taking a while to internalise that numbers are not met on the strength of a pwoerpoint slide, but on execution skills, but once he did, he even started talking differently.
But the interesting thing about Jack is that he rolled up his sleeves, and learnt how to support his business lines. Maybe he always had it in him to be helpful, but he was particularly hard on his managers when he first took office.
Arrogant CEOs who begin to understand their field commanders, strangely enough, begin to also have regard for our work at The Asian Banker because we tango with them at exactly that level.
Today, on a bad day Jack has no problems shooting off an email or calling me (and I am sure he does others as well) on the mobile phone to scold me personally if we published something he disliked. I have no problems with that! We do our job and you do yours and somewhere in between us is the truth.
I think that Jack is supremely arrogant as any good CEO should be, and he is NOT necessarily my friend, but the defining character is his ability to engage with anyone, even with a little puppy dog, on the substance of his business. That dimension about him is fully developed and that is all that is required from any decent CEO of a publicly owned institution.
The gold standard, in this regard, should really be Jiang Jianqing, the chairman of ICBC China, the leader I now call the “$25 billion man”, for having led his bank through the largest IPO in the world.
If anybody stopped to wonder how is it that the bank with the world’s largest NPL problems also raised the world’s largest IPO capital, it is definitely because of the work done by this man over the past five years.
I first met Mr Jiang when he accepted my invitation to speak at The Asian Banker Summit in 2002 in Singapore. I did not realise it then, but for a Chinese bank chairman to come to Southeast Asia at that time was unusual.
It has now become clearer to me that he has been working the field all these years, cultivating a pool of influencers in the marketplace in preparation for taking his bank public (the intention was already stated then).
After his speech, he asked for lunch with me, and although I was moderating the next session at the conference, I squeezed in time to lunch with him and we got along very well.
After that, I would ask and he would oblige for me to meet with him, and we have been meeting at his offices at least once a year every year.
A few months or maybe a year after I first met him, I ran into him on a flight from Jakarta to Singapore. We were both in the first class cabin but seated at different ends. (I did wonder then why he was in Jakarta and his history with that country now goes far deeper than we realise, but that is another story).
After the flight, we walked together past the immigration and the baggage area and outside where he was met by the ICBC office people in Singapore. He had a long entourage with him, befitting the chairman of the largest bank in China who is also accorded diplomatic status because of his ministerial standing.
All along that walk, he wasted no time in influencing my perception of his bank. He was citing numbers off the top of his head, and answering even the slightest criticism I offered based on market sentiments at that time.
I am sure that Mr Jiang cultivated a host of influencers around the world in the same manner. But that was five years of hard work, globally, so that when the time came for his bank to be offered to the market, the sentiments of almost the entire influencers community was on his side.
This to me is the gold standard of a man who is a leader, working to manage the perceptions of all those who matter systematically, so that when it came to the day of reckoning, the entire market is on his side. Again, I am not saying that Mr Jiang is not without his faults, but in managing perceptions, he certainly was nobody’s fool.
If on a scale of 1-10, Mr Jiang stands at 11, Jack would be a six, Khunying Jada would be a five and Mr Conner is living on borrowed time.