During Standard Chartered's turnaround, CEO Bill Winters made regulators his top priority, even at the short-term expense of shareholders. He argues this is a non-negotiable survival tactic, as regulators are the ones who grant a bank its fundamental license to operate.
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Bill Winters embraces a leadership style that keeps many options open, which some criticize as indecisiveness. He views it as a strength, allowing him to make a decision only when it's the right time to 'exercise, sell, or shut down that option.'
Warren Buffett's sterling reputation is a tangible asset that grants him a unique advantage. It allowed him to save Solomon Brothers from regulatory collapse and secure exclusive, highly favorable deals during the financial crisis—opportunities unavailable to anyone else, regardless of their capital.
According to PIMCO's CIO, post-crisis regulation heavily targets the last failure point (e.g., banks and consumer lending post-GFC). This makes previously regulated sectors safer while risk migrates to areas that escaped scrutiny, like today's non-financial corporate credit market.
During a major crisis, a leader cannot rely on team consensus because everyone is still aligned with the old, now-invalid strategy. The CEO must dictate the new direction and be willing to be inconsistent to reset the organization quickly.
When facing government pressure for deals that border on state capitalism, a single CEO gains little by taking a principled stand. Resisting alone will likely lead to their company being punished while competitors comply. The pragmatic move is to play along to ensure long-term survival, despite potential negative effects for the broader economy.
Bill Winters credits his success to taking calculated risks at key career junctures, like leaving a comfortable job for a struggling bank. He advises young professionals to choose the 'reckless route' when faced with a fork in the road, as recovering from failure is easiest early in one's career.
Bill Winters reveals his biggest error in turning around the bank was aggressively cutting risk. He failed to realize the team's risk appetite had already collapsed, so his actions deepened their paralysis and slowed the eventual recovery, making it harder to restart growth.
When communicating with shareholders during a crisis, Bill Winters didn't just present a plan. He explained why he, as an outsider with a comfortable life, chose the challenging CEO role. This demonstrated personal conviction in the bank's underlying value, building credibility beyond spreadsheets.
While fast-moving, unregulated competitors like FTX garner hype, a deliberate, compliance-first approach builds a more resilient and defensible business in sectors like finance. This unsexy path is the key to building a lasting, mainstream company with a strong regulatory moat.
Despite most activity being in Asia, Standard Chartered remains headquartered in the UK. The CEO explains this provides access to sophisticated regulators for their complex business and avoids having to 'choose sides' between its largest competing hubs like Hong Kong and Singapore.