Transcription
I was definitely ruthless about killing the complexity and the drag in the back. There is massive potential in this bank. Some of it needed to be unleashed. Things don't become complex by design. They end up becoming complex by lack of focus. You wanted, you needed, we needed to be agile. So bringing the focus and the simplification will allow you to start dealing with it.
I'm Francine Lacqua and this is Leaders, the podcast that explores what drives the world's most influential minds. Joining me this week is Georges Elhedery, the chief executive of HSBC, one of the world's biggest banks. He's been in the top job since September of 2024 and not shied away from difficult decisions, including a huge restructure, slashing thousands of jobs. While some might consider his methods ruthless, HSBC's share price has responded positively. It's roughly doubled to a record high since Elhedery took over. And after an eventful first year, I wanted to catch up with him and dig into those management decisions, understand how he's evolved as a leader, and hear how he's thinking about it. Georges, thank you so much for speaking to us.
Great to be with you, Francine. We were counting how many languages you spoke. Eight. So I've studied eight languages. Other people should judge if I speak them. Do you have a love for languages? I'm fascinated by languages, because if you're fascinated by cultures, then you're fascinated by understanding how they think and how they express themselves. And that basically, naturally links you to understanding their language. Can you only be a good leader if you understand people? I think you have to definitely listen. And if you can listen and in their own language, then even better.
You grew up in Lebanon. Yes. And what was your early childhood like? So I grew up in Lebanon. I have at age 18, I moved to France for my university. I then picked an internship in Germany, and by coincidence, I ended up doing an internship in banking. So I went back to Paris to finish my postgraduate degree in finance, statistics and economics, because I enjoyed it, of course. And I picked up my first job in Japan and then back to London at that time, up until the time where HSBC hired me. And that was exactly ten years ago. At the time, you wanted to be an engineer, so what attracted you to finance? So I absolutely wanted to be an engineer. I studied as an engineer. And as you know, back to your question about languages, I had studied German for about 10 to 12 years at that time, so I went to do an internship in Germany. The only internship I managed to land was an internship on the trading floor in Frankfurt. So I took it and then I got addicted to it. What did you like about it? I like the pace. I like the style. You know, at that time, remember, there's a lot of financial engineering, so you're still using a lot of your engineering skills. You know, it still happens, right? And all sorts of you know, it's highly transferable to finance. I liked the accountability. I like the early responsibility you can get. So this is where it started.
Did you always want to be a leader? Were your leader as a child? It's difficult to define what a leader is, especially leader child. If it's a matter of living up with high standards and high values and and high integrity and being able to project that around you, then yes, that started very early with me. But there are certain traits in leadership that really resonate with me. The first one is you lead by example, you walk the talk, you demonstrate that things apply to you as they would apply to anybody else that you expect them to be applied to. And you don't ever make an exception for yourself. When you look at leadership, how does I guess the young formative years, you know, give you a sense of who you will become? You learn and you feel what is right and what is not right. And a number of people around you, including my direct family, my parents, you know, kind of formed part of how you think and what ethical standards you set yourself and the integrity by which you operate. And then sometimes around you, you feel things aren't right or unfair. And it's very important to stand your line, to hold your line. That's difficult. How do you do that? It is difficult. Discipline. It's very important to hold the discipline and it's very important to think of yourself as your own brand. If you want your own brand to remain the brand of integrity, then it's very important you stick to it. I've heard I mean, some chief executives see it as you know, they decided from very early on who they did not want to be. Is it? Is it choosing who you do not want to be or who you want to be? What's easiest? I think both go hand in hand. It's very important to realize who you want to be. And by competition, realize also what are the traits you absolutely do not, you know, do not appreciate, do not regard, and therefore that you want to stay away from.
Talk to me about your I guess, your your favorite pre-CEO job at HSBC. Do you have, you know, a place in the world where you really kind of had to hone in on your leadership skills and understand the culture? I've spent ten years at HSBC now. And there isn't a single geography on the planet where I spent that long. So there is a sense of belonging for me to HSBC that that supersedes any kind of physical attachment to any place. I mean, with HSBC, I've been I don't know if I can count now, however many dozens and dozens and dozens of times, probably hundreds to places like Hong Kong. You know, one of the two HSBC home markets, the Middle East, where I spent many years for HSBC, specifically in Dubai, but also roving around the whole of the Middle East. Europe, of course, the U.S., the Asia, you know, as a whole. It's it's just amazing the opportunities you have to get there. And every time you're there, you spend time, you create more connections. You have an even deeper understanding. I mean, if I ask I bring ten people in a room and I ask them how many geographies they worked for, for HSBC. You would find people who tell you more than ten. That kind of experience, frankly, is unique. But if you look at, for example, some of the Wall Street banks are more cutthroat, but they pay their people a lot more. Is that something that you worry about? I mean, it's very important that we will reward our people fairly. We reward our people competitively and we reward performance. But that's not the only component. The other component is what is the environment in which they operate? Who are their colleagues, their bosses? What is their purpose? Who are they serving? Why they're serving them? Can they be their true selves? Can they operate with the highest integrity standards as they wish to? All of that kind of formed part of the value proposition HSBC offers its employees. And this is what makes the kind of equation collectively work for all our colleagues.
Everybody has to make decisions big or small, but not everyone runs a bank with 200,000 employees. When Elhedery took over as CEO, he really wasted no time making his mark, ushering in a big restructure and laying off thousands of people. So I was curious to understand how he thinks about company wide challenges and what gave him the courage to move so fast and so decisively. So talk to me about when you get the call that you've, you know, been appointed chief executive. What's your first thought? Of course, the first thought is to be humbled and honored for being given this fantastic responsibility. But what really mattered for me is what I can do for this bank, not who I was or what my title was. And this bank. Now it's so happens, There's a lot you can do as a group CEO in terms of effecting change or affecting, you know, the put me in the bringing potential to the bank. So it was it was therefore the great kind of opportunity for me to be able to do what I really set out to do and what I had the full support of the board to do. But you moved fast, right? You got appointed and then you actually said, Did does a chief executive need to move fast to kind of say, right, this is the change and this is what we need to be on? Is it all on you or did you governed by consensus?
So a few things on that. The first one is there is massive potential in this bank. Some of it needed to be unleashed. It needed to be unlocked. And some of that unlocking of the potential had to go through re-engineering of certain of our aspects. So re-engineering the bank, rewiring the bank so that we can unlock this potential. Then having been the bank ten years operating in a number of geographies and businesses and functions, myself, I've built a lot of experience and a very large network of colleagues who have been also feeding their input and their concerns, which kind of forms a big set of kind of action book, if you will. And then third, very importantly, I was already sitting at the board as a group CFO before I took the CEO role. And all these conversations I was having with with my board. And if you have the support of the board, you, of course, you know, have the kind of right to be able to act with you. But what was the most difficult thing about that first restructuring plan? Because you have to get rid of units that maybe you were attached to having worked here for so long. There's, you know, people that you like that maybe you've had to move around. Again, was it intellectual or, you know, are you ruthless about it? I was definitely ruthless about killing the complexity and the drag in the back. The most difficult part is when you have to separate with some of your colleagues. I think we've been very thoughtful. We've been very considerate. We've done it hopefully the right way and the most respectful way for the benefit ultimately of the firm and its customers. You want it. You need it. We need it to be agile. We needed to be, you know, to be ready for the modern world and to be that we needed to be simple and therefore, you know, kind of everything then drives what decisions you take from the from that mission statement.
How did the bank become so complex? And again, this is something that actually most organisations have to face as they grow. I guess there's, you know, various factions or a lot of companies actually could just become much more simple and simplified. What did you see? Entropy is a feature. Entropy tends to increase, which means complexity. If you do nothing about it tends to increase rather than decrease. So things don't become complex by design, they end up becoming complex by lack of focus. So bringing the focus and the simplification will allow you to start dealing with it. That's the first observation. Second observation. You have to be extremely methodical. What has created the complexity? How can it be addressed methodically? Try to identify ways to be simple. Some of the ways to be simple is to decide not to do certain things. And this is why we exited the number of activities. The third thing is when you are taking structured decisions, you have to start from the top down. You can't take structured decisions from the bottoms up. This is why the first decision structure you have taken relates to simplifying the group operating committee. We moved from more than 20 people to about 12. More importantly, we moved from 0% single accountability. Everything had dual or multiple accountability. To now about 60% of our revenue is generated under single accountability. So that's important. And then the last thing, Francine, is to be patient, because there's not going to be we're not solving simplification overnight. It's going to be a journey. And we have to be relentless at that journey quarter after quarter, month after month, until we get the desired outcomes. And that journey is still on like we're not there yet. But as a big chief executive of a big bank, you basically have, you know, the shareholders that you need to please. So simplification may be helpful them understanding what the bank wants to become. You have your clients and then you also have the employees. So how difficult is it to juggle these, you know, three masters.
So that is one consideration which fortunately the three masters align on is being best at what you do. Your customers want you to be the best at what you serve them with customers. Your shareholders will pay you for what you best are doing. They won't give you a valuation for something that your average. They will give you a valuation for where you really command, where you're an authority in being able to provide that service or that product in that market so that shareholders align to be the best. And then our colleagues want to be the best with our colleagues when the when our colleagues are in the competitive landscape and they want to win and they basically thrive when they're the when we're delivering the best we can and when we're delivering best outcomes and we're basically the best at what we do. So, you know, you take this as a guiding thread and you say, let's focus on that focus where we can grow in areas where we're the most competitively advantaged and then everybody aligns colleagues, clients and shareholders.
Is that why you learned Mandarin? You want it to be the best for HSBC? Yeah, I don't think I'm the best at HSBC speaking Mandarin. That's far from it. But you're the first CEO to speak Mandarin. Possibly. Yes. I think what is important is to gain access to understanding, you know, the culture in which HSBC operates. And obviously one of the very important cultures within HSBC as a whole. But that is probably one of the least understood for, say, people living in, you know, in in London like I'm living now, is understanding the Chinese culture. And, you know, if you really want to understand the Chinese way, way of thinking, the way of reasoning, the way of negotiating or engaging or presenting simply, then there is no better way than kind of put the pain and trying to learn the language and see how it's done in the language. It was quite bold because it took a sabbatical for it. Was it a difficult decision or did you automatically know this was the right way to also service your clients? First, I knew if I really wanted to make a leapfrog in my, you know, early start in Mandarin, it needed it needed much more time than I could give it. Now, I'm proud to say I still take lessons whether I'm progressing or not, I don't know, but I'm still taking lessons. On maintaining that you know, that you know, but there needed to be a leapfrog at the start which which the sabbatical has helped. Was it for yourself or was it for the bank? Because it's interesting. It was it was Mandarin and nothing and not something else. No. Well, look, I mean, you know, I've taken six month out and there are a number of things I achieved during those six months, some of them personal, some of them professional. But yes, it was full on.
The future is AI and in our conversation Elhedery made that very evident. But bringing colleagues along for the ride is one of his new leadership challenges. Talk to me about in simple terms, right, how you see the bank in five years. The world is moving fast. We need to move fast. Our customers are moving fast. We need to move fast. Their needs today will be different tomorrow. Their goals today will be different tomorrow. And we need to be continuously adapting to their evolving needs and their evolving goals. There are two key, or a few key components that can achieve this. Most importantly, the first component is the human touch. Okay, we're still in a very much believer in the model where there will always be a person to talk to. So we invest in our relationship management, we invest in our, you know, people skills and capabilities. We invest, not people simply so we're not replaced by A.I.. So that's the second component is we absolutely need to be innovation ready and embrace it and enable our capabilities and and be able to embrace a number of emerging payments through blockchain or tokenized deposits, all of which we launched, by the way. But you know that that's an evolving world, but also being, you know, Gen A.I. ready in particular. I mean, A.I. has been with us for 15 years, but GenAI is clearly bringing something new to the equation. Now. We have we have more than 100 cases, of which about half of them are already live in production that are transformational. And they're going to change the way we as humans operate. And while we as humans will not be replaced by if we don't know how to embrace it and upskill ourselves using it, we will become obsolete. So this is why my call to our colleagues has been to bring all of them along. The journey of how can we best use GenAI opportunities? Because for those who don't use them, there is a real risk that they will be displaced. But those who will use them are going to be part of the future.
But if you're a young kid today and you want to get into banking, what do you study? Let me try to answer it with two pronged approach. The first one, GemAI specific, right. We now rolled to 170,000 of our colleagues internal productivity tools that can materially improve their capabilities of reading documents, reading emails, writing documents, emails, querying challenging control process 100, 170,000 of our employees. I mean, should soon all the way to the 200 plus thousand employees. Of course, I will be monitoring usage. I'd be monitoring super usage. Those will be the most, you know, kind of influencing among their colleagues to drive the utilization. But utilization is not optional because that's how people remain very relevant in the future workforce five years down the road. But we're using GenAI in in wealth, we're using GenAI in markets, we're using GenAI in contact centers. We're using GenAI, of course, in technology. Now 30,000 of our technologist engineers are enabled GenAI the speed at which would able to batch for say, code weaknesses or kind of vulnerabilities is ten times faster already now than there was the case last year ten times. And we're not talking in 12 months. In 12 months, we're not talking. We're not talking some productivity in five years. We're talking productivity already here. This is a huge transformation. And so you can imagine how important it is. Now, I go back to the first part of your question, Francine, is what are the skills that are needed for for banks? I would say there is no one particular skill that's going to be critical, but it is going to be the ability to learn because you can come in the bank coming from an engineering background, from a technology background, from an accounting background, but once you're in the bank. Your career, the customers expectation are such that you're going to have to continue to do that. And if you think you know it all, then there is no place for for those, you know, in in an evolving landscape today, the most important learning capability is how to best embrace GenAI and innovation in general.
Are you surprised that these, you know, tariffs and trade barriers that have been erected really in 2025 haven't had that much of a material impact? So a couple of things here, Francine, that are interesting. The first one is tariffs in and of themselves aren't a new feature of global trade. There always was forms of what was more new in 2025 is the speed at which both tariffs have been erected, but also deals have been negotiated to reduce tariffs or remove those. So that was kind of the the new feature. What's also important to note is that, yes, trade found its way and we've seen trade patterns be, you know, between between Asia in the Middle East or within Asia or in to some extent also between Asia and Europe that have outgrown some of the corridors that have taken, you know, that that have been slower in terms of trade growth or that have taken a kind of a setback in terms of trade growth. What's most important with this reconfiguration of trade patterns is that based on our internal research, we believe the the kind of addition to GDP that these new trade patterns within Asia will bring to Asia will three times more than offset the loss of GDP. That will be, you know, due to the reduction of trade with the US. So there is clearly, you know, value creation when we see Asia buying Asia and this trade, these trade patterns and these trade corridors grow because they're driving not only trade, but they're driving FDI, they're driving employment, they're driving domestic growth as much as it is trade growth this year, the next couple of years seems to be much more complicated because of geopolitics. You have this massive fight between the US and China. Europe, somewhere in the middle the UK has to find its footing. How difficult is it to navigate geopolitics as HSBC CEO?
So look, there is always a guiding North Star in managing international kind of relations is what do our customers need from us? Because at the end of the day, whatever we're doing, we're doing it because we have customers asking us to help them with or to deliver it for them. Like So as long as you believe on this planet, we will have loads and loads and loads and loads of international customers who are looking for supply chains around the planet, who are looking for resilience in their supply chains around the planet, who are also looking for consumer markets for their product and services around the planet to scale their capabilities. Then HSBC has a critical role to play.
All right, Rapid Fire. Your top tips for holding highly effective meetings Make decisions. A poor decision is always better than no decision because you can always change a poor decision and align it and adapt it. No decision leads to paralysis. How do you overcome self-doubt or imposter syndrome? Always go to first principles. What is your mission and is what you're doing aligned to your mission? There are various leadership principles I live by an important one that great leaders build, better leaders. Am I on that journey? And I do I have great leaders around me that I'm helping build. What honest advice do you try to impart? Someone you identify with Having great potential? Enjoy it. You can't be too worked out in knots around things. It's very important to take always step back, a deep breath and just do it the way that you feel you're enjoying it because you'll be much more impactful. I love that. Have fun along the way. Right. Georges, thank you so much for your time. Thank you very much, Francine. Thank you. Thank you. Bye.