Ajay Banga (Mastercard) and Vindi Banga (GSK) in Conversation With SOIL Founder

So I'm starting the webinar now, and we'll start welcoming people into the room. Good evening everybody, viewers from the YouTube channel and also those who are joining us in the webinar room. I cannot tell you how happy I am, and my colleague Shubhika is, for welcoming Vindi and Ajay. I'm told this is the very first time that the two brothers are on a panel together, and so what a gift for all of us to receive from the two of them. The two of you are often talked about as leaders who have brought great joy to all of India because you not only excelled while you were in this country, but you managed to excel on the world stage. The kind of recognition you got makes all of us feel very proud. I'm particularly happy because when I was a young man, I heard from my father-in-law Colonel Raj Kumar Mehta about how much he looked up to his colleague General Banga from the Indian Army, who was such a wonderful leader. So it's so nice that we have both of you today. Shubhika, before I begin to ask the questions to our two wonderful guests today, you want to say quickly something about yourself as a co-host.

Thank you so much for having me to co-host this evening with you. I am equally thrilled to welcome Mr. Ajay Banga and Mr. Vindi Banga. Such a pleasure to have you, sir, with us, and look forward to loads of learning today. Hello to all our viewers as well. A bit about myself: I'm from the first batch of SOIL, and post-graduating from SOIL, I joined Cola's management training program. Since then, I have worked to support our businesses for various compensation, benefits, and stewardship initiatives across India, South Africa, and currently supporting the India market. So it's really been 10 years of my working journey with Cola. That was my brief introduction, and with that, I will hand over to you to begin our session today. Thank you.

Thank you. Thanks a lot.

How nice. And Ajay, what are the memories of your childhood that stand out for you as some special moments?

The first difference between him and me is I was a late starter at golf, and my game is even worse than his, just to be clear. I want to be clear on that one. No negotiating on handicaps here. But they say the truth will set you free, so you're going to get that behind you early in the system. Memories—I have to be honest, the multiple schools: I have said this to my kids. They've moved as well. My girls—the elder one went through eight schools before she finished high school, the younger one nine, and across continents. People, you know, most people resist the challenge of moving. It's adults who complain. It's actually the kids—the adults use the excuse of the kids to not move. It's actually their reluctance, not the reluctance of the child. And I think the child actually becomes adjustable, friendly, outgoing, wants to get to know and fit into new places, which is such an attribute of future success, because that's kind of what life is. I could not agree with Vindi more. The other part that stands out for me is the fact that when my dad moved a few times away to non-family areas during the wars, and it's kind of strange because we used to get left behind with Mom, and Vindi, and Deepa, my eldest sister, and with a bunch of other families in these non-family areas or colonies. There was no cell phone, no email. You didn't hear from your dad for weeks, and then you'd get a phone call saying he's well, and then he would disappear for two weeks. Letters would come in frequently. I still have vivid memories—in Delhi, of air raid trench shelters being dug into our lawn and us having to run into them to hide. Stuff that now seems pretty traumatizing, but at that time we took it as a big lark. My mother felt the stress. I think my sister felt a little more distressed because she was older. Vindi and I were younger, and I think it allowed us to go through it a little easier than probably my mother and sister.

Thank you. What are some of the most important choices you made in your life when you look back? Because a leader is really defined by the choices you make. So what are some of the really important choices you made in your life?

Thank you. Ajay, in your leadership journey from St. Stephen's to IIM Ahmedabad and then your career, what are the moments that stand out in your life and examples of some of the choices you made and therefore the kind of context you define for yourself?

Well, first of all, it's really useful to have an elder brother who goes through stuff before you, because if you can pay attention to his advice—which I did. In my college time, twice Vindi came to my help. The first one was when I went and did my IIT entrance exam. Vindi will remember—I went and studied at the same place where he prepared, which was Sanghi's classes in South Ex. I didn't know any better; he had done all the prep work and I just went right into the same place. I learned a lot, by the way—they were amazing classes. I did very well in my entrance exam and I got into the same mechanism. In fact, Vindi came with me to choose the hostel. I ended up going to his Nilgiri hostel—I remember all that. Then I got into St. Stephen's College before joining IIT. I remember asking him, 'Vindi, what should I do? At the end of the day, you ended up doing an MBA, so that engineering stuff kind of got left behind. You're finally selling soap—so what you do in five years I could do this in three.' We batted it back and forth and we concluded that it's worth giving it a try to do a bachelor's in economics honors and get three years done and then move on from there. So it's funny, but I actually did that. I finished it in three years. I did do an MBA after that, having followed his logic of the journey. I'd say one really good piece of advice is to be born second—it's really useful.

The second part would be later in life, that's more serious. I think the most difficult decision for me was to leave Citibank and come to Mastercard, now 11 years ago. I had been at Citi for 13 or 14 years, after 13-14 years at Nestlé, a couple of years at Pepsi, and then I came into Citi. I had a dream run. They gave me jobs which were amazing. I worked with great people. The company was a lot of fun—it challenged you, it stressed you. It has a tough culture, but if you can keep your head straight and be a decent, straightforward guy, there's a lot of space in that company. They taught me for the first time that it doesn't matter what you look like or where you came from—what matters is what you do and how you do it. I relished that. I had an amazing 13-14 year run, and I was very definitely a candidate to be the next CEO, at a point when I was turning 50 and we were living through the financial crisis. My disillusionment with banking at that time was reaching a point where I didn't know that that's what I wanted to do for the next 10-15 years. I began to look outside. I talked to a couple of my mentors, including the guy who was running Citi some years before that, Sandy Weill. We had this whole heated conversation about leaving. A couple of consumer companies came along—some from my old life, some others which were obvious choices. And then came this company: tiny, 4,000 people. I had 250,000 people at Citi reporting to me; this was 4,000 people. The market cap was $19 billion at that time, and Citi at the depth of its crisis was still worth $70-80 billion and had been worth $150 billion. And this was basically US-centric at that time, in technology, and nobody really understood it well. It felt like where bankers went when they were being sent out to pasture—go join a country club and relax. So coming here was a difficult choice. It turned out to be a great choice, because now in retrospect, the company is worth $350 billion—it's up 17.5 times and it's 2.5 times the value of my old company. But that's partly lucky. Life is 50% luck. But making that choice to give up the opportunity to be a candidate to be the CEO of Citigroup back in 2009 and come and work at a small company, relatively unknown, just out of an IPO a couple of years earlier, previously owned by all the banks—that was a complicated choice. It turned out really well, but complicated.

Thank you, Vindi. And one thing I would tell you: when he used the word 'serendipity' right at the beginning of his answer, yes, serendipity is a very important word. One thing that I think both of us have done over the years—Vindi more thoughtfully than me, I would say. He's far more careful about his thinking. I kind of follow along when he's doing something, or I'm a little more impulsive. But at the end of the day, both of us value serendipity for our lives, both in careers and in our personal lives. If you look back on what both of us feel most happy about, it is that serendipity has taken us places. You over-plan things—you're sitting in a job and you say, 'I want Vindi's job, I want to be chairman of Hindustan Lever'—let's go back 20 years when he was doing that. But chairman of Hindustan Lever when Vindi was the chairman may not be the same role 20 years later, and the whole company's structure may change three times between now and then. The probability of what you think is a career opportunity when you're sitting in it, looking up four levels above you, may not be the same job by the time you get there. That has happened to both of us many times in our careers. Over-planning your career based on today's structure is the worst thing you can do for your career. That's something that I think serendipity really means something for.

Thank you for sharing that, Vindi. Amongst all the things that have happened in your life, I know personally from my own experience that you grow when you go through some very difficult situations or challenges. Was there any particularly difficult moment or challenge or situation you faced that you grew as a result of?

Yes, and I think around that time I got the opportunity to work with you at Lever's, and that's how we met. I very distinctly remember the new conversations you had initiated, including that whole thing about the leader as a coach and that model. So, fantastic, Vindi, thank you. Ajay, coming to your story now—they say that sometimes you gain a lot out of pain. Has there been any particularly painful event in your life, aside from the fact of having to follow in the shoes of a star brother?

By the way, I think Vindi hasn't talked about one thing which, out of my own experience now, having thought back to what he did at Hindustan Lever—managing a company in which the primary shareholder is a foreign company, but your responsibility to local shareholders stands heavy on your shoulder. I think he just walked past that by saying, 'I did all that.' But in actual fact, I can imagine that was not easy. When you're that large a component of your parent company's market cap, the pressure from people in London or the Netherlands, wherever they may be, and yet having to be the local person caring about Indian shareholders—that could not have been easy, now that I know better over the years of my own shareholder dealings. But I think he made it look easy to all of us in that time. So that's a topic you should probably ask him more about.

Ajay, thanks for that. I sort of asked it, thank you. We'll come back to that accountability and empowerment, I'm sure, but there's a very big topic there.

So anyway, back to your question about pain points. I have more than one pain point. Really, when I was at Pepsi for those couple of years, we launched KFC and Pizza Hut in India. The level of back-and-forthing that happened—we felt welcomed by the government, and then we felt attacked by the government. Like other things in India at that time, the opening up to overseas companies—Vindi was referring to Procter & Gamble coming in and others. By the way, at that time Indian competitors were also growing. In both our companies, I was at Nestlé, he was at Unilever—we were both facing overseas competition and domestic competition in interesting ways. India's market circumstance, where naturally the proclivity to want local champions creates a very interesting dichotomy in politics and government and business, which I think all of us face even today—that stared me in my face. I went through some very challenging times with amazing government help and amazing government interference. Learning how to deal with that and yet keep your head down and not get upset by it, but realize that life is about challenges you have to navigate through with equanimity—I think was a big learning. But the real learning to me was last year, Govind. Running a company our size—which by now is $350 billion. We've been in 200 countries, we've got offices in 80 countries, we've got 70% of our people now outside of the United States. Everything shut down on the 13th of March last year. New York City shut down. We could see it coming from February and January onwards the way it was spreading through Asia, and yet we miscalculated. I had lived through Asia in the days of SARS and MERS, and I thought this will remain isolated in Asia. Big mistake. The China and travel of SARS time is very different from the China and travel of COVID time. This thing spread because Chinese were everywhere and we were all going there and coming back and forth. None of us were able to see it—it doesn't have borders, you can't put up walls to prevent this kind of thing from coming. We could see it coming and we still didn't have the forthright thinking to say, 'Hey, you better lock down the hatches, because this is coming.' When March exploded, we went from a company growing in double-digit revenue growth—very high double-digit, by the way, we were on our record revenue growth through 2019 and into January-February, which was slowing down—March we hit a wall and went negative double-digit. We exited March at the highest negativity rate of the year. The end of March looked like the end of the world. Financial markets were beginning to freeze up. You didn't know whether you would have capital. As Vindi will tell you in the private equity business, the companies he was invested in had no clue whether they would be alive two months from then, whether they would have the cash flow to survive two months, because you couldn't predict what will happen in the commercial markets and you couldn't predict what will happen to the outstanding liabilities that people owed you. Taking action on many fronts to keep the business running, to keep liquidity and cash flows going, to reassure our employees that we would fire nobody during COVID—not one person despite the damage to the company's P&L—so they could focus on their health and their family and the company's business with clients, and stop worrying about their job. All this turned out to be a great idea later, but at that time we were reacting on the go, on the fly. In the midst of all this, we had announced a transition in my case to a new CEO, to get appointed on the 1st of January. So I had to conduct a transition as well from a guy who'd been around for 11 years to another person. Finding ways to do that by creating transparency of thinking around what stage of cycle you're in and how to manage your expenses and your people and your risk and keeping the business running. Today everybody says we went digital, we went online, we were able to do everything we had to do. Well, guess what—you wouldn't have been able to do deadly squat if your payment system didn't work. For your payment system to work and not in one country, in 200 countries at that time, required my folks to go into work every day when nobody wanted to leave their house. That was very challenging. I came to work through the pandemic every single day. When people thought surfaces gave you the COVID thing—remember, Vindi, the video I sent you? Some doctor at Cornell who explained how it's a surface thing, and then moved on to aerosol, and nobody knew what was actually happening. No one had an idea. We'd all read stories about the Spanish flu and the bubonic plague, and who the hell knew what we were going to live through. If you really want to know what my biggest challenge was, last year was the single biggest challenge of my professional life. The single biggest.

Thank you. Thank you for sharing that. The world has changed forever. People who just tell themselves we will just go back to what life was and business was are obviously not really being truthful about it to themselves. What are you noticing about the profound changes taking place in our world and in the different sectors?

I think Vindi covered that essentially the correct way. I'll just give you my way of saying pretty much what he just said. He called it the jargon of stakeholder capitalism. My view is that capitalism has done really well for the world for the last many decades. But like every other system, when you allow the biggest beneficiaries of that system to decide the rules, you end up with non-level playing fields — whether it's a dictatorship, or an elite political class with cozy relationships with big business, or very big beneficiaries of open liberal capitalism who figure out how to define the guide rails. You end up with bad systems, unchecked systems. I think one thing the world has to understand is that you need guide rails. To my mind, government's job is to create the guide rails for capitalism. The job of capitalists is to use the level playing field that those guide rails should create to build value for your company and yourself. Nothing wrong with that. We've lost some of those guide rails. I prefer not to use words like conscious capitalism and stakeholder capitalism. Vindi and I were in Davos together in January 2020 and I remember telling him I just come from speaking at an event with Satya Nadella when I got really agitated about this stakeholder capitalism stuff. Both he and I were saying by attaching a word like conscious or stakeholder ahead, you're making it look like you need a good adjective in front of a bad word so the two together are palatable. That is not what capitalism deserves. It deserves better treatment than that. But it does deserve guide rails. The second thing is that my belief of the world's problems fits on three sides of a triangle. I have a serious problem with remembering 17 SDGs. I can't remember them. I remember three or four. But broadly I have them listed in three. One side of the triangle is the trade-off between one and many — that's all the aspects of inclusion and exclusion: ethnicity, gender, sexual orientation, growing up on the wrong side of the tracks, not being born in the right family, not having access to healthcare or education. Those are all trade-offs between one and many. The other side is humanity versus nature — what we now talk about as climate, green, water, oceans rising, ice melting. I used to call it man versus nature because my belief is that men are more destructive to nature than women are, but I keep getting advice that I get into a gender conversation, so I've become a little more politically correct and I now call it humanity versus nature. But what keeps the triangle up — I'm a student of mechanical engineering, so you can't keep two things up like this, they fall — what keeps it up is the stability of the bottom, and that unfortunately is the trade-off between long-term and short-term. Politicians, CEOs, school principals, everybody is incented to apply short-term solutions to what are essentially very long-term problems. So a mayor designs a bus rapid transit system or a bicycle lane and pretends they're solving for climate change. They're doing nothing — in fact they're adding to congestion and actually increasing pollution in the city. It's the same for CEOs who care about quarterly results. COVID has accelerated the societal gaps. Today we talk about a digital divide — that divide has been happening for a while. It just became very clear. When kids in America — in New York City, if you lived in a disadvantaged neighborhood, your ability to access broadband, to get online learning, was zero. Forget about rural America, forget about villages in India. These are not new problems. These are old problems that unbridled use of capitalism without the good guide rails of governance has allowed to become a festering source in our society. And so the way Vindi expressed it is the way I would close this: if all of us — companies, individuals, governments — if all of us don't pay attention to this, then we have a bigger crisis looming, and a very serious crisis which will make current societal segregation look like child's play.

Thank you. I think that's a very sobering thought for all of us to reflect on. And Shubhika, there are plenty of questions bubbling up in the Q&A box, so would you start reading those out?

Yeah, all right. Should I start?

From there, please. Yeah.

So this is a question from Gopalji. I teach young MBAs in IIM Bangalore. They are impulsive, want overnight success. How do you teach them leadership and motivate? What will be your advice, please?

I'd add to that. To me, leadership is a privilege — it's not your birthright. You were not born to be a leader. I therefore completely agree with Vindi that you can learn along the way. If you're lucky enough to have two people report to you, that's a privilege. When you were reporting to somebody, you wanted them to be there for you, you wanted them to give you guidance. Vindi probably remembers his first boss, second boss, tenth boss, and the lessons of good bosses have gotten ingrained in him over the years, as they have for me. Leadership is a privilege and it starts with listening more than speaking. My joke in the company is that God gave you two eyes, two ears, and one mouth for a reason, and you should use that ratio to your advantage. If you do that well, then you can have a really good run.

Thank you. There's a second question from Mr. Yogesh. He says, Vindi, I'm also from Nilgiri Hostel, so wonderful to meet you today. I'm curious to understand, how does a company like Hindustan Lever produce so many leaders who have made their mark around the world?

Yes, and Ara Nyer is part of the webinar and he is also sending his greetings to you right now.

Ara probably selected us. Yes, that's right.

So there he is. Yeah, go ahead Shubhika, the next question.

So there's a question from Sabaresh. He says, Hi sir, good evening. How are you looking at the future of Mastercard with the UPI payment coming into the picture? Moreover, some reports say that more than a billion UPI transactions are happening every day. Is there any big transformation that is going to happen with Mastercard?

Yes. UPI is India, and Mastercard operates in 200 countries. India is an important market but it's two and a half percent of our revenue, so I don't want to answer this question based on UPI. There's a much deeper question which I think is of more interest: my belief is that Mastercard is not a card company. We have 'card' in our name, but just to be clear, Apple doesn't sell apples, and Amazon is actually a river in Brazil — that's never a question they get asked, yet I keep getting asked this. I get more than half my revenue from nothing to do with cards. I get it from instant payments, account to account. For example, Vocalink — Vindi lives in London — Vocalink is the payment infrastructure that binds the UK. It's the UPI of the UK, it is in the Nordics, Singapore, Philippines, Peru, Saudi Arabia, the United States, Canada. We own that and it gets us a large part of our revenue. And then AI, artificial intelligence, data and analytics, and loyalty services that build on payment transactions — that's a very large part of our revenue. The company has been transformed over this decade to go beyond a card business. I'm not forcing somebody into a card rail versus a UPI or account-to-account rail. My interest is: do you use my rail to enable the transfer of money between different parties? If you do, that's really good for my business. The second thing is that the advent of new technology is our friend, because it enables us to move faster on the opportunity of reducing cash in an economy. Cash is still 85 percent of retail transactions in the world — pre-COVID. And as the Asian economies are coming out of COVID, it's swinging back towards what it used to look like. The opportunity for us is to attack cash, not just to compete with other forms of electronic payments. That's how we think about our market, and that's what made our company grow over the last decade from 20 billion dollars to 350.

Ara Nair has a question in the chat box, and perhaps that can be asked to Vindi.

So the question is — fascinating to listen to both of you, that's his opening comment — then what are you doing on a daily basis to remain both agile and also intellectually robust?

Well, thank you. Rakesh, who's the president of SOS Children's Village in India, and was also president of our school — he is asking this question from the chat box. Shubhika, you want to read it out?

Yep. So how do you see the employment market shaping up given the drive on automation, AI, cost reductions, and how will the lower-end jobs be generated?

Ajay, you want to answer that?

I am a believer that technology, while it does impact the way jobs exist and are created, it eventually leads to — if you go back over the agricultural revolution, the industrial revolution, and now this new stage — you will eventually find new jobs of new types being created. The real challenge is not that. The real challenge is the time period between when the impact begins and when the full benefits of that change come through to society. Navigating that period is going to be very important, and that comes back to the triangle conversation Vindi and I were having. That will become even more important over the coming decade or two. The downside of all this technology and AI is that a lot of the jobs that till today you thought were relatively safe — take a bank with a large number of people doing compliance and risk management. Over the last decade after the previous financial crisis, those jobs in banks have actually exploded. Most global institutions have gone from a thousand people in that function to six thousand, seven thousand, ten thousand. Automation and AI does change the number of people you need. Or take audit — the more tedious part, a large part of it already the large audit firms are beginning to use AI and automation for. So there's no doubt it's going to change some things we took for granted. The question is: how does society manage from here to there? Continuous learning, job reskilling, creating portable benefits for individuals who can dedicate part of that back to learning and education, changing the way education happens — this is the next decade and two decades of work. It's going to be very complicated to navigate if you don't take a responsible view of those who get impacted. When Vindi was talking about the Western world and whether the southern hemisphere benefited, I described it another way. If you think of the average American dream — it has been this frontline worker on a Ford assembly line who grew up turning a nut and bolt, and then became the shift manager, maybe even the factory manager. As he or she grew through the career, they bought a bigger home — the dream was this big suburban home, two cars in the driveway, a basketball hoop, and two beautiful children who went on to law school and medical school. That dream got destroyed over the last 20, 30 years, because America and other countries like ours did not invest the benefits of globalization back to those who were getting impacted negatively by jobs moving overseas. We must not make that same mistake again. And by the way, that's not an American or British problem. This is a problem in India, in China, in the Western world. AI will impact jobs and the creation of jobs across the world. In fact, there's a book I read which says that while people talk about globalization impacting jobs in the Western world, if you go deeper, technology has impacted those jobs even more than globalization. So we've got to be smarter.

Wonderful. So, one thing which has always struck us as City bankers is your photographic memory. What's the secret behind it?

I have no idea. But I'll tell you one little secret about my memory — I can remember faces for a very long time and I remember things that people wear, which come back to me when I meet them another time. I will recollect that Anil is wearing this slightly dark blue-gray colored narrow jacket, or these days it's called a Modi jacket. I'll remember that out of the blue. I remember the painting behind him. And I'll remember numbers — like I'll remember a number you commit to me that you'll do this kind of market share in 10 years, and I will ask you eight years from now, where are you. But on the other hand, I forget names, and I forget some of the simplest numbers — like I cannot remember my bank account number. Whereas our mother, till the age of 92, the last year before she passed away — she was a pain in the ass. She could remember and she used to harass Vindi about it, which was my good luck. She would remember that dividend which was supposed to come from one particular share that my father had bought 34 years ago — which neither Vindi nor I knew about — that dividend had not arrived in her bank account. So Vindi used to go crazy. The good news was it used to go to Vindi and I used to happily keep quiet on that email. But yes, that is my mother's photographic memory.

I think one last question before we begin to sum up this evening. I think this is Arjun Chakravarthy who shares our HR program. It's a somewhat controversial question.

She's saying, such an amazing learning from you both. Just a fun question: what are the issues that brothers disagree about and why?

I don't know, not that much actually. What do you disagree about with me?

Yes, yeah, right. I think I'm telling you, he plays better than me.

Your common friend is asking the question about golf as well. Rajiv has said something about your golf handicap — he grew up with stories from his parents about how good both of you were, and now that he wants to become a better golfer, what is your advice to him?

He needs to ask Vindi. He's the better golfer.

Anyways, that's the time for us to round up this evening. Shubhika, what would you like to say as your response to this experience?

I think this was a very great session and I would like to share the top three things I took out from it. What matters is what you do and how, not where you come from. Serendipity is a very important word which has taken both our guests to great places, and over-planning careers is not a good way to go about it in today's scenario. Think long term over short term. As businesses and individuals, we should support the bottom of the pyramid to build an integrated society. There were several more, but looking at the time, I will hand over to you for the closing.

Thank you. What a delight to be in your presence this evening. Your father being in the army was such a gift — the frequent transfers taught you to be curious and value diversity, and to see the uniqueness in people and situations. The army also taught you the whole family experience of one for all and all for one. I also relived some of my growing up because my dad was also in the army. Thank you for bringing that up. Vindi, you were very sure early when studying engineering that it was okay for you to become a better leader but not necessarily what you wanted to do for the rest of your life. The field of management opened your mind up. All through Unilever, from respecting Prakash Tandon onwards, it was all about building the institution. You give credit to the organization for enabling you to do your best. When you were chairman of Unilever India, you recognized you were facing a big challenge, but you got people together. You were honest about the mistakes you made together, but you took tough calls. And at the end, you and your colleagues could have a laugh about it. I'll never forget that line: 'What is good for India is good for Lever.' That symbolized the whole journey. Ajay, what a fascinating stream. The credit you give to your brother, the things you learned from him, and therefore decided early to get into economics. Citibank made you a global citizen. Even when you could have been the potential CEO, you decided the financial crisis taught you this is not who you want to be, and you walked away. You took the challenge of a small company with only four thousand people — look at what's happened to Mastercard. You saw tremendous opportunity. Amongst it all, I simply enjoyed the ease with which you two brothers bonded and joked and laughed, and the way you greeted my young colleagues and were so open in conversation. This shows the values you both stand for and how secure you are within yourself. Ajay, I will never forget that triangle — the three big paradoxes of our life. Leading with paradoxes is really very profound wisdom. We need to create a better world for all of us. Thank you both for inspiring us, for your contribution to our world. And I'm sure General Banga, wherever he is, along with all those wonderful EME officers — many of them are also in this program today. Thank you for bringing this to us this evening.

Thank you so much.

All the best.