#AmChamHRM'22: Giorgi SHAGIDZE, CEO, maib

We test once. Oh, okay, now maybe it's good. So I started by saying that there is this professor Michio Kaku that I follow on YouTube, who is a professor of astrophysics and nothing to do with HR or Moldova. But he says that after such a great introduction, I'm looking forward to hearing myself speak. So this is how our host Atlanta made the introduction of me, and many thanks for it. I'm very happy that we work together. She's our chief human officer, I can say like this, and I'm very pleased to be here and present something from our experience about the leadership and cultural transformation. Today we will go through the slides. We did a few slides, I hope they will help us structure this discussion. The very first one, and this is important to say, I'll try to explain what this line of slides means. The message of this slide is that the pace of change is increasing. So in the past, change has been happening since the universe exists, but in the past, change was happening slower. Then as we develop, change is happening much faster than it was happening in the past. Then you can say that this chart is supposed to tell you how many years it took for certain inventions to penetrate the entire world. And you can say that for cars, it took quite a number of years before it penetrated, and maybe there are some other places even today where it hasn't fully penetrated. The telephone the same. But then if we move from the left-hand side, you can see that it took not so many years for computers to penetrate the entire world. It took about half of that time for a mobile to penetrate into the world. And then how many years will it take for artificial intelligence to penetrate the entire world when it's up and running and when it starts to operate at full capacity? So the pace of change is increasing. Now, when the pace of change is increasing, clearly there is a role for leaders to ensure that they address this change, they acknowledge and understand this change. And there have been great companies in the world who have missed this particular moment where they needed to change, and those great companies now are history. We know companies like Nokia, the mobile phone producer. There is the story of Nokia software before iPhone introduced their phone. They had maybe 80% of the market, and they were absolute leaders. And one day they started to become irrelevant for the market. So this was pretty much a failure to understand when the change needs to start and when the change needs to fully implement it.

Now I've been going through various materials and pictures, and I think this is something that very clearly says what is important when we speak about long-term success. It is clearly the one who can adapt to the new environment who will win. It's not the best, as we saw from the case of Nokia or from the case of Kodak, or any other case that we can bring on the international or local level. There are many other studies as well. This pattern that leaders go out from the industry actually accelerate, so that now people go out from the industry much faster than it was in the past. But then okay, we need change. And then all of us, perhaps and I hope, are aligned that we need change. But what is the change that we need? And from where to where do we need to change? Very importantly, some people may say that this is the strategy, this is the right direction, this is the leadership vision, and so on. There are many things, and I think the phrase 'culture eats strategy for breakfast' is something that more and more people now share and repeat. I think if you start any change, based on our own experience as well as access to the materials we have, the most difficult and most important change you are facing is cultural transformation. It is changing the culture. This gentleman actually says from his experience, it took me to age 55 to figure out that the most important change or most difficult change is the change of corporate culture.

Now, what is called corporate culture? I will not go into very details describing every single nuance of culture, but we can say this is the combination of values, norms, and behaviors. When we think about the values, this is not something that we have written, even though even in our bank we write lots of posts, we communicate a lot of descriptions and clarifications of the values. But these are the values that people feel they belong to, and people share these values. Not necessarily they share those values because they read something about it, but because they have been operating this way, they have been fully embedded into the values that the company has. If we think about the bank, taking the values that traditional banks have, traditional banks are more siloed, more conservative, more risk-averse, more afraid of mistakes. So this would be the typical traditional bank. You go anywhere in the world, traditional banks' values would be somewhere around what I said. And then you are competing with people who are innovative, who are inventing, who are not afraid of mistakes, who will try, learn, and then adjust and try again. And then you are competing with them. Maybe this is why there is this company Alibaba, whose market cap was more than the entire market caps of the entire European banking sector. There is this company Revolut, whose last round of investment ended up with a market valuation of 35 billion dollars. This is some of many very well-known European banks taken together. I don't want to name names, but these are the names that when we were starting our careers, they were absolutely amazing, best class, and best practice. So banking is then competing with people who have this type of culture and behavior.

Now we do acknowledge and understand this at maib, and we started a huge cultural transformation in the bank last year with a refreshed strategy. We started a huge cultural transformation as well. So Atlanta mentioned the 60 of us right now are going through the Stanford leadership course designed specifically for maib. We took 60 people from the top and middle management of maib to visit and see how ING, which is one of the banks who have adopted new standards and practice very well, how ING did it. By the way, ING started their cultural transformation using best practices from Spotify. You all know Spotify is a music company; it has nothing to do with banking. Its owners do not even know how banks operate. I hope they have bank cards, but they are not bankers. So ING took this system from Spotify and ensured that their cultural transformation and systems transformation was done based on the best practices in Spotify. This is how they can compete with various fintech, high-tech, and other players. This is what we are going through. We started last year the transformation to a more agile way of working, more leadership culture which is more servant leadership as opposed to a boss who is sitting in the office and all the people waiting outside, with two doors before you get into his office. By the way, we don't wear suits. I had in the morning conference where I had to wear these suits; otherwise, it is not the practice that we do. Cultural transformation is a must and is the only way if any company needs to win in the future. So this is our picture. That would be if I wear a suit, that would be the type of suit that we wear. This is our agile teams, we call them agile teams, people who have already gone through this transformation. Now I don't want to say that we have finished it. I think what we need to say is that we have started a very exciting ambitious journey. We will finish the transformation of the head office, retail, and SME perimeter to agile next year. It will be corporate and operations the year after. We will finish the first phase of the transformation. Now the most important thing about the transformation is that we need to understand and create a culture which is prepared to constantly change. So there is no end state. There is no state that we can say, hey, we just transformed; in another 10 years we will sit down and look at how the business will develop. No, in fact, it will be constant change, and our culture will enable constant change to meet our customers' rapid change in their expectations. So this is all I hope for. My 15 minutes was used wisely. Thank you very much for giving me this opportunity.