< Intro >

– Welcome back to Count Me In.

In this episode, we have the privilege
of interviewing Yerbol Orynbayev.

Who shares his extraordinary

leadership journey, and the
impactful lessons he's learned.

Yerbol's experiences range

from serving as Deputy
Prime Minister of Kazakhstan,

to transforming the Jusan Bank

from near bankruptcy to
achieving $1.2 billion in profit.

Throughout the episode,

Yerbol sheds light on the
crucial decisions and strategies

that were pivotal in
leading the bank to success.

His insightful advice on leadership,

vision, investing in people,

and embracing failures
provides valuable lessons

for aspiring leaders.

Join us as Yerbol shares his
invaluable wisdom and experiences,

on navigating crisis and driving change.

< Music >

Yerbol, we're really excited
to have you on the podcast.

I'm just really excited to chat with you,

about your leadership journey and
the different paths you've taken,

and you've had quite
the leadership journey.

What drew you to the different
positions that you've taken,

and what are some of the lessons
you've learned along the way?

you've learned along the way?

– Adam, first of all, thank you
very much for this opportunity

to share my experience
about Jusan Bank story,

with you, with your program.

I worked for the government of 
Kazakhstan for quite a long time.

I resigned in 2015.

Before that time, before my resignation,
I served as the deputy prime minister

and handled economic and
then social responsibilities.

And, so, in 2018, when I was
already with the private sector,

working on my own business.

I received an invitation
from the university,

which asked me to help them to set up

the investment division
of the endowment fund.

So it was a very exciting proposal.

I believe they decided to focus on me

and then send this invitation to me

because during my time
with the government,

I served as a board member of
the National Bank of Kazakhstan.

The board member of
the Agency for Supervision

of the financial organizations.

I also, successfully, set up a
western-type university in Kazakhstan.

So a lot of people knew me very well.

So they said, "Okay, why not,
after one successful story,

one successful project, let's
offer him this opportunity."

So in 2018, I started this journey,
the Jusan Bank with other banks,

and I had this great opportunity
to create the investment division

of the endowment fund.

So that's how I started this
particular journey with the Jusan Bank,

with its restructuring,

creating a new business
model based on the ecosystem.

In terms of the lessons,
actually, it was very interesting

and enriching experience.

I learned very valuable lessons.

One of them is that you should
really understand your business,

and then your customers.

And, then, currently, there is a great shift,

all over the world, in terms
of the customers behavior.

New technologies like AI, digitalization,

increased computational capacities, and
also the new generation of customers,

they have completely
different preferences.

So these two trends kind of
changed the whole landscape.

So you have to understand your clients,

you have to understand
your business within/out,

know your customers.

Because if you don't
know you cannot lead,

and you cannot restructure
or do some right things

without this really deep
knowledge and understanding

the main foundations of your business.

The second lesson I
would say that, dream big.

What I learned, in reality, with
great vision, with the right team,

with the right strategy, with
the right implementation plan,

you can achieve a lot.

So dreaming big it's very important.

The third lesson I would say that
always have an exit strategy,

especially when you're
dealing with the big structures.

Together, the whole system,

I managed about 10,000 employees.

So this is quite big, the price of
the mistake could be very high,

but you cannot stop
development, you have to innovate,

You still should align your
business, product, services,

in line with the current demands.

So you should innovate,
you should do something new,

but exit strategy is very important.

This is your hedge, that makes
sure that the whole structure

won't collapse if something
goes wrong, this is very important.

Trust your team, I think
team is very important.

The quality of the people
you are working with,

their professionalism, their
ethics are very important.

So as soon as you set up your team,

you know that you can trust
your people, just let them perform.

And in the banking sector, this is
more important than even others

because teamwork is incredible.

This is very important.

I didn't see a person who
can just, in one phase,

cover all requirements of the banking.

You need a strong CFO, you
need a strong risk manager,

you need a strong
chief information officer,

so you see this is very complex.

And then you can, together, compile
the team, or the professionals,

who can work together, who
can share the same vision,

who has very good ethics, only
with this one you can proceed.

So this is a very important lesson.

If you are unsure about
your team, don't start.

Because alone you cannot
perform, you cannot achieve.

So I would say these are
very important lessons

I learned from my journey with Jusan.

– I think those are
some amazing lessons.

And maybe as we have this conversation,

we'll be able to see how you
came to those lessons at Jusan,

as we talk through that journey.

So when you first
stepped into that challenge,

they said, "Hey, we want to
bring you on the Jusan Bank."

What was the atmosphere like?

What were some of the challenges

and the immediate hurdles that
you saw that you had to jump over,

as you started that
new part of your journey?

– This, actually, was very interesting.

So when I took the reins of the bank,

the situation was pretty horrible.

So I had a feeling like
starring into the beast.

I just give you one example.

The bank's auditors, KPMG, they came
to us, after we purchased the bank,

and then told us that they won't
be able produce any audit report.

They said, "We have
access to the accounts,

but the accounts are a mess,
documentation is such a mess,

so we just even cannot interpret them."

And the bank did not have people
who can interpret and work on this one.

So can you imagine?

So 2018, the year they audited,

was completely a failure,
and according to the regulation

you still proceed because the public,
the regulator, would like to know.

So this is one of the example
how the bank was managed.

Also in terms of the business
and the morale of the employees,

it was a complete mess.

Two years' worth of the
efforts by the government

and the bank administration
failed to turn things around.

So it seemed like the
hope was completely lost.

So this was the overall landscape
and the atmosphere, environment,

at the time we entered the bank.

Then we faced, I would say,
major three challenges.

The first one is the lack
of the professionals,

and we didn't have a lot
of time to search for people,

but we had to address this
issue almost immediately.

So to fill in the gaps in terms of the
management was very important,

so we successfully did it.

– Those are some amazing challenges

that you had to face,
and I can only imagine

what it took to gain the
trust of your employees.

And how did you navigate
those waters of gaining trust;

stakeholders, employees,
customers, trying to win back.

Because getting an audit like that from
KPMG, and having to turn that around

and turn the company
around is not an easy task.

So what steps did you take

to try to gain that trust from your team?

– First of all clear communication,
so you should be as transparent

and honest as possible.

Because in this critical situation, and
this mostly was crisis management,

you should be communicating
almost daily, which we did.

Then we also came up
with the smart strategy,

which we called—quick successes.

So we wanted to demonstrate
that things are in terrible shape,

but that we were able to produce,

even in the short run,
some positive outcomes.

So we came up with this
strategy of the short successes,

and within three, four months, we
already produced new products.

We produced even some small app, which
addressed the disadvantages of this bank,

so it was very successful.

Doing this, we also bought some
time to focus on our longer strategy,

restructuring, recovering
from the junk assets,

and in parallel building
our ecosystem model.

So this short successes
strategy helped a lot.

– Now, there's something you mentioned,

the ecosystem model.

I remember reading about that,

and it's not something that everybody 
appreciates, in the banking sector.

Maybe you can talk a little bit
about what the ecosystem model is,

and some of the challenges and
criticism you faced when implementing it.

because I know not everybody
is a fan of that type of model.

– The ecosystem models they're
about bundling different services,

traditional banking services,
with non-banking services.

So you bundle them, and then
introduce on some digital platforms.

So in a nutshell, this is
the essence of this model.

Behind this business
model are two trends.

One is the change preferences.

So the new generations, they don't
like the traditional way of banking.

So with the introduction
of the smartphones,

everybody spends most
of the time over there.

So they would like digital way
of interacting with the banks,

receiving loans, making payments.

So the new generation,
they're the drivers of this trend.

And the second one, of course, the
increased computational capacities,

which allow these things to
happen on the digital platforms.

And then the first year we introduced this
model, we actually started implementing

at the end of the 2019,

And then 2020 was the most busiest year,

In terms of the implementation and
introduction of this, that our branches,

all over the country, and the Jusan Bank

used to have more than 150
branches, across the country.

The business model of these
branches changed significantly.

So when, initially, we introduced,

people mostly visited our branches
to learn how to use our app,

and then how to use our browser.

So we just trained,
every day, our customers,

and they came by themselves.

They just wanted to use it,

but they had some reservations or
some questions, so mostly we spent...

By the end of the 2020, we saw that
we don't need any branches anymore

because people stopped
visiting branches.

And, so, we managed to rationalize
the whole system of our branches,

which we ended up with a
lot of the savings, actually.

– Mh-hmm, so it was
used to take the bank

from how banking has always
been done to modern banking,

which is kind of what you see now, today.

I can't remember the last time
I was at a branch, for my bank.

It's probably been a year or
so since I've been at the bank,

so I think everybody's used to that now.

But 10 years ago you did
everything at the branch.

And, so, it shows the sector
has changed so much,

but it was obviously very successful.

– Absolutely, it was very successful.

It was very reasonable to do, it
was the requirements of the time.

But by the time we implemented
it was still emerging.

So now it's more or less established,

at least in Kazakhstan, in the
former CIS countries, in China.

In a nutshell, the banking still is the
same, as traditionally we understand it.

This is the intermediary
which accepts deposits,

and then makes loans, and then
facilitate transition of the savings

into productive investments, but the
way how you do it, completely different.

– I mean that's amazing.

It's public record, but you
guys were near bankruptcy

and it went up to $1.2 billion in
profits, and that's no small feat.

And it took a lot of leadership
decisions, and the leadership positions

that you've been in, I'm sure that there
are moments of very intense pressure.

And maybe you can share some of
the specific high-stake decisions

that you've had to make, and how
you approach those decisions.

Because not everybody is built to
make those high-stakes decisions,

especially, in intense situations, and
it's very difficult to walk through that.

So I'd love to hear your insight.

– Thank you, Adam, I think
this is a very good question.

So to make this transformation
successful, at the beginning

we split the bank into the
bad and the good divisions.

Because we dealt with
some great garbage,

I would say a mess;
so how to deal with it?

So we decided to split the
good part and the bad part.

And, actually, when we
implemented this exercise,

and we set up two different teams.

So one team was
focused on the bad bank.

So the main purpose was the
recovery of the assets over there,

and the good banks team was
focused on the new model,

ecosystems, bundling
services, digitalization,

and then this perspective stuff, and
actually when we implemented it.

We run this exercise through all our
clients, and then guess how many clients

ended up in the good and the bad bank?

Only two clients, existing clients,

from corporate clients, they
ended up in the good bank.

So can you imagine?

And this used to be
the second biggest bank,

in terms of the corporate
financing, in Kazakhstan.

So most clients went to the bad bank.

So this is, I think, systematically,
was the most important decision.

Because it allowed us to
focus on different priorities.

What, I found out it's impossible to

simultaneously focus on these two,

in a way, contradictory tasks,
at least, in terms of the one team.

So this split allowed us to create
the framework to proceed.

And then what is important,

we proposed non-restructuring
policy, which was very important.

It meant that the board of directors
said no to any form of the restructuring,

other than the early repayment.

Given the Kazakhstani banking practices,

it was very new and innovative.

Because it was a strong stand
against any type of corruption,

and ensure that everything is transparent.

At first, most of the borrowers,

they tried their luck with us,
they tried to approach us.

They offered some proposals
trying to bend this rule,

which is pretty common in Kazakhstan,

and restructuring may
have very tricky forms.

So you may just increase, for another
10 years, the tenure of the loan.

You may say, "Okay, given
the situation with the business,

let's lower the interest rate."

Or "Make payments by
the end of the maturity,

not monthly but let's
say once in six months."

So it was very tricky.

It looked very reasonable on the
surface, and then you always can justify

why you are doing this one,
but you end up with corruption.

So we said and we agreed
on the decision makers,

on the management side, that no way,

because if you do one favor to
somebody, then you cannot control.

And, then, as soon as you restructure
and somehow involved in this type of

questionable type of the practices, then,
a borrower knows that he might not return

because he's, in a way, in
the agreement with the bank.

They have this kind of friendly
relationship, so it was very important.

So, we said no to these practices,
and surprisingly it worked.

After people realized that
we meant this business,

they miraculously found some
resources to repay the loans.

Because we told them,
"Either stick to the agreements—"

We didn't sign this, we
were new people here,

you signed it before with
the previous administration.

So either stick to this one,
or repay and leave us,

or if we found that you're doing wrong,

you're defaulting, we
bring you to the court,

and we'll proceed with the bankruptcy

or other type of legal cleansing.

So most of them preferred
to repay and leave us.

They said, "This is something—"

And then my team, we ended up with
a lot of retention with some people,

which we perceived as friends.

Politician, judges, members
of the parliament, so they said,

"Okay, you personally didn't like us,
this has nothing to do with personal,

this is just the corporate policy."

But somehow it worked,
and people respected it,

and they understood that
this is the way to do business.

We did it transparently.

We announced it, and we stick to this one,

we meant it, and we never
allowed this type of restructuring.

We hired young professionals,
as I mentioned, was very important.

Because some of the traditional bankers,

even in the younger stages,
they opposed many changes,

particularly the artificial intelligence
initiatives, this type of the restructuring,

I explained to you.

We hired some professionals, maybe
even not with the banking background,

but with the financial,

particularly from telecom industry,
we found a lot of great people.

Then we also restructured the
whole organizational structure,

and this was a very big change.

Just to give you a flavor, we
had more than 150 branches,

across the country, we ended up with 119,

so almost 1/3 we managed to
optimize, it was a lot of savings,

Just bank by itself, employed about 5,000
people, we also managed to downsize.

We had 2.7 million individual
clients, customers, so you have to,

when you restructure, when you set
up a new organizational structure,

you should be very
careful not to lose them.

And, then, about 176,000
small and medium enterprises.

So it was kind of the big restructuring,

it's not the final list, but
just to tell you straight.

– No, I appreciate that.

You had to make some really tough calls,

especially, when it comes to downsizing

and restructuring, and it's difficult.

But based on the success of the bank,

they were the right decisions,

and it's not always easy
to make those decisions.

And maybe as we
wrap up the conversation,

you can offer just some advice for
people who are saying, "You know what?

I'm looking to get into leadership roles."

And sometimes leadership
roles can be very challenging,

especially, in business environments

that you're restructuring things,
you're trying to change up things.

And maybe based on your experiences,

you can give just some advice to
the folks who are listening to this

and saying, "You know what?
If I find my little situation,

I can apply some of the
lessons that you learned."

– This is a great question, and
then just to bring one example,

you have to be ready if
you start this journey.

When things go fine, they're okay,

usually, this is because of your boss

and the board of trustees
or the management board.

But when things go wrong, usually, it's on
you, so you have to be ready to accept it,

somehow it's unfair but this is the reality.

So this is the prerequisite for
somebody who would like to try.

In terms of the lessons for leadership
and successful implementation.

You need to have a vision, a strong vision.

Based on the knowledge
of your business customers,

if you don't have this vision, don't start
your journey, this is very important,

it's not sufficient.

As soon as you have your vision,
you have to clearly communicate

and build a shared vision,
both with your employees,

with your team, top managers, and also
articulate this one to the customers,

it's very important.

It's in a way like the social contract,

in the words of the French
philosopher, Rousseau,

around this one you can build something.

But if there is no vision, if it's
not shared with your team,

you're kind of doomed to fail.

So to create this vision, actually,
we created, setup Jusan club,

and then the Jusan club
was very instrumental.

It was the monthly
gathering of executives.

So we could informally discuss, share our
success stories, learn from each other,

and in this way you create this oneness

It's not like words people read, but
people are usually very skeptical.

You need some examples,

you need some informal
type of the communication,

which make them believe
into what you are saying.

And then when peers share, this
is very important, both mistakes

and the successful stories.

Investing in the people, very important,

particularly now our case
because it was, in a way,

a completely new business model based
on the new technologies, digitalization,

so we introduced the chief learning officer.

She got a PhD in education
from Cambridge University.

So she was very successful,
in terms of the assessing needs

and training the whole staff,
based on the different levels.

And we even set up two educational
centers to train our own IT personnel.

In IT mostly you need some writers
of the Python or some coders,

and you don't need most
of them to be a bachelor

or master degrees from universities.

Of course, we would tap
potential of our universities, also,

we'd take the first in the line, in terms
of our computing schools graduates

so we hired most of them,
particularly for the IT department.

But in the lower value-added activities,
you usually don't need this qualification.

So you need somebody,
even after high school,

with good skills in the mathematics.

So you just train them and then
usually three, six months is sufficient,

and it's very difficult to find
them in the market, actually.

So we trained our IT
personnel by ourselves.

So learning, investing, in
the people is very important.

Clear KPIs, very important.

Try to stay away from the shadow zones.

Try to articulate them
as clear as possible,

leave no room for misinterpretation.

Address all this gray area
because this is your contract

and this is your expectation.

So people must be very clear
in terms of the expectation,

in terms of their duties.

Embrace failures, it's inevitable, in such
type of the new disruptive models.

Nobody did it before,
so you experiment usually.

So don't be very tough on the people,

they're learning because
you are learning, too.

So learn from their failures
and their mistakes, don't punish.

Talent focus, I used to have
a rule which I called 90 days,

usually three months
is sufficient to understand.

Because some resumes are, sometimes,
reading very difficult to understand,

whether it's artificial intelligence
prepared it, or people, somehow,

in the fancy way, prepared it, but
unless you really try them in the field.

So usually 90 days is sufficient

to understand whether
a person can deliver.

Usually if you have some doubts,

I provide another 30 days, but
by six months it will be sufficient.

And then you have a clear understanding,
whether you're okay with the guy or not.

Or maybe you did a wrong decision

in terms of the qualification, so
maybe just to send to other division.

But if not, if it doesn't work,

allow this person to leave
or do something else.

Motivation is very important.

Focus is people can perform
when they are on the stage.

It requires a lot of attention
which you cannot do all the time.

So monetary, non-monetary,

building the system of incentives,

so that is part of the culture,

new business culture, very important.

So they understand right signals,

they know how to proceed.

Monetary incentives, also very important,

and then hard work, there is no
substitute for the hard work.

There is no silver bullet.

As long as you understand your business,

you have a great team, then
the hard work is indispensable.

So this is, in a nutshell, the lessons,

in terms of the leadership,

I learned and wanted to share
based on the Rousseau story,

and I think people can
learn something from this.

– I agree, and Yerbol, I just
want to really thank you

for sharing your story, on the podcast.

I know that the audience
can learn so much,

and thank you so much for coming on.

– Thank you, Adam.

Thank you for this opportunity

to share my experience,
and thank you for having me.

< Outro >

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