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Michael Jordaan has been the CEO of First National Bank (FNB) for approximately nine years, a bank that has gone from strength to strength, and now is the most innovative bank in the world. Under Jordaan’s leadership, FNB has positioned itself as a tech-savvy bank. It was the first South African bank to launch a transactional banking application, and to subsidise customer smartphones and tablet computers in order to enable them to use the app. This has helped it drive down costs by reducing the need for customers to visit branches.
Jordaan has a reputation for being unafraid of the unknown, for asking for feedback about himself, for being a believer of situational leadership – letting the best person take the lead; and for surrounding himself with the best. He also is known for being a bank CEO with 33,000 twitter followers.
He stepped down at the end of 2013, to pursue his passion for technology and entrepreneurship, replaced by Jacques Celliers, currently a member of the FNB executive Committee. So, what are some of the leadership and motivation methods that Michael Jordaan has used over the years?
Jordaan believes that to achieve an innovative culture requires discipline, focus and endurance, but also the ability to challenge everything. FNB learned dedicated perseverance, along the way to success. They made many mistakes, but then just tweaked it, and tweaked it, until it became better. When the global banking crisis hit, FNB took a dip, but then it was time to challenge everything. They rethought where the market was going, reappraised their business model, positioning, and cost structure. They cut fees, and lowered prices for current customers, and then they went to the market aggressively telling new prospects how much money they could save by joining FNB.
Jordaan believes that to achieve an innovative culture requires discipline, focus and endurance, but also the ability to challenge everything
Jordaan takes people management incredibly seriously. He believes that you can’t employ good people who are inherently proud and wanting to achieve and then frustrate them with micro-management. His strategy is to get out of the way, and then challenge, question and debate intensely – but he deliberately, never tells. He encourages team members to feel that they can challenge at any stage of the strategy crafting process. Jordaan recognises that employees thrive when they work for someone they want to work for, which is someone who has their best interests at heart, and wants them to do well. He believes in surrounding himself with better people and in setting them up for success. At FNB they are known for handing out generous prize money rewards to innovators who are recognised as heroes.
A large part of Jordaan’s success is based on taking calculated risks, and many of them. Jordaan sees organisations grow large and start bureaucratising, systematising, often putting in place rules and processes, mostly to minimise mistakes. While this may be good it also stands in danger of becoming a barrier to an empowered employee culture. His view is, that it is very important if somebody suggests a great idea, and all debate it and agree to give it a go, that if it subsequently fails that the idea person isn’t taken to task for it. It is very difficult for a lot of companies to allow this risk pattern to actually happen. While Jordaan has always encouraged innovative ideas, he also supports the principle of ‘don’t fly solo,’ which means new ideas must be discussed with others, to internalise it, kick it around, and improve it.
However the most important task of a leader in Jordaan’s opinion is that of succession. His view is that if you leave, even if you’ve done a marvellous job and you leave a big void, then you’ve failed. He also supports internal succession, and the concept of an insider outsider – somebody who really understands the company, but also has the ability to think just a little bit differently. Jordaan believes that his successor Jacques Celliers, is such a leader.