David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple that you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is RJ Bonga, CEO of MasterCard. RJ is one of the most respected leaders in the world. And he's a classic example of that old saying, when you do the right thing, the right things happen. In fact, that idea of doing the right thing is so core to his leadership style, that he coined the term for it, he calls it the decency quotient. As a leader, it's not enough to have a high IQ or EQ, we've got to be decent to to treat others with fairness and support and respect. And honor Jay's words, is having your hand on people's backs, not in their faces. Boy, do I love that phrase. And it's not just a fluffy feel good thing. The idea of decency really drives growth. It's empowering as employees with trust and accountability. It's ensuring there's diversity around the decision table in order to guard against blind spots, and it's helping his team find ways to make the economy more inclusive, while still delivering on business goals at every turn. RJ shows us that great leaders are guided by decency. And there's a lot for us to learn here. So let's go. Here's my conversation with my good friend, and soon to be yours, RJ Bonga.

David Novak 1:45 

thanks so much for having this conversation with me.

Ajay Banga 1:48 

Thank you, David. It's a pleasure,

David Novak 1:50 

RJ. A lot of people talk about the importance of IQ, and EQ. But you've added the importance of something that I'd never heard of before, which is dq which is the decency quotient. Tell us about it much you're thinking. So

Ajay Banga 2:05 

well DQ is also Dairy Queen, and that's one of Warren Buffett's famous companies. And that's actually where the idea came from, funnily enough, I was ever employee Townhall. And over a period of time, I'd been trying to explain the concept of what I meant by decency to employees. And you know, things come which enable you to make it sound interesting to people. I've seen somebody the previous day, talk about Warren Buffett's investment in DQ. And this IQ EQ DQ mnemonic came to mind while I was speaking. And you know, you've done this in the past, it comes out of you before you think. Well, you know, when I grew up, there was IQ. When I grew a little older people said, you're gonna have EQ if you want to do well. But I think in today's world, what really matters is your decency quotient, meaning, are you behaving like a person who people want to follow, like a person who people want to be with, like a person who people trust, like a person who people want to be around, because somehow, your innate human decency, your behavior, your fairness, your transparency, all the things we consider to be doing the right thing. Those come to the fore. And so it's not enough to be smart. That's the IQ start enough to have a balanced way of looking at things, that's your EQ. What's really important is that you bring your innate human decency, your sense of fairness, your sense of a level playing field, to the party, and you tell people who work for you, you know what, my hand is always going to be on your back and never in your face. And that doesn't mean that I won't give you strong feedback when you deserve it. But you will know where I'm coming from. And you will know I will be fair and transparent. Not just nice to you. And I think it's that's the idea there but it's a it's a way of behaving in a way of conducting yourself, with your people with the values for your company, with your behavior in society with everything you do.

David Novak 4:09 

You know, okay, I absolutely love that concept. Because it's, it's so true. And as a leader, you can't just say something like this, you you have to walk the talk, and you are making financial inclusion, a big priority for yourself and MasterCard. What's this all about? And how did it become so important to you? So

Ajay Banga 4:33 

financial inclusion started out by us tumbling me I stumbled into it years back when I was working at Citibank. And a guy who used to work with us in Treasury and was a very well paid trader basically decided he wanted to change what he was doing, and actually got involved with securitizing small ticket loans for Bangladeshi NGOs really small ticket 50 bank loans. And if you understand the securitization market, people had securitized large ticket loans. So you get them off your balance sheet freed up to lend again, this guy went and mastered the art of packaging and bundling lots of small loans. And when I was talking to him, I got interested in what those loans were for. And they were to help empower Bangladeshi women to do things like you know, become a fishmonger, or sell newspapers, or stuff of that type and become socially and financially independent. And then I started meeting people who we was working with. And I realized that what women do very easily is if you make them socially and economically independent, they will put that money back into improving the lives of their children. And to giving them a better home, a cleaner home, drinking water, better light to work with uniforms to school, a little bit of food. And so what happens is you can a virtuous cycle, she becomes independent, she makes her children better. And you know what, that's the right place to be. And so, I got interested in this, and I got involved with the microfinance efforts at City and I got involved in the city Foundation. And then I left city and join MasterCard and came here with no comprehension that I would bring that with me, I actually had no idea I would do that. I arrived here and found that people have a very focused on winning the battle against other digital payment players, other electronic payment providers. But when you sat and looked at the market, the biggest problem was cash. And cash is something that governments generated to their citizenry, Social Security, voluntary payments, pensions, salaries and the like. And then I discovered that 2 billion people who are financially excluded, and of the 2 billion, a very large majority of them are getting money from governments. And you know, the penny began to drop saying, you want to change the lives of those 2 billion, you've got to get them some form of digital identity. And then you've got to get them access to electronic payments, so they no longer are in the clutches of the middlemen, the guy who helps you get your Social Security helps in inverted commas in South Africa, used to be an agent, who would ensure that they took a cut out of every dollar you were getting, which is really like stealing candy from a wave you're taking from those who can least afford it, you're taking from those who have no way to protect themselves. And you're literally living off the bottom of the pyramid in all the wrong ways. But if you made that transaction, digital and electronic, you took this middleman out, all of a sudden, a little known statistic changed, which is 42% of every dollar that governments give to their citizenry, never reaches the citizen. It's called leakage. leakage in the NGO world, is what you and I would call theft. And so if you can digitize that chain, you take away the sticky fingers of these people who are in positions of power over those who have nothing. That was the idea. And I said, You know what I can use my electronic payments, technology, and digital technology to create an identity and a payment system and take on my biggest competitor, which is cash. And so I can actually make this a part of my business model. And somewhere along the line, I learned that if you don't fight these things, as being part of a sustainable commercial venture, that just isn't enough philanthropic dollars in the world, to solve these problems, need to find a way to make it part of how private sector capital private sector in January, private sector technology comes to the party. If you can make it part of your business model, it becomes sustainable. If you make it sustainable, you got a chance to beat it.

David Novak 8:55 

RJ you've got this vision of a world without cash. So behind this vision, which obviously serves a strong profit motive for you, there's there's a tremendous noble cause to do good in the world.

Ajay Banga 9:09 

Absolutely. And that's why we call it doing well by doing good. You can do both. That doesn't have to be an either or

David Novak 9:17 

how to companies are in how do you find that magic of the end? You know, Jim, Jim Collins writes about that.

Ajay Banga 9:23 

I think you got to look at your own business model for that, which makes a difference. David go back to our time together in the company. We worked. We ran restaurants. We bought everything from potatoes with certain gluten content to chickens of a certain size because those are the ones that fried the best in fryers run by young people who couldn't be trained to be expert cooks. We designed restaurants, we paid them value, we gave them health benefits. We taught them things so we What did you and I do. We said we will make a difference to our employees. And we will make a difference to that. It will be by producer. That was the model in our old company together. And that was a sustainable model for us. If you're Unilever, and Paul Polman has shown this in his time, what's he done, he said, I can take on the use of water in my production, I can take on the use of plastic, I can make the world more sustainable in my own products and prove to my investors, I can do it better. If all Unilever had done was write a check, there is no way that check could have accomplished what Paul Polman and his team did by dedicated leadership. And that's the point I make me every company can find in his business model, the opportunity for sustainable good being done, which also helps their business, you may make a lower return on that in the beginning, it may have a longer gestation period, it may need to be patient capital. But you know, what is still the best aspects of capitalism, coming to the aid of what we need to do.

David Novak 10:57 

You know, you talk a lot, RJ about the importance of finding your personal purpose, what kind of coaching can you give others to do that,

Ajay Banga 11:05 

oh, my gosh, I'm far from the right guy to give coaching, I just know that if you aren't driven, by coming to work every day, because you enjoy doing what you're doing, then I don't know why you're doing it. If you have the choice and luxury of choosing something else, I have the choice of luxury, I was lucky. So my point of view is, I want to be able to do what I enjoy doing. And if if I want to do what I enjoy doing, it cannot be only about my being the best guy since sliced bread to have done A, B or C or get paid more or to be on the following magazine cover. It has to be that you go home in the evening. Or when you meet your family that they look up to you because you're a good person, it has to be because employees look up to you and say, Boy, you make us feel better, because we're around you. It has to be all those things. And that's my personal purpose. But my personal purpose may be different from yours. The point is, you've got to find your own, because that's your Northstar, that sort of excite you. And that's what you live with all your life.

David Novak 12:10 

I just love that. You know, once you find that purpose, which is other directed, it basically leads to more happiness, don't you find that the people that are other directed I ended up end up being the happiest and most successful?

Ajay Banga 12:21 

Absolutely. And by the way, we all make mistakes in the process, right? I mean, you've made mistakes, I've made mistakes, I've made them in my professional life, my personal life. So this doesn't make us clairvoyant, or, or somehow incapable of making mistakes, you care about the mistake enough to try and set it right. And that's the idea. You know,

David Novak 12:41 

okay, it's always fascinating to learn, you know, how leaders make decisions and get inside of their heads. And, you know, I was really curious when I saw, I think it was last year, you actually decided to change your logo, and leverage the two circles. Tell us how you came up with that? What was your thinking?

Ajay Banga 13:01 

Yes, so we actually did a lot of consumer research over the last decade, I've been here and discovered that the logo was the most recognized part of our company, people actually, you know, a little card or on your checkout button on a phone, to in the old days, MasterCard is written inside the two circles, you couldn't read the boundary, because you couldn't see it. But the two interlocking circles that they recognized, that actually was our brand identity, those two circles meant everything to the consumer. And interestingly, David, you'll, you'll appreciate this, the two circles was seemed to be a more recognizable brand. And some of the most iconic American brands that we otherwise grew up with in the consumer world, from the golden arches and McDonald, all the way to the Coca Cola logo. And so I kind of said, you know, we've got this brand, which is actually the circles and not the name. And the name is kind of large and long and doesn't fit. And when you try and read it on a small card, or in a small space on an iPhone, which is where the world was going, it's even less legible. And by the way, because you need to fit the name, you need to reduce the size of the circles. So you're also hurting your brand in its visibility. And so it took the step to say if our people recognizes the interlocking circles, let's go with them. And now we're going a step further, which is, I think, heard commerce. Audible commerce is going to be the next big thing. And so we've developed a audio brand, a sonic brand of our brand, which is actually a signature, which will come every time you use your card. In fact, in New York City's cabs, it's already there. You tap your card or a New York City cab and the sound plays. And so we preparing for the time and you won't see a brand you will only hear it when you use it without any friction by interacting with your Alexa or Siri or something else tomorrow.

David Novak 15:02 

So you're really becoming a symbol brand now like Apple and target and you know, but it also very much drives what you see is the vision for your company going forward.

Ajay Banga 15:13 

Indeed, indeed. So, the idea of being a brand which is, which stands on his look like Nike did right turned out to be that the sush turned out to me and everything. And I think that was the idea that what we're trying to do in the interlocking circles, is to drive the idea of connectivity is to drive the idea of being in it together, is to drive the idea of finding the overlapping spaces that you can find the best magic from, of always saying that you may be different, but in your collective uniqueness, the overlapping area is the magic of diversity is the magic of growth is the magic of common ground. All those are inside the imaginary of the interlocking circles.

David Novak 15:55 

I remember meeting you for the first time when you were at PepsiCo and and you had a beard and you wore your turban and you know, you you were as authentic, you are authentic before being authentic was really a leadership buzzword. Did you have a watershed moment when you decided you truly needed to be yourself? And and why did you find that to be so important? Because you know, you're a part of PepsiCo, PepsiCo was blue suit, white shirt, red tie, you know, you but you really stuck true to yourself.

Ajay Banga 16:28 

I Pepsi embraced me, I never found the company to reject you because of what you look like, or where you came from Pepsi actually was all about what you did and how you did it. Right. And so if you did a good job, you got recognized for it. And if you presented it, well, you got doubly recognized for it. And so I love those those years there. But you asked me a very specific question about a watershed moment. And they you know, years back at Nestle David, I had a boss when I was a young management trainee. And boss as an boss's boss's boss's boss. The guy was the managing director of NASA in India, which for a young management trainee, India was kind of God he was the big guy. guy called Barry, Ron Irishman. And he wants told me, he said, never take no for an answer. Just never take no for an answer. always questioned the conventional wisdom, because people will always tell you how. What you just suggested has been tried earlier. It didn't work. We tried it in Brazil, it didn't work there. We tried it in Calcutta, it didn't work there. Don't listen to them. Give it a try. Take a risk. If you don't take risk, you're never going to know how far you could push the envelope. And he told me he said, connected to that is a sense of self pride. Unless you believe in yourself, how are you going to be this person that I think you're capable of being? Which is the person who won't take no for an answer, he will always push to try something new. So believe in yourself. And I that worked on me, that whole set of conversations worked on me, I still recall it with complete clarity. And I said this to him many times. And I said in public, I think Barry Rand would be the biggest favor by making me believe in myself. And by making me believe that asking a question is not a bad thing.

David Novak 18:27 

You also you grew up in India. And when you look back on that RJ, how did that really impact your leadership philosophy are our principles that you have?

Ajay Banga 18:39 

Yeah, well, you know, India, growing up in India, the infrastructure didn't exist. So the first thing you learned was, if everything, you've got to have a plan B and A Plan C, meaning if you were running a restaurant, you can be assured that the power will go off and your daughter wanted to go off, you can be assured that the system to get water to you will not work, you needed to have a plan B and then you can be assured that that plan B would not work. So you need to have a plan C and I call that the guide to managing through difficult situations. You got to have a plan B and you're gonna have a Plan C, and they have a plan B and A Plan C, you will always come out looking like it's Melrose

David Novak 19:20 

now you spent 13 years at Nestle. Then you went to Pepsi had left after a couple of years because of the spin off that PepsiCo did on the restaurant business. And now you're at Citibank in financial services. How did that happen?

Ajay Banga 19:35 

So that's a really good question. So at Pepsi, when I was involved with setting up KFC in India, I still ran into the gentleman who ran Citibank for Central Europe, Middle East Africa, through a common friend who connected me to him. And he told me that they will Citibank was looking for people With a consumer background, because Citibank's head of consumer at that time was somebody who came from Philip Morris, who basically was trying to drive the point of view that consumer financial services, were a consumer product like any other, if you understood consumer needs, and you cared about satisfying them differently from everybody else, you had a winning proposition. And so he called it instead of share of throat and mouth, you were looking for shadow wallet. That kind of got to me, and I enjoyed that idea. And I met him. And then I got introduced to him to, to his boss, the guy who was who was does this the CEO of Citi. Like I said, this is pretty cool. And that's how I ended up there. And I had a dream run, I spent 13 and a half years there, all over the world involved with consumer banking, corporate banking, private banking, asset management, Treasury, investment banking, you know, it was a mind expanding experience of all the best types you could find. And boy, it stretched me because the one thing Citi had like Pepsi was a bunch of overachievers. And so they pulled you in every direction, they forced you to ask questions, they forced you to believe in yourself. And I loved it. I loved

David Novak 21:16 

you know, you worked for Sandy Weill, who was you know, he renowned financial leaders of this city back, Chairman and CEO. Was there anything in particular you learn from being around him?

Ajay Banga 21:29 

Yes. The ability to connect with everybody, no matter what level in the company, you were, he could connect with you and speak to you, like you were the most important person speaking to him. At that point of time. Here, innate curiosity did. You know I'll give you a an instance, I've met him once or twice in short meetings. And he invited me to what they call the Planning Group, which was, you know, 3540, senior managers, who would meet at every period, physically in cities, our mock training facility. And he invited me to come and make a presentation there about growing in the emerging markets in Central Europe, Middle East and Africa. So I show up. And that day, there were a lot of other invitees, because he had a bunch of guest speakers. So we had 150 people there. He comes in on the floor above sees me on the floor below, across the entire room, through a caravan 50 people, I do stand out a little bit in that room, he comes through the room, straight towards me, across the entire room, meeting people he knew, but came right towards me and said, I am delighted you're in this room, you will make us better for being here. And I don't know whether he meant it or not. But he made me feel welcome. And he reduced my stress of being in that room. And I remember feeling completely connected to him as a result of that. And in every time I met him, he was curious about what I thought he would ask me for my opinion, he would tell me if I was full of nonsense, salt is thought that as though that he didn't tell me when I was talking nonsense, but he would listen. And that listening, that engagement, that valuation of your opinion, that curiosity about you, if you didn't learn that from Sandy, you missed out on a lesson.

David Novak 23:25 

You know, that's a great learning. And as I understand it, RJ, you were on the fast track at Citibank, you know, that you were actually told you were going to become the next CEO. So what was it you know, this, you know, city, you know, huge opportunity, you've got this burden a hand? What was it that made you want to move to MasterCard?

Ajay Banga 23:46 

Well, what they told me was, I had a really good opportunity to become the next CEO. Nobody guaranteed anything, right? Companies, you know, don't do that. There's a said that a good guy, you're the top of the list, you could be the next CEO of this company in a finite period of time. And so that, that didn't nobody actually promised anything to me. Meanwhile, this is soon after the financial crisis, I was turning 50. And you know, men, when they turn 50, always take a deep look inside and say, Have I done all I wanted to do? It's something about us guys, it's our DNA and our makeup, right? And I remember saying to myself, so do I want to spend the next 10 years of my life involved with banking, soon after the financial crisis, when I sell, the industry will essentially spend a lot of time trying to restructure itself, reconstruct itself, and always be judged, whether rightly or wrongly, for the way the public thought that its actions were during the lead up to the crisis. And I said, You know what, that's interesting. But here's a chance to work in a much smaller company, where I can get my hands around my employees adequately, to make a difference to them to change culture or drive the The future in technology in payments in the space of data. And by that sounds interesting. And so this is actually a fundamental life choice about, Do I want to be for the next 10 years in what I thought would be a growth, new tech kind of industry? Or would I be in an industry where even if I did my very best, if I tried my very best, I would still be judged in the altar of public opinion based on what people presume banks have done prior to the crisis. And I'm telling you, I still believe that, yes, banks made mistakes. But boy, they were not the only ones who led up to the financial crisis, many things caused that. And I think that aspect of it would have been an uphill fight for the next 10 years of my life, when I came here. And now I look back on the status my 11th year in the company, and look back as the best thing I

David Novak 25:53 

did, did you have a personal experience as a customer trying to get credit that, that shaped your thinking as you went into the job? You know, a lot of times people have something that they say, Hey, listen, I want to, I want to try to fix this, if I get in and get a shot at this, No, I

Ajay Banga 26:10 

haven't experienced getting credit in the United States. When I moved to the US with Citibank, back in 2000, I was the middle senior kind of manager and I had no credit history in the US. And I couldn't even get access to a cell phone, or read low rent an apartment. So that was pretty traumatizing, in many ways. But I knew because my years in banking, that the credit decision was not a MasterCard decision. So that wasn't what got me excited about MasterCard. What got me excited about MasterCard was actually the technology and the fact that I totally get a chance to get into, you know, at the ground floor, into an industry that was just beginning to move. And in the space of technology and data. I just found that interesting. I'm half a geek anyway. So

David Novak 26:56 

well, you've taken that interest and really put it to good use. And as you evolve and grow as a leader, what do you think, RJ is the biggest skill you have to develop to really take it to the next level?

Ajay Banga 27:10 

Well, I think leadership is all about your people, your people, the people leadership, the privileged, you know, if if you're an individual contributor, or you're working for somebody, every time you look up to somebody, when I worked in Pepsi, I looked up to you, I would say, they would give me guidance. And if you didn't give me guidance, well, then what kind of a leader were you? Right, and so every individual looks up to their boss or their boss's boss for guidance and help with a challenge. And so leadership is a privilege. And when you become a leader, you've got to repay that privilege, to your people, your people are kind of their creativity, you know, their their innovation, their ideas, their diversity, that's your, that's your energy, that's your rocket fuel. And your people are your are your engine of growth. So I think leadership is all about your people. It's all about comprehending the humility that you need to have to recognize that leadership is a privilege, you get that right, everything else falls into place.

David Novak 28:16 

You know, if if you think about your leadership journey, was there a particular skill that you had to get better at as you became CEO and continued to, to march forward? Yeah, I

Ajay Banga 28:27 

mean, I think taking risks is something that you do throughout your life. But when you get to the top of the pile, those risks are uniquely yours. You know, before that, you had someone to talk to whose approval you got, before you took the risk. So essentially, you were in it with somebody else, we near the top of the pile, everybody who comes to you is got something they're trying to sell you, in your company, they're trying to give you an idea of how this is the best thing to do. You got to make the trade offs, you got to make the allocations you got to take the risks and, and really, it's your call to make. Finally, it's what you live with. And I think the ability to comprehend those risks, and not be frozen by them, but to take thoughtful risks, and take them in a way that keeps your competitive paranoia, buying in the center of your thinking, while at the same time realizing that you're going to be accountable for that risk doing that the right way. I think that's a pretty unique experience.

David Novak 29:31 

Do you have a process RJ that you use to to gauge risk and take risks?

Ajay Banga 29:35 

Yeah, well, I look at issue, a topic comes to me, I will try and understand it, then I'll try and create metrics around it. So what am I looking at? What's the way in which I can evaluate whether this thing if it does this, it's successful? And if it doesn't, I took a bad risk and what is the downside risk of it's why I first try and internalize it in me, and then I try and get the metrics around it. And then I try and get to a conclusion from that. That's my process. It's not, it's not rocket science, it's got a little bit, it's metrics after that. And then those metrics get applied to the different options I have. And then I take a decision. And I'll take as much input as I can, at that point, I listen to anybody who will walk into my room, and tell me that the sky is green, blue, or yellow, and then try and see what the idea is.

David Novak 30:24 

You know, you mentioned competitive paranoia. I liked that phrase. What does that mean to you? I know what paranoia means. But I mean, how do you take that phrase and give it meaning to your organization,

Ajay Banga 30:36 

I think you've got to always be a little scared of the other guy, you've got to always be a little scared of your own complacency when you're successful. You've all got to always be questioning yourself, Could I have done this better? Even if you did really well with it? You've got to always be saying, bye, What mistakes did I make here? And can I avoid them next time? Knowing that you probably won't succeed? 100%? That's what I mean by competitive paranoia. Question everything always figured out? Is there a better way to do it? Or at least try and figure it out? And that angle of am I missing something? You know, it's what now kids called FOMO. Right? The fear of missing out, you've got to have a little bit of that inside you, I think, to be a successful leader, a little bit of competitive paranoia is Gutfeld.

David Novak 31:28 

What scares you about the competitive environments you face today?

Ajay Banga 31:31 

Oh, that I'm always missing something out that I have somehow not. You know, it's such a the digital world, David has removed the barriers to entry into many industries. Earlier, if you were the incumbent, you had scale, you had reputation, you had brand, you had distribution strength as the barriers to entry. You know, what the digital world, the internet, it's taken all that away, by the way, it's good, it's good for new companies to come in. It's good for innovation, it's good for creativity. And by the way, it's really good for the incumbent to stay on your toes, because all of a sudden, people can nibble at you all the time. And to me, that is what keeps me up, I keep thinking about that as the lower barrier of entry, meaning there's some two people right now designing something somewhere, where they're trying to find a way to either reduce my ability to price, or my ability to be a good player, or disintermediate me in some way, or change my brand perception, it just have to be that way. Got to be that

David Novak 32:35 

there's so much innovation going on and so many people trying to disrupt each other that makes total sense. And, you know, speaking of innovation, this is another one of those concepts that every leader in the world seems to talk about. But what do you do, RJ specifically to make sure that it happens at mas MasterCard, because you have really developed an innovative company.

Ajay Banga 32:56 

So I, you know, I think three or four things come together, I don't know that I can prioritize them for you as well. So let me just give them to you in an order of consciousness. So the first one is, the most important aspect of innovation is knowing that you don't know at all. So I by you, I mean, not you personally but I mean the people around you the company the way it is today, because just because you did it right to get here, doesn't mean you're going to do it right to get there. And therefore surrounding yourself with people who have different experiences, different backgrounds, different education, worked in different companies, went to different kinds of schools did things differently, that aspect of diversity, that you bring people around you a different view, I think that is the single biggest contributor to my feeling that I can succeed in innovation. Because they're going to question me, because otherwise, David, if we let's say you and I worked together for 20 years, and I came to MasterCard, and I brought you along with me. Well, guess what, of course, we'll be comfortable with each other. And of course, we'll trust each other. And of course, I can rely upon you and you upon me. So those are all good things. The problem is, we will probably both have the same blind spots, we will probably both miss the same new tramps. We will probably both not realize how we could get disintermediated because we've all come from the same background. And so you need to have people around you are differences. And so to me, diversity and innovation are two sides of the same coin. That's the first. By diversity. I mean, not just ethnic or religious or gender or sexual orientation. But everything about you where you grew up, what you did, what school you went to which companies you worked in, what kind of social work you've done, what books you read everything. So that's one second. You have to be Be willing to take a risk with these people. So, you know, we created something called MasterCard labs very early in my career, which was headed by a guy who founded a company we've bought. So he was very innovative. And I told him, there was guidelines. And I said, Gary, here's your budget for the year. And guess what? Nobody, other than me can change it, not by CFO, nobody else. Because you know, where people go, when you have quarterly pressures and annual pressures, they go to marketing, and you go to r&d, and you hit those two, and you damage the future of your company. So I told him, nobody can change it. This is your budget. And by the way, I don't need a spreadsheet to justify the project you're working on. Because you will change assumption, on page 20, row six, column seven, and the ROI from the project will go from 2.2% to 22%. And I would note, so I'm not interested in your spreadsheets, you can waste the money, don't drink Guinness, all day long. He was Irish, lived in Dublin, do whatever you want. But at the end of the day, in two years time, if you don't give me commercially sustainable couple of innovations, I will get rid of you and the entire team that works with you, and start again. That'll get your attention. And I'm telling you, I never needed to have that conversation again, not him, not a successor guy called Tim Moore, who, by the way, is also Irish, and lives in Dublin. And the entire team they have, I have never needed to have this discussion because they feel the power of the empowerment. But they also feel the accountability of that empowerment. And so this idea of diversity and innovation, and empowerment and accountability. I think drive innovation and unique ways embracing that drives innovation in unique ways, what

David Novak 36:58 

ideally you have right now going on at MasterCard that you're most excited about.

Ajay Banga 37:03 

Oh, so I think everything to do with three spaces. The first one, everything to do with the blockchain, and all the things we're doing in the blockchain from proof of provenance to prove that the shirt you're wearing was actually made a Gyptian cotton, or that the shrimps you ate for lunch actually grew in an organic farm outside of New Orleans, or that those diamonds are not blood diamonds, or that these pharmaceutical medicines are genuine, and have not been placed into a salvage bottle from a junkie, that kind of use all the way to Central Bank, digital currencies. And what those could do every aspect in between, I think that's one of the most interesting spaces. David, today we are among the top few companies in the world that hold blockchain patterns. Were the top company holding patents and central bank digital currencies in fiat currencies. And that's not an accident. That's because people like Ken Moore and his team have invested in that space. So that whole space is just interesting, I have no idea whether we will make money ever, in that space, I have no idea whether this is a technology looking to solve a problem that people do not perceive. No idea. But it's really interesting. That's one. The second one is changing the way that businesses pay each other, both domestically and cross border. So when you ran, yum, think of how many suppliers and vendors you have. Right from the franchisees were partners of yours, all the way to the people you bought produced from all the way to the people, you bought utilities, from all the way to your digital vendors, to your advertising contractors to everything right, you had 1000s of vendors cross border domestically, and if you go back to how inefficient that processes of raising bills of reconciling them and obtain them. And this was Yum, a big company, organized company. Now let's go down to medium and small sized businesses. And it's a nightmare for them, to reconcile bills to pay them to get their money on time, and the like. And so I think that the entire b2b payment space is ripe for change is ripe for disintermediation in a good way, in a constructive way, in a way that gives people money back quicker than they get it today. So that's the second big area we're working on. And the third one is everything to do with security and digital identity. So David Novak, goes to Philip gasoline in his car. He also wants to get the car wash. And by the way, pick up a Diet Coke or use coke from inside the from inside the convenience store right? And you don't want to keep pulling out your car or your phone to pay three times you want the system in that cell station to read recognize that it's David Novak his car, and it's him, you need a digital identity, that safe and secure that protects your privacy. Or David Novak ordered alcohol on the internet. And now this guy shows up from FedEx delivering it to your door and wants to know that you're above the age of 21. So you give him your driving license, he takes a photograph of it, because he's got to send it to FedEx as proof. Well, guess what, now he has your photograph. He has your exact date of birth. He of course knows where you live, he has your full name. And he knows which kind of vehicles they're allowed to drive. There is way more information that ticked the box is David above 21. So if I could find a way to do a decentralized digital identity, where I never keep your information, but I go to the places it is and bring it back and say, Hey, FedEx, I'm a trusted provider, this guy is above 21. And he is here, go away, you're safe? Wouldn't that give you back your privacy? So that's the third space, I'd say, Blockchain digital identity, and this whole b2b space, these three are just very exciting.

David Novak 41:08 

Now, that is exciting. And good luck. You know, I can't wait to see all ideas that are gonna be coming our way. You mentioned earlier about your Unilever partner who who basically said never, never take no for an answer. What do you think has been the biggest obstacle you've had to overcome? And how did you do it?

Ajay Banga 41:29 

Yeah, over the years, I think the single biggest challenge, funnily enough, was at Pepsi. When we were opening restaurants in India, we were at the cutting edge of multinational corporations entering that kind of space. PepsiCo beverages itself was a relatively new company in India. Because when India reopened is when Pepsi came back in and they were getting getting the Indian social system, politicians, lawmakers, opinion leaders, journalists, writers to understand that we brought value that we brought better farming techniques that we brought better poultry management techniques, that we paid better, that we taught our people how to manage things better, that we raise the bar on standards of quality of whatever we did. And so we deserved to be there, not because we were Pepsi, but because we did good for India and IT system. That's a lesson that I carry with me even today, I learned a little bit of that at Nestle, because Nestle embedded itself as a local company in India. And I tell our people all the time, we are maybe a global company, but we have no birthright to be in a country. Where there because the country wants us to be there, because we solve problems for them. And so being Glocal meaning, being global, with the best of global, but adapting it to being local, because that's what makes the difference. That the magic of managing that the inherent contradiction of managing that is kind of what I'm still learning. I don't think I've solved it. I'm still learning

David Novak 43:12 

everybody's working on now. And a lot of people say, you know, be global act local, but it seems like you're trying to make it a reality. And it's hard.

Ajay Banga 43:22 

It's very hard, because we know that what's the advantage of being a global multinational? It's your scale. It's your standard operating procedures. It's the methodology that allows you to get to that scale and a winning playbook. Right. But if you do that, without sensitivity, if you do that, without respect for what's required on the ground, I think that's a recipe for not succeeding. And so the pools of pressures, the inherent contradictions of that life's all about managing contradictions, right? So diversity and innovation, empowerment and accountability, curiosity and being focused

David Novak 43:59 

it you know, you're a very popular leader, I understand internally. And you kind of went out of your way a little earlier on to say, hey, look, you can be decent, but you can still hold people accountable. You know, you talk about doing good and do you ever get a little you know, does it ever get underneath your skin a little bit that people might be taken advantage of you because you're a good person and you want to do good to people? See you. You don't want to be seen as some softy?

Ajay Banga 44:26 

Nonsense, really? Actually, that's a really good question. The one thing I make a lot of effort to explain to our people is do not miss understand decency, or the hand on your back not in your face, to be kindness or niceness. You can be kind as a human being. But being nice is not your job as a leader. Being fair is your job as a leader giving feedback is your job as a leader. giving guidance is your job as a leader, laying out the guideposts to measure success and then celebrating success. He's got a job as a leader, taking credit is not your job as a leader. That to me, this is hard. David, I, I can't tell you, I've cracked it. There are moments when you when you forget it, no matter how well you're doing, and you've got to be careful. But if you talk to people who work for me, they will tell you, I can be reasonably direct in giving feedback. And as I was laughing, and looking at Jennifer sitting here with me, she's got feedback from me, and but she knows this for sure, she's safe with me, she will know exactly where I stand, I will not speak about her differently behind the back, as compared to what I will tell her, I will tell her what I think she needs to do well. And, and when I mean, when I what I mean by hand on your back is a level playing field, my job is not to promote her to this job, because she's a woman. But my job is to give her a chance to win, and then let her run. And if I let her run children. So it's not an easy thing to do. For guy who himself is diverse, I find it easier to say this in today's environment than a straight white male would find, which is diversity does not mean giving people an unequal benefit. It means giving them a level playing field, it means raising them from inequality to a level playing field. That's what diversity means. And you know, it's a hard balance. If you get it wrong very easily.

David Novak 46:30 

You brought this up yourself, you know, you're obviously a person of color, and you're very passionate about diversity and inclusion. How has been a person of color impacted? How you approach it?

Ajay Banga 46:44 

You know, honestly, I mean, right now, what's going on in the United States disturbs me greatly. Because the problem with what's going on right now with the issue with African American equality, is that it's not new. It's not one time. It's just keeps happening. And every time it happens, we all say the right things. And then guess what, we go back to our lives and it happens again. And I think that to me as a diverse person, David, that's the hardest thing. I remember being stopped by a cop in London. When his car mirror and my car mirror on a narrow street touched while we were navigating past each other. He chased me stopped me this was a guy to blame towards pulled out his badge, took me aside for a breathalyzer test. But thankfully, in the UK, when you do a breathalyzer, your boss or somebody else has to come and breathalyzers done on the other car too. And guess what the cop failed the test. And I passed. And I got a letter from the police department asking me to file a complaint against the cop. And, and so yes, in a way, you know, I felt vindicated. But I felt very small when I was stopped in front of my wife and two of my friends for a mistake I did not commit, but which I was pre judged for. And so it didn't happen to me myself. But this is not. This is not something I've read about somebody else. And so the problem is that what makes me really sad is that it hasn't gone away. That problem exists that I had this after 911, where I've had people mistake me for Osama bin Laden, and threatened me in the United States. But here's what keeps me going. For every one person who says that to you. There are 999 other people who believe that that one person was wrong. So the question is, can you find your way as a diverse person to the 999 and bring them on your side, so you can try and change the future? And that's what I'm trying to do. That's what informs my behavior. I embrace people who understand that the one is wrong, and the 999 are right, because I need that power on my side. Because I cannot win by myself.

David Novak 49:10 

That's very inspiring words, very inspiring. You know, RJ, how has COVID-19 Just shifting gears here a bit affected MasterCard, and, and how have you led through the crisis?

Ajay Banga 49:25 

Oh, it's affected everybody on MasterCard as well, David, first of all, it's vectored our business because, you know, people aren't spending the way they used to for a while, right? Remember that? How in the containment says of the crisis when we were shutting everything down, basically consumer spending and b2b spending was falling off a cliff. Then we came to a stabilization phase kind of the bottoming out. And then I think now we're in a little more normalization around the world. Now normalization is a loose word. I don't think we're back to normal for mass entities. payment or cross border travel. But people are spending more in restaurants and eating out and drinking more or going home improvement or hairdressers and clothing shop purchase or dry cleaners that's coming across. But eventually we need to get to the growth phase, that's only going to happen when we get a vaccine that's widely enough distributed, which I think is still some time away. So like everybody else, we're managing through these four phases, as a company, cross border travels, gone to zero, effectively. But many other things are in our favor as a company. That's the first thing. Now it impacted our employees, it impacted their families, it impacted their lives, you know, we had to shut down offices where we had to by law, where they weren't required by law, we gave people the choice of working from home, 90 plus percent of our employees are working from home. We're just in the process of reopening offices in a number of places, including in Westchester, which has now gone into the second and third phase of reopening. So hopefully, this office will reopen in a bigger way over the next week or two. But it impacted everybody. And if you're David, it's very easy for somebody like you or me, who's been fortunate in our lives, to do financially well, to say, hey, I can work from home forever. Yes, you can. Because you live in a good home, probably on a lake, you have a tennis court and a pool, and you don't get in each other's way. Even with your grandkids and kids in the house. You live in a smaller apartment in Manhattan, or Singapore, or London, or Mumbai or Pune. And you've got your spouse, a child, a dog, and maybe a mother in law. And you're all trying to work from home on not great bandwidth. That's a rough life. And so making them feel that this intrusion in that private place is not really an intrusion. Or we'll find a way to make them comfortable, will find a way to make them work from home, so long as they feel that is the safest and best way for them to work, and then come back to work in an office with enhanced flexibility for their own personal needs even more than they used to have earlier. That is what we're trying to do. On a third basis. We're trying to do things with society and customers. So they will be we created and we long with the Gates Foundation, and Wellcome Trust, we jumped on to a therapeutic accelerator, we raised on $25 million, at that time now close to 300 million to find an accelerate a way to get a therapeutic cure for COVID-19. We're doing things for small businesses, we're doing things with our data, and our technology in cities and states and federal governments around the world. We're doing things with customers to help them manage fraud and how to come back when they reopen their airline or their store. I mean, there's a ton of things going on. But it impacts people first and then impacts businesses second. And so you've got to find a way to manage to navigate your way through all that.

David Novak 53:06 

I imagine that the trend towards contactless payment is going through the roof

Ajay Banga 53:09 

it is so those are growing handsomely. And in fact, in the United States where people haven't embraced contactless payments early in the cycle, right now, they're growing at 50% of what they were last year. But in other countries, they're even better embedded. Australia, Canada, you know, Poland, Turkey, other locations, but getting contactless payments and digital technology and data and cybersecurity. And those are the things that are booming right now. But none of those would have worked if he couldn't have made our employees feel that we understood that problem. You know, David, we went out very early, after the crisis and told our employees, there will be no layoffs because of COVID-19 in 2020. And as the company we could afford it, I guess we you know, it will impact our expenses. We have got impacted on revenues. But we're still a profitable company. We're still not a solid balance sheet. We are lots of cash on hand. I don't want to add to society's problems. We don't need, we can come through this. And so we told them, Don't worry about your jobs, worry about your family, worry about your customer, wherever your self and your health, but don't worry about your job.

David Novak 54:27 

That's great. Hi, Jay. This has been such a fascinating conversation and it's a lot of fun, and I want to have a little bit more fun and I want to ask you a quick lightning round of questions. Sure. Okay, that people can get to know you even better. First of all, I I think they might know by now that you're a little bit of a passionate guy here. Okay. But let me ask you something. What three words best describe you.

Ajay Banga 54:50 

Sincere? Very fair, and opinionated.

David Novak 54:56 

If you could be one person for a day, who would it be and why?

Ajay Banga 55:00 

If I could go back in time, I would have loved to be somebody like Nelson Mandela and Mahatma Gandhi, just get a chance to see the world from their eyes. I would have loved to but that's the privilege somebody like me ain't gonna get. So in today's world, I'd love to be Lady Gaga.

David Novak 55:18 

Why are you such a big fan are just

Ajay Banga 55:20 

like yours that I think she's sassy? I think she lives a life the way she wants to. I love her music. I think she's inspiring.

David Novak 55:28 

What's something about you only a few people might know.

Ajay Banga 55:32 

Although when I was much younger, I used to play the drums.

David Novak 55:35 

And do you have a hidden talent?

Ajay Banga 55:39 

No. My kids would laugh at that question. That's probably my talent.

David Novak 55:47 

You know, you're about to hand over the reins as CEO, and you're going to become executive chairman. When you look back on this over 10 year stretch. Now, what would be the single biggest accomplishment you're most proud of?

Ajay Banga 56:02 

I don't know, I'm not a good legacy guy.

Unknown Speaker 56:06 

I think

Ajay Banga 56:08 

I would love people to think that while I was around, they had a lot of fun. The company was a lot of fun to work, that we had problems and challenges, we had a lot of fun. And therefore it is fun to come to work. And therefore it's fun to be here. And therefore they look back with some of the joy that I think that fun and joy angle of working. That to me is good.

David Novak 56:35 

I think it's funny, because it's the soft stuff that really gets the hard results in the end. And you're a classic example of that, what would be the three most important bits of advice you have for aspiring leaders,

Ajay Banga 56:49 

oh, take risks with your career. Because if you over plan your career, you're gonna miss opportunities, for sure. Second, be as humble as you can be, because remember, Life is 50% luck. If you happen to grab your luck, while it's going by you, you're gonna think you're a rock star. In actual fact, you just happen to grab the 50% correctly. And so just be humble about it. And the third one is what I was telling you earlier, just recall that you're only as successful as your people. That leadership's a privilege.

David Novak 57:24 

You know, final two part question here. Do you have any daily routines that keep your energy where they need to be so you can make your very best decisions? And what perspective can you provide on on work life balance.

Ajay Banga 57:37 

So those two are actually interconnected? Because I was going to tell you, one thing I've tried to do over the years, to make sure I have the light work life balance, because work life balance, you know, the best way to get work life balance, is to enjoy your work and enjoy your life is then everything feels in balance. But if you don't have fun at work, and you only have fun in your life, outside of work, because what's life life is worth and outside of work, somehow work, life should not be too antagonistic things. Because work is part of your life. And so you got to enjoy your book. And so one of the things I've tried to do, and it's a personal rule is that I when I go out in the evening with the family, or on a weekend, I don't take my iPhone with me, it's actually true. I don't take the phone. And most people find that shocking. But you will find me sitting in a restaurant, my wife and kids and friends on a weekday or a weekend, and I won't have my phone. So somebody says, You free on Tuesday, I have no clue. Because the calendar isn't there. And my attitude of that is that that phone, you start paying attention to that you got to pay attention to who you're with, for the quality time of that moment, because that's the fun of your life and your work. But so my one routine, is have fun, and engage in what you're doing. Because otherwise, what's the point? Why are you doing it?

David Novak 59:01 

That makes sense to me. This I have to tell you, RJ has been a priceless. And I want to thank you so much for being so open, so transparent and being you. And it's very easy to see why you've had such enormous success as a leader. And I wish you all the best.

Ajay Banga 59:21 

Thank you, David, thank you very much. And thank you for giving me the opportunity to be a part of this

David Novak 59:35 

Well, the thing about decency is it's got to be real. Treating people with fairness and respect has to come from the heart. And RJ sure is the real deal. He comes from India, and he continues to wear his turban into every meeting that he goes to because that's who he is. He celebrates his heritage and his religion. And he stays true to himself. You know, RJ said something in our conversation and I think it really gets at the heart of why he leads the way he does. And it's this. He sees leadership as a privilege, something that he's truly grateful for. So let's tap into that mindset this week as part of your weekly personal development plan, take 10 minutes and answer the question. Why are you grateful to be a leader? Why is leadership a privilege for you? As RJ says, When you get that right, everything else will fall into place. And he couldn't be more right about that fact. So do you want to know how leaders lead? What we learned today is the great leaders are guided by decency. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world, I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be