What I learnt in 90 minutes with Dato’ Sri Nazir Razak

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“How do you compete when you’re very small? Pick a niche,” Dato’ Sri Nazir says. (Source: YCM CEO SERIES 50.)

By Alice Hunter

It was a recent rainy Wednesday night when Tai Zee Kin, master of ceremony of the Young Corporate Malaysians 50th CEO series, took about 10 minutes to introduce Dato’ Sri Nazir Razak – a personality that needs little introduction.

As CIMB Bank’s group chief executive and managing director, Dato’ Sri Nazir is quite used to being in the limelight. But he was clearly amused at the lengthy description of his education and career history, which includes a Master’s degree from Cambridge and his rise through the rank and file in his 25 years with CIMB.

He later admits that he generally declines such invitations, because he “always gets into trouble when (he) speaks in public occasions”.

Nazir’s 40-minute talk and 50-minute question and answer session was predominantly about the CIMB story from its early days as Ban Chiang Bank, but what was more interesting was what he believed were the elements of success. Here are some of his gems:

  1. Find your niche

When CIMB (then Pertanian Baring Sanwa) was bought over by the Bank of Commerce in the mid 1980’s, they were relatively small compared to other banks in Malaysia. However, they decided that they are going to do one thing well, and that is listing companies on the stock exchange, Nazir says.

This has led the bank to grow its strength in investment banking before any other banks in the country did. Today, CIMB is Malaysia’s second biggest lender after Maybank and one of the region’s top investment banks.

“How do you compete when you’re very small? Pick a niche,” Dato’ Sri Nazir says.

  1. Learn to anticipate and innovate

“When building businesses, power lies in the ability to anticipate and read the future,” Dato’ Sri Nazir says.

He explained that emerging markets are very lucky as they could look at developed markets and anticipate future trends. It was this observation that made CIMB diversify its strength in the equities market and develop its highly successful corporate bonds business.

“In emerging markets, you can innovate by just learning from others,” he says.

  1. Everybody fails

Although CIMB has been successful in listing other companies, its own listing did not go so well. For three months since its debut on the KL Stock Exchange (now Bursa Malaysia) in 2003, its share price stayed around its listing price of RM1.75.

“We did something crazy. We decided that the only way we could the attention of investors again is to do something crazy,” Dato’ Sri Nazir says.

After three months of listing, CIMB declared a huge dividend to shareholders on the premise that they had too much capital. Because of the attention it regained, the bank had another chance to go back to the investors and present their strategy for capital management

“Life’s test is about how you pick yourself up,” Dato’ Sri Nazir says.

  1. Align your strategies with megatrends

As businesses do not exist within vacuums, it is important for those who run them to understand the global, regional and local headwinds that will present challenges and opportunities.

Megatrends that are influencing businesses in this region include the global economic rebalancing towards Asia, and trade pacts like the ASEAN economic community. The banking sector itself is evolving into the era of digital banking while adjusting to the aftermath of two recent global financial crises.

“When you plan you always have to look at yourself in the mirror, and look at the future,” he says.

  1. Protect your integrity

When it comes to running a company, values should always be placed before key performance indicators. Everyone and company should pick values to live by and integrity should be one of it.

In Dato’ Sri Nazir’s words, “KPI’s are good. But sometimes it is better to not have KPIs than the wrong KPIs”.

  1. Politics often beats economics

Business decisions are not just about the economics. Many great deals have fallen through because the political climate in the space was not right for them.

That is why in many parts of the world, especially in emerging markets, politics needs to be taken into account when making these decisions.

  1. Learn to make the most out of what you have

When asked whether his being a former Prime Minister’s son has given him an added advantage in life, Dato’ Sri Nazir admits that he does not know whether it helped.

“I do know that I joined (CIMB) in 1989 at entry-level, and I worked very, very hard,” he says.

“You have to judge me based on what CIMB has done,” he adds.

Even when Dato’ Sri Nazir feels that some people may make it easier for him when they recognise his name, he felt that it’s not about getting in the door. “It’s about what you do in the room,” he says.

In the end, it’s about making the most of what you have.

“I think it’s true to say that it’s about doing the best with the hand that you’ve been dealt with. Those are the winners,” he says.

Dato’ Sri Nazir (right) at the Q & A session during last year’s Global Malaysia Series event. Next to him is PEMANDU Chief Executive Officer Dato’ Sri Idris Jala.

Dato’ Sri Nazir (right) at the Q & A session during last year’s Global Malaysia Series event. Next to him is PEMANDU Chief Executive Officer Dato’ Sri Idris Jala.

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