Tales from the Field: Hard-Won, Battle-Tested Strategies for Overcoming Obstacles to Move Your Business Forward

Leaders from across the industry share how they devised strategies to overcome obstacles—personal and professional—to move their businesses ahead, amplifying their leadership skills and improving desired outcomes.

Transcription: 
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Kate Berry (00:08):
Welcome back to the afternoon panels. I hope you enjoyed lunch. My name is Kate Berry. I'm a reporter at American Banker and I'm kicking off the afternoon with a panel of longtime bankers who have all been in the trenches of the financial industry in a variety of roles. Two are bank CEOs and they're going to tell their stories about overcoming obstacles, both personal and professional. So the title of this panel is very catchy. And we're going to hear stories about how these bankers were able to move forward with a seemingly intractable problem that was very hard to solve and how they solved it. So let me introduce our panelists. Next to me, Racquel Oden is the US Head of International Wealth and Premier Banking and the US Head of Global Private Banking at HSBC. Jill Castilla is the president, CEO, and vice chairman of Citizens Bank of Edmond in Oklahoma.

(01:11):
And for 11 consecutive years, Jill has been one of the 25 most powerful women in banking and women to watch.

(01:23):
And Wendy Cai-Lee is the founder and CEO of Piermont Bank, which is based here in New York. It's the first digital commercial bank and the first multiracial minority depository institution. Congratulations on that. So I want to start off first with a question that really is on everyone's mind, and we're going to get to the meat of this in a bit, about the economy and banking and uncertainty that's going on right now. I think we all want insight into how the economy is doing and what the general vibe is in banking. So I'm going to start off. Racquel, do you want to take that?

Racquel Oden (02:06):
Okay. Well, good afternoon. Thanks for spending some time with us, but I think you're right to start with this particular question. So if I were to give you my reaction to the current economy and the state of where things are, I would say it's a tale of two cities. And the reason why that is, is from an economic market standpoint, unbelievably strong results. Record high in the stock market, record corporate earnings happening as we speak. Most corporations are very cash rich right now, which really means it's going to be a really good market for M&A and IPO. We also had the government benefit of the corporate tax that they weren't planning on. So I would say economy from a corporate market standpoint, super strong. Now let's talk about the individual, hence the tale of two cities. As we think about what's actually happening from the standpoint of a government shutdown, what that does overall to GDP, and it's already starting to have some impact.

(03:09):
We also want that to be resolved pretty soon. You also think about inflation. Inflation continues to tick up. We still have unresolution on tariffs and things of that nature. Costs are going up. Goods and services are costing more for the individual. We're anxiously awaiting those additional interest rate cuts, but again, that's really going to be helping very minimally, but does help what I call the individual consumer. Also, unemployment is ticking up. So if you think about why I say the tale of two cities, investing in the market is really importantly strong, doing extremely well, especially equity markets, continuously resounding results. But as an individual person, the economy seems pretty slow. Consumer confidence is low. You have a lot of uncertainty, obviously, left from a geopolitical standpoint and an administration that keeps making lots of unusual decisions that it's hard to interpret. So hence my answer. Tale of two cities.

Jill Castilla (04:06):
Wow. That's an amazing recap right there, Racquel. Yeah. I think the contradictions right now in the economy, it seems like we're always living in unprecedented times and these are unprecedented times. At the high level, both from an income standpoint as well as macro level and economic conditions and corporate M&A activities or willingness to expand. It's just so robust right now and doing quite well, but the income gap is really widening and we're seeing that middle class weakness and there's some struggle that's happening out there and concern. Inflation, although it's slowed down, prices aren't going down. So we're seeing small businesses that are having to get really creative in how they maintain some type of market gap in what they're able to charge and what the goods are costing them. But I think there's still optimism. This is one of the longest shutdowns that we've had and we're not getting nearly as many calls as you think we would in these type of conditions.

(05:11):
Our bank, we serve our local community, but we also have a global military focused bank, which the military community is directly impacted by some of these changes. The administration came in and covered paychecks for some personnel and that was really helpful, but we're not seeing as much anxiety as you normally have seen in these types of conditions. So I think there must be some type of optimism that we're going to get some resolution soon. We also in the center of the country have really low unemployment still. Oklahoma City is just still booming. The state is really well positioned and we are still seeing a lot of influx of people moving from the coast into middle America, into Oklahoma, into Texas. And so that migration also has made it where there's a lot of geographic distortion in how the economy is going on the coast versus in Middle America.

Wendy Cai-Lee (06:05):
Just to piggyback off of what Jill and Racquel said, Piermont focuses on small and lower middle market customers. And I think there's a bit of a false sense of growth and security going on, meaning that because the equity markets have been so strong, even at the individual level, if you look at your 401k and you look at your savings accounts and trading accounts, it's very healthy. It's looking quite robust. So I do think that provides a little bit of an inflated, perhaps not false, but inflated sense of security in terms of people's wealth and what they can afford and how they want to spend their money, which in some ways is good, right? It's a machine. People feel good, then you keep spending, consumer spending continues to remain strong, and holds up our economy. But what happens when the music stops?

(07:07):
Because the equity markets have not been performing in a very logical way to a certain extent. All good. It's all on the positive side. So there's that. On the small business, to me, over 80% of the US economy is small, mid-sized companies. It's not the GEs of the world. That's over 80%. And as a lender to these businesses, we have not seen growth, meaning I have not seen a meaningful percentage of companies from small to growth to midsize or midsize grow to larger. And we're not seeing meaningful increases in the number of real new businesses sustainably actually surviving and growing. So to me, that is a concern from my end.

Kate Berry (07:59):
Wendy, just to follow up, how does that compare with other periods in small and mid-size?

Wendy Cai-Lee (08:06):
Usually it's more correlated than right now. Going back to the tale of two cities, there's a lot of disconnect and lack of that normal macro theory type of behavior that makes it really difficult to forecast and predict, honestly. If you look at commercial real estate for any one of you in the audience that's either directly in the origination role or even in the portfolio management role, things are just quiet. There's a lack of volume and transactions taking place, which is not a bad thing because we also don't want to see things go bad, meaning portfolios go bad, but the lack of activity always makes me a little nervous. Sure.

Racquel Oden (08:52):
Can I add to that just quickly? So you're right on the lack of activity, but to that point of false security, because we've done tons of research talking to small business owners and entrepreneurs, their level of confidence and belief in the market is at like 95%, but you're absolutely right. When you look at the results, are they growing? No. Their optimism is high because of technology, AI, and what is possible, but are they experiencing it today? No. So it's kind of unusual because usually if you're not experiencing it, you don't have this confidence, but yet they have the confidence of the belief of the future, but are not experiencing it to your point.

Jill Castilla (09:31):
Well, we had this lull in new business formation because of COVID. And then we also had maybe a little support of businesses that may not have survived in our normal conditions, but were sustained through government assistance programs and through COVID. So you're also having this kind of correction occurring where there's this pent up demand for needing new business formation and then you have some legacy businesses that maybe are still trying to figure out if they sustain or not. And so I think we're seeing just an adjustment in the small business community.

Wendy Cai-Lee (10:01):
Just one last quick thing. I think it's because we all have short-term memory because the last real crisis has been a while. So we are all very glass half full right now, which is good. It's not a bad thing, but bankers are risk managers, right? That's at least what I was taught. So as CEOs, we always keep an eye on the other side of the coin to make sure that we're not caught by surprise. Yeah.

Jill Castilla (10:29):
And this was supposed to be the icebreaker question. I don't think you need to warm us up very much, Kate.

Kate Berry (10:35):
This is when the other shoe drops, right? Okay. So let's dive right in again. Everyone has challenges in their business lives, but some of them stand out more than others. Some are pivotal as teaching a lesson or changing the trajectory of our careers. What obstacles and specifically business hurdles have you encountered and how did you deal with it? Wendy, you want to start?

Wendy Cai-Lee (11:01):
Oh, I'm probably not the best person to start with because building a bank from scratch, I was like, "Hey, you're only giving me one situation, one challenge?"

Kate Berry (11:11):
A big one.

Wendy Cai-Lee (11:13):
Yeah. So when Piermont went through the application process, this was back in 2018. So the regulators refer to us as the freshman class of the de novo business because there weren't that many since the 2008-09 financial crisis, because for those of you who remember a lot of banks failed, there was a huge reluctance in issuing new charters. So that in and itself was a real challenging process because the regulators had to dust off their manual in terms of, okay, well, what is the process? But I think the biggest thing for me, the challenge from a business standpoint was building something that distinctly is different. It looks different, it operates differently, and getting regulators, investors, just all the stakeholders, including most importantly, employees during the recruiting process, convincing people to join and helping them understand or explaining to them and convincing them and selling it to them that this is the way forward and it has a real, bright, viable future of this new business model, meaning being 100% digital.

(12:23):
We were the first US bank to be 100% cloud native from day one, API native. So convincing, getting everybody on board was a huge challenge because I think we all have a tendency to operate within our comfort zone. So when someone gives you something that looks so different and then it's in a highly regulated industry and we're managing, taking care of people, we're safeguarding people's money, lots of questions get asked. So balancing that, creating something that's truly digital transformation with all the key stakeholders was a real uphill battle, especially when they have nothing to model against. They can't say, "Oh, okay, well, we got these two, they worked out, these three things worked out. So where does Piermont stack?" Well, there was nothing for them to look at to benchmark. So it really had to be, okay, where do we fit? Even getting a core system, talking to Fiserv, FIS, Jack Henry, like which core system within their own core?

(13:31):
Premier has a bunch of them, which one makes sense for us? I was like, "Well, no, I'll tell you which one makes sense for me." After we go through the RFP, they're like, "No, no, no, but you don't fit that mode." So they put us squarely on the core, for example, that is for a traditional community bank that services accounts like Grandpa Joe's checking account. Nothing wrong with that, but that's not what we do. So it was every aspect of building a hundred percent digital bank that was just convincing every party involved.

Kate Berry (14:11):
That's a huge lift. Yeah. Okay. Jill, you want to-

Jill Castilla (14:16):
All right.

Kate Berry (14:17):
About a business obstacle.

Jill Castilla (14:18):
Okay. Yeah. I think when I think about this in the context of being able to move your business forward. So when I came to Citizens, it was a troubled institution. In the CAMELS rating system, we were the lowest you could be. I can't tell you exactly what that was, but you guys are a smart group here. We were in a written agreement with the Federal Reserve. My first 18 months there, we lost a third of our capital. I mean, it just went away and we didn't have any mechanism to add capital. We did not have a shareholder that could write a check and there was resistance about going and raising capital. So we had to turn it around without laying off anybody. My board would not allow us to remove anyone. We had massive fraud, so I had to reprogram people.

(14:58):
It was like this autocratic directed battlefield commander kind of leadership style. Well, we were removed from that written agreement. It was, at the time, the fastest turnaround in the nation without adding capital for it to be in that type of condition. And then the board was like, "We want to be here for another hundred years and we want you to lead us there." And so for me, it was the switch from battlefield commander to this visionary future where we're going to be this bank that's going to redefine what community banking can look like and follow us because we're going to show you the way. And the team didn't believe me. They didn't trust me because I hadn't trusted them for a long time. And so to be able to make that shift, to be able to get a team, a culture that was really command and control, to be one of innovation and collaboration and trust, that was the most challenging really, the most challenge I've ever had in my career, but it was also just necessary to be able to get us to where we are today.

(15:53):
We wouldn't be this innovative collaborative culture if we hadn't done the hard work to transition us there.

Kate Berry (15:59):
So let me ask you, how did you do that with the employees when you said they didn't trust you?

Jill Castilla (16:04):
Well, and my team members that are here, well, I say this all the time, but you have to have consistency, consistency, consistency, and then that starts building confidence. And then you're building the confidence with the consistency, and then that ultimately builds trust. And you just have to keep doing that in every facet. You have to be open to hearing disagreements. You have to be willing to fail. My motto for a season was failure is not an option. I would say that all the time, failure is not an option. Not the way to collaborate and innovate, right? But at the time, we couldn't mess up because we were hanging by a string. The cost of a failure was too high, but then getting where we had the trust that we can do small failures. So the team had to see me fail and they had to see me admit mistakes and be vulnerable.

(16:54):
And we started attracting talent and retaining talent that really believed that. And then they started holding everyone else to that same level of expectations in our organization. So it took a lot of time. I mean, give me a bank turnaround any day, but turning around a culture of distrust was really difficult, but essential to be able to get to where we are today.

Racquel Oden (17:16):
Fascinating.

Kate Berry (17:19):
Racquel.

Racquel Oden (17:20):
I will follow with the same question. So I think since we're picking current obstacles, because we've talked about it, there's a lot we could pick. So I will pick my current one. So less of starting a bank or from a regional standpoint, but moving banks, that's many of us maybe part of that. So I've had a long career on Wall Street. I've been leading the US for HSBC for the last almost two years. I'm not even at two years. So taking the reins here. One would say leading the US is the coolest thing you could possibly have, but I think we're all living through the current US experience. And so globally, this has been very complex. If you think about HSBC, we're in 62 countries, primarily large focus in Asia, very specifically China, as well as Hong Kong, UK, globally around the world. So even take a topic like tariffs, like what does that mean to us and our clients, as well as the political landscape of going to Washington DC, representing the key points of this, but them looking at us having a massive exposure to China and Asia and having a comfort with that, which we've had for 160 years.

(18:34):
So that's perfectly fine. Although history is history, current history can outweigh history and you have to redefine and rebuild that connectivity and trust. There are lots of requests we were given of data and different laws that change all the time that you may or may not realize that will... the ways of working with a lot of our global counterparts are no longer allowed based on the current administration. So I'd say DC has completely changed our lives with the amount of changes we have to make. I do believe there is a much wider perception of the importance of globalization. I can't tell you how much our client base right now diversifies within their portfolio, but are absolutely diversifying in other markets just based on things that are happening right now. So complexity is high. Being able to ensure that you can stay the course of profitability, but at the same time, responding to both the needs of our Asia counterparts and clients, as well as our US counterparts and clients.

(19:39):
And then importantly, making sure we have a strong voice advocating for global businesses even in the US. And so it's not for the faint of heart right now. The complexity is quite probably the hardest I've ever seen, but importantly, if you wake up every day obsessed about the client and doing what's right for them, that's the only way you actually pivot appropriately and you stand on principle as to any decision you make because it's about the client.

Kate Berry (20:06):
Okay. So you said something that caught my ear, which is the current administration, you can no longer operate the way you used to. Why is that? And give us an example of how that works.

Racquel Oden (20:18):
Well, I think you heard about what we said so far. So with the current administration, even the markets are just not acting the way they normally act, right? Things that are happening, either we're pricing it in or we're not pricing it in. And I don't want to say current administration, any administration. So I think that's the important thing when you are CEOs part of corporations. Every administration, you're bipartisan. So you have to be ready to respond to whatever is put forward. I'd say this administration is just so active. It's daily, it's hourly, it's monthly, and it's not predictable. What companies love and heads of businesses love is your ability to take in what you believe this administration's going to do and then focus your business to support that. If it changes as much as it's changing now, it's especially hard for small business owners and corporations, but 10 times harder for small business owners.

(21:10):
You take a little thing like tariffs. This is causing mayhem for middle market and small business customers. Corporations can survive this in different ways, but you said it, 80% of our economy is small business owners. So my point here, whether you're at a big global bank, a regional bank, or a small business owner, reacting to this administration and keeping up with it is complex for all of us, but we have to be conscious of that and keep up with it.

Kate Berry (21:36):
Okay. So let's go on to a personal obstacle and it might be part of your career trajectory either way. Wendy, I think that probably might be starting the bank.

Wendy Cai-Lee (21:47):
Yeah. No, personal, I think for me, whether it's starting the bank or previously trying to make it to partner at Deloitte. I spent 10 years at Deloitte. I started my banking career at the Chase-Chemical merger for any of you who remember those days. So a long time ago where back then, honestly, as an Asian American woman—I finished undergrad early, so I was 20 years old—they didn't have anyone like me that was frontline, meaning on the floor doing trading and later on in investment banking. There wasn't one. So I just kept raising my hand. When I overheard there was some project, I would literally call my mom and cancel dinner and be like, "Yeah, no, I'm available." Because opportunities just didn't come to me directly. Who I am, I cannot change. How I look, I can't change, but those have consistently been challenging and created different challenges.

(23:01):
Raising money. So to even be able to submit the application to the OCC and FDIC, the opening capital is $40 million and they want, with the application, a fully executed lease, they want the C-suite in place, they want five independent directors in place, and they want all the credit policies and procedures in place. So the application was 362 pages long and they wanted it in hard copies. But to do that, to sign a 10-year lease in New York, that's a multimillion-dollar commitment. To raise the first $10 million, looking like what I look like and convincing people that I can be that CEO to trailblaze and build a different type of bank, it was even getting meetings. I had investors pull out after they agreed to it and then once they met me in person to sign, they pulled out. No reasons given other than after they met me in person.

Kate Berry (24:12):
No.

Wendy Cai-Lee (24:13):
Yeah. But you know what?

Kate Berry (24:17):
And here you are.

Wendy Cai-Lee (24:18):
Well, I can't really do anything about this. But I did it. If I wanted a sharper nose, yes, I could make it happen, but I can't fundamentally change what I look like. So it is what it is. And so my CFO was a 20-year CFO at a $20 billion bank called Astoria Bank that was sold to Sterling at the time. I got very lucky. I was introduced to him and he said, "Listen Wendy"—and he's your typical middle-aged white man who looks like an accountant, who is an accountant, and who lives in suburbia Long Island, and I say that because I say it to his face—he goes, "Listen Wendy, it's their loss.

(25:07):
We don't want their money." So we went through I can't even tell you how many pitch meetings, more than usual, because they just couldn't get past who I am. None of my track record even mattered, right? But Kate, you've been around, we've all been around. Think about how many community banks were chartered by somebody who was a doctor or dentist, and they got together and opened a bank. 30 years on Wall Street, making it to MD partner at the largest firm, I bought and sold banks most of my career with that track record and turned around a $22 billion bank—none of that mattered. But it did matter because obviously I got investors who did believe that the track record mattered, but yes, it took a while. Understatement, it took a while. Very compelling.

Jill Castilla (26:01):
Wow. I can't wait to talk over drinks. So my example's going to be more of an interruption that happened. So right before COVID in 2019, we were in the middle of a core conversion and we made this mistake of doing a core conversion and our debit card conversion. We decided, let's just do everything all at once. And there are only 70 people on our team. So doing big projects like this is really challenging. I was leaving my office one day, and we were coming back to do a staff meeting. I ran across the street; I had the protected crosswalk. And as I was going across, I saw a truck coming and it hit me square on. That was in July 2019. I ended up flying out of my shoes. He didn't see me and I hit headfirst on my backpack, which I'm still looking for a sponsorship opportunity there with Tumi because apparently that ballistic nylon saved my life.

(27:01):
But it did give me a traumatic brain injury. And so I had a really difficult time after that point, both containing my emotions—I was getting angry really easily—and also my critical thinking skills went away. I couldn't type and AI wasn't there. It would've been so nice to have something like ChatGPT that I could just talk to. I have always leaned on those critical thinking skills and being able to see things before other people can, figure things out, do the math in your head, see the opportunities. And it just started going blank on me and I really lost a lot of confidence. And then COVID hit. I was still thinking I wasn't even equipped to be able to do the job I'm in right now, but the adrenaline of everybody being in so much need started firing off all the pistons and everything in my brain.

(27:53):
And it started working and I started having some little wins here and there, but gosh, it really made me appreciate how to be able to type, to be able to hold a drink, to be able to be engaged in a conversation and be able to respond to a question intellectually without having to step back and make sure that I have all my ducks in a row. I think doing hard things is so important, especially when you're insecure. At that time, I ended up pitching Mark Cuban twice and partnering with him, doing basically a Shark Tank pitch while I was really impaired and being able to pull that off, but each little win just kept building the confidence back. So I think it's just a testimony of really putting yourself out there when you have some setbacks, getting over the fear and trying to have the courage, especially when it's trying to help others.

Racquel Oden (28:52):
I'm going to probably pivot to the personal obstacle because we briefly talked about this. Couldn't agree more. Can't change what you look like when you walk into the room. So we're not going to make that. And what comes with it comes with it and we're all experiencing and we know that. Plan for the unexpected, but the one thing you'll learn, no matter what stage you are in your career, health is number one. In any moment and at any time, and we can talk about different periods of what has happened to us, but I do say that, especially at this stage of life, understanding what that means is the priceless thing and your resiliency to move through it and be able to do all that you've done is incredible. But it is a reminder. Nothing is owned by us. There's a higher being that decides things like that, but you are a testimony, which is incredibly important.

(29:40):
We talked about different points in our career, and I think many of us talked about being the sandwich generation—parents and children all at the same time—and this corporate thing and all the thousands of employees that report to us. I've had 40,000 employees, 10,000 employees, so yes, and everyone's relying on us to be our best at all the things that we can possibly do. And partly the story that we talked about was I was chief of staff to one of the largest banks globally, the other one, not HSBC. And I worked for the president of the company, the greatest opportunity, greatest job in the world, being able to see things at that level. And as part of that, true advocacy, what I call sponsorship, but very importantly, we talked about having that true ally. And you talked about that, having the Sterling CEO step in because we can't only rely on ourselves for people that look like us because we're not going there assuming people that look like us are going to save us because it's very hard to find us.

(30:43):
So you've got to really make sure you diversify your allyship and sponsorship and what that looks like. In that role, I say life takes over personally. I got a call at the time. I just had a child and my nanny called and said she was quitting for very personal reasons and right reasons, she was no longer going to be able to take care of my child. So I immediately, a week into it, couldn't find any replacement. I walked into his office and I told him, "I love this job. This has been incredible, but I'm going to quit." And I did. I quit. I had a letter and handed him my letter. Sometimes it takes the right person in the right seat at that time to save yourself because he looked at me and said, "Okay, I get it. Why don't you go home and let's talk about it tomorrow.

(31:32):
I think you should sleep on it." I was like, "Okay, I can go sleep on it, but I'm telling you, when I come back tomorrow, I'm going to give you the same answer." I went home, slept on it, came back in. And here's what was different because it wasn't that I went home and came to some different conclusion. He wanted to help solve it. He walked in and he gave me a list of names of people that he knew were available for me to look at for childcare. And he said, "I want you to take the rest of the week off, go interview and find the right person for you that you can feel good about being away from home, but more importantly, doing what you want to do." He's like, "Because I know you too well. You're not ready to quit." I say all that to say, to this day, this wonderful person—and it takes a village—is still with me 25 years later.

(32:20):
So I just want to give you the point of the story. She's still with me and she can be with me until whenever she would like to, but it was an ally who stepped in because anybody else would have taken that letter and thought nothing of it because they would have thought she's a woman, she can't do it, she's got this work-life balance thing, why get into that? And it does take sometimes those people that are really willing to put it on the line. So when I use the word sponsor, it's that level of sponsorship, not just "she's good, she shows how well she works," but sponsor me in the moment where I'm at my lowest. That's when you know you have real sponsors.

Kate Berry (32:55):
Incredible. Yes. So we are out of time, but I want to thank our panelists and get ready for the next panel. Thank you.