The 16 principles that define leadership at Judo Bank

There is an old saying in corporate governance (which is a Chinese proverb) that ‘the fish rots from the head’. If the leadership of any business or function — small or large — is not leading by example, then the organisation can build a tendency to mirror that behaviour and become dysfunctional. 

In startups this can prove fatal. People can ‘smell’ BS or a lack of authenticity long before it is clearly visible, and it undermines everything. We vowed that no matter how talented an executive was, there would be no place for them if they were not true to the values that we had established for Judo bank.

Our philosophy on leadership led us to develop the 16 principles that define leadership characteristics at Judo Bank. While we arguably developed these principles early in our evolution, we felt it important to clearly enunciate them so they acted as a reference for the leadership bench that we were seeking to build and a cornerstone of how they were evaluated. With the future very much in mind, these are the 16 principles:

1. Be customer obsessed

   Leaders start with the customer and work backwards.

2. Have an ownership mindset

   Leaders are owners and are personally highly accountable.

3. Demonstrate good instincts (a lot)

   Leaders have strong judgement and know when to use it.

4. Learn and be curious

   Leaders are never done learning and always seek to improve themselves.

5. Be resilient and mature

   Leaders keep things in perspective; they move between the dancefloor and the balcony when setting context.

6. Think big

   Thinking small is a self-fulfilling prophecy.

7. Hire and develop the best

   Leaders focus on our ‘migrant mindset’ and raise the performance bar with every hire and promotion.

8. Insist on the highest standards

   Leaders have relentlessly high standards — many people may think these standards are unreasonably high.

9. Bias for action

   Speed matters in business.

10. Dive deep

    Leaders operate at all levels, stay connected to the details, audit frequently and are sceptical when metrics and anecdotes differ.

11. Detest ‘bad’ bureaucracy

    Leaders avoid endless meetings, unproductive effort, long reports and poor execution.

12. Earn trust and be aware of your ‘shadow’

    Leaders listen attentively, speak candidly, treat others respectfully and know that their actions speak louder than words.

13. Know your people

    Leaders understand what motivates and drives their teams, and how to get the best from them.

14. Have backbone, disagree and commit

    Leaders engage at ‘point easy’ and are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting.

15. Be committed to values

    Leaders value trust, teamwork, accountability and performance.

16. Foster a risk culture

    Leaders are always thinking not just about the risks in front of them but two steps ahead.

Different models or styles of leadership can be needed at different stages of a business’s evolution. Too many entrepreneurs (like Tom Blomfield at Monzo) simply do not enjoy the administrative demands of leadership and management in a maturing business, whereas some leaders are quite adept at changing the way that they operate.

Source: Supplied

Leadership in a start-up business is very different from that in an established business. There is much evidence that leadership and management within large firms make very little difference to the performance of the organisation. This could be either because the selection process is sufficiently effective that good managers are replaced by good managers, or because managers make very little difference in some industry structures, where the power of the firm dictates outcomes regardless of the manager. Clearly the exception here is that incompetent managers can inflict much harm on the firm if unchecked. There is no equivalent in business management to the Hippocratic Oath of the medical profession in how managers should perform, and much underperformance is easily hidden by market power. Not so in a startup: weaknesses in performance are readily visible and often fatal. 

Over time as we shaped the company, there were a series of leadership competencies that we consistently discussed and focused on:

1. Vision

   The leadership trait of vision is of particular importance in a startup and growing business, and not all those in leadership positions have it. Leadership with a clear vision is essential for guiding and directing efforts.

2. Influence

   Leadership is also about influencing behaviour: winning the hearts and minds of those inside the business, and generating belief in an organisation’s ability to achieve stretch goals — that they can jump three metres instead of two. If they ‘fail’ at 2.8 metres, they have still achieved a far superior performance than achieving two metres. We learnt this philosophy on high performance from John McFarlane when he was CEO at ANZ.

3. Culture

    Leadership is about defining, refining and embedding the culture of the organisation.

4. Optimism

   No matter the external environment, leaders must be optimistic. That need for optimism was tested at the beginning of the COVID-19 crisis in 2020. At that time, Judo was a young company that found itself facing a real ‘black swan’ or tail-risk event. Being an optimist doesn’t mean being sanguine and ignoring reality; it means holding a consistent and positive belief that we will be able to chart our way out of the crisis, and having a pre-disposition to see the opportunities that often emerge in a crisis.

5. Problem-solving

   Leaders must come to the table with solutions, not just problems. We occasionally used the term ‘dead cat’ to highlight situations when someone would metaphorically put a dead cat (problem) on the table, point at it and say, ‘Look, there’s a dead cat. Nothing I can do about that, it’s dead’. This was a tongue-in-cheek way of calling out the importance of having spent some time thinking about what the potential solutions to the tabled problem might be, rather than simply passing it on to others to resolve.

6. Ownership

   Perhaps most importantly, leaders must take personal ownership of the culture within the business. Taking ownership of culture is tested in a crisis. We saw leaders as having the responsibility to ensure that people who actively detracted from the culture we were aspiring to embed — those that hurt the culture — were removed from the organisation. As the old saying goes: ‘What you permit, you promote. What you allow, you encourage. What you condone, you own’.

The cultural tone set by the leadership team is so important. We agree with Jeff Immelt, the former CEO of GE, who said that in most leadership forums, there are four types of people:

1. Always engaged, contributing with thoughtful points and listening to other views.

2. Constantly talking, drowning the meeting in detail, and not open to alternative views.

3. Stays silent even though they have much to offer, and their contribution must be encouraged.

4. Those who don’t belong in the team, who stay silent in meetings but don’t hesitate to undermine the team outside of the meeting with a contrary view.

We have had one or two people who fit the fourth type at Judo Bank, and we eventually got rid of them. The mistake we made is that we didn’t remove them from the business earlier. Such individuals are a huge drag on the culture of the organisation.

This is an extract from Black Belt: A masterclass for start-ups and entrepreneurs by Joseph Healy and David Hornery. Healy is a co-founder and the CEO of Judo Bank, and Hornery is a co-founder and non-executive director of Judo Bank.