The foundational role of succession planning in building future-ready institutions

"The function of leadership is to produce more leaders, not more followers" - Ralph Nader

When first stepping into the role of Managing Director and CEO of HNB, I started my review of operations for 2013 by noting that: “This was a year in which we recognized the power of team spirit, the importance of building teams and succession planning towards sustainable future growth,”

More than a decade later, after what has certainly been a challenging yet deeply fulfilling innings, those opening statements have certainly stood the test of time. During this period, our deposits have grown by more than 4.5 times to over Rs 1.5 Trillion, gross loans have surpassed Rs 1 Trillion by over 3 times while our Profits for 2023 exceeded Rs 20Bn with HNB Group recording the highest profits among its peers. At the same time, we have been able to record superior asset quality, capital and liquidity levels. 

In 2013, having identified the need to improve our efficiency levels, we set up a dedicated Process Improvement Unit. As a result, we centralized our account opening, credit underwriting, and administration functions. This enabled the creation of a specialized team at the centre while we redeployed the majority of staff who were previously engaged in these activities at 250 customer centers to drive sales. We also broadened our digitization efforts to back office and middle office functions with robotics and AI. 

 Our digital journey commenced with the ‘New World of Banking’ in 2014. We launched our digital app, digital wallet and payment and cash management solutions. Today they have grown exponentially to facilitate over 3 million monthly transactions through digital channels alone. 

Meanwhile, having established our tremendously successful Islamic Banking Unit in 2012, we acquired Prime Grameen in 2014 which in turn has grown to become HNB Finance PLC and introduced Custody and Trustee services to our offerings in 2016. 

These outstanding achievements were only made possible through the total alignment, dedication, and daily efforts of the over 6,000 strong HNB team whom I have had the pleasure and privilege of leading, mentoring, and learning from. This team has driven a truly remarkable transformation in our systems and processes across our Bank. Crucially, these results were achieved with marginal increase in the number of branches and employees. The transformation journey we embarked on in 2013, culminated in the unveiling of our new brand identity in 2022.

I believe that one of the greatest lessons from my time at the helm has been that while technology, standards and systems are what optimizes growth, ultimately, it is people that drive it. Therefore, it is essential for all growth-oriented organizations to continuously identify and nurture talent, and also provide emerging leaders with the opportunities and responsibilities they need to challenge themselves, and truly shine. At every level of the bank, there needs to be a clear plan for succession, and a concerted effort to build up our most promising talent to continuously rise to new heights. 

Planning for succession, planning for success 

 While succession planning is often relegated to an abstract concept whose necessity is always in the distant future, it is in fact the bedrock upon which future-ready institutions like ours are built. In practical terms, succession planning at HNB has been a multifaceted endeavour. It involved creating developmental pathways for high-potential individuals, ensuring that each step in their career progression is not just a move but a meaningful evolution. 

Our strategic planning process began with a clear-eyed assessment of our leadership needs, both present and future. We scrutinized the competencies that have driven our success thus far and, with equal measure, forecast the skills necessary to navigate an evolving financial landscape. We took a dual view that balanced the strengths we had cultivated with the agility we continuously seek to foster.

One of my first actions as MD, was the establishment of the HNB Top 100 programme, with the goal of bolstering the management team from the 13 Corporate Management Members available at the time into a robust pool of multi-disciplinary experts, by including Senior Management to create the strongest possible leadership team.  

This was soon followed by extensive tiered Coaching and Leadership programmes which we branded as Aspire for newcomers to management, Acumen for middle management, and Catalyst for senior management. Each tier created a feeding system for the next, and I’m proud to note that many of HNB’s most dynamic leaders, have moved through these dedicated programmes, and today play an integral role in shaping the future of the Bank.  

Mentorship, has been a key component of our strategy. Seasoned members of the team, including myself have taken under their wings many promising talents, not to mold them in our image, but to imbue them with the wisdom of the lessons that we learned, while always encouraging their own unique strengths. It is a bespoke process which recognizes that leadership is not manufactured in bulk – it is crafted one leader at a time.

The true measure of an effective leader extends beyond their tenure and achievements; it is also reflected in how effectively they prepare their institutions for a seamless transition of leadership. It is with this understanding that, from the outset of my role as MD and CEO, a clear blueprint for succession was drawn.

 We commenced systematic coaching programmes for identified successors, with reputed local and international professionals,  to ensure thorough exposure to the best of local and global best practices.  

This culminated in the announcement of Damith Pallewatte, our current Deputy General Manager of our Wholesale Banking Group, as the incoming Managing Director and CEO in May 2023, subject to fit and proprietary clearance by the Central Bank of Sri Lanka. Since then, we embarked on a rigorous process of understudying and constant engagement, to ensure that he is fully equipped to take on the multifaceted challenges of this role. 

 Our collaboration over the past months has been intensive, encompassing every dimension of the bank's operations, with a focus on strategic decision-making, stakeholder engagement, and innovation stewardship. 

Internally aligned to face any external challenges

Looking ahead, HNB is poised to play a pivotal role as a one of the nation’s Systemically Important Banks. Our aim is to ensure that Sri Lanka's economic revival is robust and sustainable, navigating its course without the need for detours prompted by indiscretion or indiscipline. Our capacity to significantly support our customers, whether through rescheduling or opening new avenues of business, is foundational to our mission.

We anticipate growth across several key sectors, from FDI to industrial zones and beyond that can boost exports, to major investments in healthcare, education, and IT, KPO and BPO. HNB is eager to support these businesses that will shape the nation's future. Emphasizing the importance of SMEs, micro-enterprises, and entrepreneurship, we recognize the untapped potential within our people—from the youngest minds considering their future business endeavors to the seasoned professionals shaping the industrial landscape. We stand ready to offer the necessary support, fostering a culture where entrepreneurial spirit thrives and innovative ideas receive the nourishment they need.

The revival we are working towards is the first chapter in a larger mission to enable a true national economic renaissance. We are committed to enhancing our network, infrastructure and capabilities to ensure Sri Lanka continues to grow in global relevance and economic prowess. From advancing medical tourism to uplifting educational standards, our vision extends beyond traditional banking, encompassing the holistic upliftment of our nation's prospects.

As I look towards the future, my confidence in the ability of HNB and its Top Team with Damith at the helm to play this critical role, while maintaining our hard-fought financial resilience is unwavering. This confidence is amplified by the transformation of technology and processes within the organization. But ultimately, it is driven by the confidence that I have in our people and the robust framework we've established for developing talent and the dynamic culture of leadership that thrives within our ranks. 

It is this team's adaptability and willingness to embrace change that has propelled our collective capabilities to unparalleled heights. For this, my gratitude is boundless. The HNB of today stands as a testament to their collaborative spirit. To all our stakeholders, I extend my heartfelt wishes for continued success and strength, confident in the knowledge that HNB will reach the pinnacle of the corporate world, all the while serving as a true 'Partner in Progress.'

As my chapter closes and a new one begins, I do so knowing that the Bank is stronger, more agile, and ready to navigate the complexities of an ever-changing world. Our commitment to growth—both our own and that of the communities we serve—remains steadfast. Our vision for the future remains clear, with our path, illuminated by the leaders of tomorrow who have been shaped by the successes 

of today.