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Patrick Hylton: proving the doubters wrong

Business Leader: Executive Steward NOMINEE #6

BY MOSES JACKSON

Wednesday, November 15, 2017

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Today the Jamaica Observer publishes the sixth of 12 stories on the nominees for this year's Business Leader Award being held under the theme “Business Leader: Executive Steward”. The nominees are among the top CEOs in Jamaica.

Dr Omar Davies faced public scepticism over his decision to name Patrick Hylton managing director of FINSAC (Financial Sector Adjustment Company) in 1999.

Hylton was already an executive at the State-run institution at the time of his appointment but had no prior experience in handling a national financial crisis of the depth and magnitude that the organisation was created to resolve.

Not one to readily back away from controversy, Davies — the then finance minister — dispelled his critics with one of his more memorable repartees.

“Patrick was the first person to tell me that I had a multi-billion-dollar problem,” the feisty minister famously declared.

Among his parliamentary colleagues Davies did not hide the fact that he had been impressed by Hylton's grasp of the challenges at hand and by his carefully crafted recommendations.

Within three years Hylton found himself facing Michael Lee Chin across the negotiating table, making the case to the Canadian/Jamaican billionaire that National Commercial Bank (NCB), of which the Government was an unwilling custodian, could thrive in private hands.

Equally famous for his extraordinary entrepreneurism and rhetorical flourishes, Lee Chin later remarked that Hylton should “be given a knighthood” for successfully convincing him to buy the State's 75 per cent stake in the bank.

The maverick investor had no qualms about poaching Hylton from FINSAC in 2003, installing him as the bank's deputy managing director to Aubyn Hill, who he recruited from the Middle Eastern state of Oman, to head up the institution.

As was the case with Davies a few years earlier, Lee Chin surprised many within business circles by promoting Hylton to the group managing director's office in 2004 to replace Hill, who had stepped down.

Hylton has been NCB Group chief executive officer for 13 years and is also chairman of its investment arm, NCB Capital Markets Ltd. If the banking group's status as one of the most impressive sharpbenders within the financial sector is anything to go by, this CEO has once again confounded the early critics who had doubts about his readiness to handle this major enterprise.

A broad macro review of where NCB Group is today speaks volume to this transformation.

First, there are over 2,500 Jamaicans on its payroll. Last year, the group reported profit of $14.4 billion which has already been surpassed by the performance of the first nine months of the current financial year. Needless to say, over the past few years NCB has overtaken its perennial rival Scotiabank Jamaica as the most profitable publicly traded company in the country. In the 13 years under Hylton's stewardship, the banking group has generated $139.4 billion for its shareholders, on top of which, as at June 2017, it boasted assets of $665 billion.

These staggering numbers are, to some extent, the product of the stratospheric bars that the CEO has established for the entire organisation to leap over, and by his consistent demonstration of a willingness and ability to organise the workforce around these ambitious goals.

“In 2010 I set an aspiration for becoming the leading financial institution in Jamaica; no one believed it was possible at the time because we had been in second place for a very long time,” says Hylton. “When we accomplished that objective, then I said we are going to become a leader in the region and that, too, has become a reality. Start with the dream then execute relentlessly.”

A deep-dive into some of the more granular details of the bank's operation offers an equally useful insight into how and why this institution has made such a remarkable transformation under Hylton's leadership.

In furtherance of the growth commitment enunciated in 2010, Hylton and his senior management team launched what they referred to as a sales transformative initiative — essentially a measure to improve staff productivity.

“At the time, our sales productivity, as measured by products sold per FTE per day, was 1.2; the regional average was 2.6 and best in class was 3.5,” Hylton explains. “I set the target at 3.6 and we surpassed this target, effectively improving sales productivity by over 300 per cent. It involved changing our sales routines, our sales performance management systems (eg daily reporting on sales performance), and our sales culture. It involved change.”

Hylton brought to NCB Group some unique personal characteristics which have helped him engender esprit de corps within the sprawling conglomerate — ensuring that the buy-in of his vision goes all the way down to the rank-and-file staff.

For one, this CEO is an old-school personality overlaying new-school industrial relations practices. He has a serious no-nonsense streak and a single-minded focus on data-driven outcomes. But he is also blessed with an easygoing, unflappable demeanour that endears him to members of staff and customers alike.

“If you want to see improvement, you must also measure and hold persons accountable because what gets measured gets done,” he remarks. “We have become an organisation that values empiricism, data, and measurement over anecdotes. I used to joke and say 'In God we trust, everyone else show me the data.' I do not have to say that very much anymore because we have transformed into an organisation that embraces data in decision-making and performance management.”

The confidence of the chairman and major shareholder and the personal friendship they have shared over the entire period of Hylton's stewardship have also served the interest of the organisation well.

“Michael Lee Chin has been a mentor and someone with whom I can share my vision for the organisation, knowing that he will endorse it or, as he has on a number of occasions, help me to expand that vision,” Hylton lets on. “We have a very good relationship and our conversations are often punctuated by the joke that he admires my ability to see around corners. We have a fantastic relationship.”

In fact, listening to Hylton outline his vision for NCB, it is hard to escape the conclusion that his constant interaction with his boss has shaped his own personal outlook on life in ways that are well beyond corporate affairs.

So Lee Chin is a personality who is known to stockpile aphorisms that he unleashes within the public square at every opportunity. Hylton has developed his own collection and puts them to the service of the bank.

One of my favourites is a quote from an unnamed source that Hylton invokes from time to time: “Being realistic is the most commonly travelled road to mediocrity.”

Not only has Hylton personally internalised this elegant mantra, but he has all but codified it in the operations of the bank.

“When we aim high, even if we fall a little short, we will always achieve more than when we set low expectations,” he tells his staff. “At NCB, we have no intention of being mediocre. It is through achieving great things that we are best able to serve our customers, employees, shareholders, and nation.”

Yet the words of history's transcendental genius are regularly put to constructive use by the NCB boss who calls on them to drive necessary changes at his organisation. “The definition of insanity is doing the same thing and expecting different results,” declares Albert Einstein.

Buddha's gem, “The mind is everything. What we think, we become,” is another of Hylton's favourites.

Perhaps the most evocative of his beloved words of wisdom and which has undoubtedly been woven into NCB's corporate culture was provided by American industrialist and former chairman of General Electric Company Jack Welch. “If the rate of change on the outside is greater than the change on the inside of your company, the end is near.”

Hylton attributes the success at NCB in part to its understanding and collective adherence to the central message in Welch's invocation.

“This consistent high performance has come as a result of aiming high and transforming ourselves in order to adapt to the environment and remain viable,” he says. “The one thing that is constant is change, so we must continuously embrace and respond to change.”

NCB's success enabled the Jamaican company to make an investment in 2015 that would have been unthinkable a decade ago. The bank acquired a 30 per cent stake in the Trinidad-based Guardian Holdings.

Hylton explains: “This was also significant from a national perspective as this represented the first major investment in a major Trinidadian financial institution by a Jamaican corporate, following years of Trinidadian companies taking major investment stakes or purchasing leading Jamaican financial companies.”

This is one executive custodian who refuses to rest on his laurels, eschewing the misguided notion that NCB's future is magically secured because of its past and present successes. The organisation has been putting its capital behind the idea that the future of banking is digital, and since last year has stepped up efforts to meet its transformational targets set for the year 2020.

“We have embarked on a significant digital transformation effort to provide faster, simpler, more convenient and more delightful experiences for our customers,” says Hylton. “We want these experiences to be world-class, and again we have set our sights high as we look to model world leaders such as Amazon and Google.”

The CEO explains that to accelerate this transformation, the organisation launched its first Agile Lab in the English-speaking Caribbean in April 2017 — a multi-disciplinary approach to software development that “has already delivered significant benefits for our customers”.

One tangible product is a new online account-opening solution that was piloted in three branches within 22 weeks, a dramatically compressed timeframe compared to the average development cycle of 12 months with the use of conventional approaches.

“It has significantly reduced account-opening time for customers and we are continuing to work on the solution as we prepare to roll it out across our entire network,” beams Hylton.

Yet the success of this CEO's stewardship is being reflected beyond the financials of the institution as demonstrated by the exhaustive list of awards it has copped over time — among them:

* Best Bank Jamaica,

* Best Investment Management Company,

* Best Pension Fund Manager from local and international agencies, organisations and magazines including World Finance, The Banker, Latin Finance, Jamaica Stock Exchange, Private Sector of Jamaica, Jamaica Exporters' Association, and the Human Resources Management Association of Jamaica.

In 2011, The Banker magazine named NCB the best in the Central America region as measured by its return on capital and return on assets. The institution also ranked third and 14th, respectively, in the world in return on capital and return on assets.

“Our success has also come as a result of not making excuses when confronted by challenges, but rather [by] capitalising on the inevitable opportunities created,” declares Hylton.

“It is rewarding for me as a leader to see my team expand their personal perceptions of what is possible as they take on big, bold aspirations and achieve them,” he asserts with an unmistakable sense of pride. “It builds confidence and new capabilities which allow us to achieve more. ...my second most important role is to foster positive and enabling mindsets and behaviours within my team. I believe in the power of the mind to triumph over any challenge.”

Over the years, the bank has been a generous contributor to good causes, and this aspect of its operation was publicly recognised last year when it was nominated for the Jamaica Observer Business Leader Award under the theme: 'Business Leader: Corporate Philanthropy'. Its donations have amounted to over $1.3 billion since 2003.

NCB has not been the only beneficiary of Hylton's management skills. He chairs the boards of Mona School of Business and Management and Harmonisation Limited. He is a former president of the Jamaica Bankers' Association and currently sits on several boards including Massy Holdings Limited, and Guardian Holdings Limited, both Trinidad-based companies.

As a member of the Economic Growth Council and Economic Programme Oversight Committee, Hylton affords the Jamaican Government the benefit of his private sector insights on the ingredients and policies that are most likely to lead to economic growth

He is the recipient of the Jamaica Institute of Management Manager of the Year Award 2016 and was awarded the Order of Distinction, Commander Class, in 2002.

— Moses Jackson is the founder of the Business Leader Award programme and chairman of the Award Selection Committee. He may be reached at moseshbsjackson@yahoo.com

— Freelance journalist Nazma Muller contributed to this story.

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