Must-Learn Leadership Lessons From HDFC Bank's Aditya Puri

Aditya Puri is one of the cleanest examples we have, in Indian corporate history, of a leader who understood early that the measure of his work was not what happened while he was in the chair. It was what would keep happening when he was no longer there, says Suresh M K.

In the late 1990s, a young assistant manager at HDFC Bank was sent to Delhi to try to secure a meeting with the CEO of a large pharmaceutical company. After weeks of chasing, the meeting was finally confirmed. His boss -- Aditya Puri, then just a few years into running the fledgeling bank -- would accompany him.

The two of them flew to Delhi. They checked into a five-star hotel, because that was where you stayed if you were meeting the CEO of a listed company.

But the travel allowance was tight. So they shared a room. Puri slept on the sofa and gave the bed to his junior.

I came across this story recently while reading about Puri's career and it stayed with me for reasons that took me a day or two to name.

It was not the frugality that struck me. It was not the humility either, exactly. It was something about the posture.

Puri, who would go on to run HDFC Bank for 26 years and build it into India's most valuable financial institution, was a man who had already internalised something about leadership that most of us take decades to learn.

He was not the boss travelling with an underling. He was the senior colleague travelling with the junior colleague.

The hierarchy existed, of course. But it did not determine who got the bed.

The rise of HDFC Bank under Puri

When he retired in 2020, The Economist asked whether Aditya Puri might be the world's best banker. The shareholder returns during his tenure were above 16,000 per cent. The bank he inherited as a start-up in 1994 was by then the tenth most valuable bank in the world.

But what I find more interesting than the numbers is the phrase Puri himself used, repeatedly, to describe his role at HDFC Bank.

He called himself first among equals.

I have been thinking for some time about the distinction between leaders who become institutions and leaders who build them.

The first kind -- the ones who become the institution -- are more visible. They give the keynote speeches, write the autobiographies, feature on the magazine covers. Their personalities become indistinguishable from their companies.

We know them by their quirks, their catchphrases, their wars with the board.

When they leave, the organisation enters a crisis of identity, because the identity was borrowed from a person rather than designed into a system.

The second kind are harder to see, precisely because they have done the work of making themselves less necessary.

They tend to use a different vocabulary. They talk about teams, about processes, about the decisions they were not the smartest person in the room for.

They build organisations that, when they leave, barely notice they are gone.

The true test of leadership

The truest test of a leader is not what happens while they are present. It is what continues to work once they are no longer in the room.

Puri passes that test with an elegance I rarely see in Indian corporate history.

Five years after his retirement, HDFC Bank remains India's most valuable bank.

His successor, Sashidhar Jagdishan, did not inherit a charismatic legacy that needed to be protected. He inherited a machine that runs.

The credit risk frameworks Puri had embedded over two decades still function. The branch network expansion protocols still operate. The conservative lending culture -- famously described in the line that friendship and banking are not correlated -- still holds.

None of this is accident. All of it is architecture.

Puri's approach to institutional trust

The most quoted episode from Puri's tenure, and the one I think does the most work in explaining how the bank weathered the volley of fraud scandals that hit Indian banking in the 2010s -- ICICI, Yes Bank, PMC, the dramatic exits of Vijay Mallya and Nirav Modi -- is his refusal to lend to personal friends on the basis of the friendship itself.

A good friend who represented bad business, he said, got a coffee. Nothing more.

It sounds simple. It is not simple at all.

What Puri was doing, in that single discipline, was separating personal trust from institutional trust.

He could be a warm friend in his private life and an institutional gatekeeper in his professional one, without letting the first corrupt the second.

And because he modelled that separation at the top, the bank was able to encode it into its culture.

A loan officer in a mid-sized branch knew, by observing what the chairman did, that a well-connected applicant would not get preferential treatment. The architectural move was making it structurally easier to say no to the well-connected than to say yes.

That is what I mean when I say trust, at scale, stops depending on who is in the room and starts depending on how the system behaves. It becomes infrastructure rather than sentiment.

Building a culture of discipline

Most Indian banks, including many good ones, have not made this separation cleanly. They have let personal relationships contaminate institutional judgement and the results have been visible in the last decade of corporate defaults.

The HDFC Bank difference is not that Puri was a nicer person than his peers. It is that he designed a system which made institutional discipline the default even when personal pressure was present.

That is an architectural achievement, not a moral one.

There is a passage by Jim Collins, in a book many of us have on our shelves, where he describes what he calls Level 5 leadership -- the paradoxical combination of personal humility and professional will.

Quiet people who are ferociously committed to the enduring success of something larger than themselves.

Collins studied American corporations to arrive at this portrait.

Puri, working in a very different context, arrived at the same synthesis independently.

Lessons in operational discipline

What I find instructive about Puri's career, beyond its obvious commercial success, is the specific operational discipline that flowed from the first-among-equals posture.

Decisions were delegated to the people closest to the work and they were expected to own them.

New products were piloted small, evaluated honestly and either dropped or scaled but never allowed to drift in the limbo of ambiguous middle states.

The internal culture was direct rather than diplomatic.

Puri was known for calling a spade a spade, for firing without euphemism when firing was required, for refusing the polite evasions that clog the top of so many large organisations.

None of this was dramatic.

That is the point.

Great institution-building is rarely dramatic. It is a long series of small structural decisions, made in a particular direction, compounded over decades. Puri's genius -- if that is the word -- was the consistency of the direction.

I sometimes wonder what the next generation of Indian business leaders will take from Puri's career.

The answer, I hope for, is not his discipline or his thrift or his 26 year tenure, though all of those are admirable.

I hope the lesson they take is the posture itself.

First among equals.

It is not false modesty.

It is not a denial that someone has to decide when the moment calls for it.

It is a way of locating oneself inside the organisation rather than above it.

It is a refusal to mistake the title for the work.

It is a quiet acceptance that the institution is more important than the individual leading it, and that acting on that acceptance produces very different behaviours than merely believing it.

Five years into his retirement, Puri is largely absent from public conversation about HDFC Bank.

No one is asking him to return. No one is speculating about whether the bank can survive without him.

That is not because he is forgotten. It is because the bank he built was, from the start, designed to work without him.

That is the rarest kind of corporate legacy in this country. A leader who did not become an institution. A leader who built one.

I have been writing about quiet leadership, about the kinds of work that do not announce themselves, about the difference between being indispensable and being useful.

Puri's story sits somewhere near the centre of what I have been trying to articulate.

It is one of the cleanest examples we have, in Indian corporate history, of a leader who understood early that the measure of his work was not what happened while he was in the chair. It was what would keep happening when he was no longer there.

The young assistant manager who slept in the bed while Puri took the sofa did not know, that night in Delhi, that he was observing something being built. But he was.

What was being built in that shared hotel room was not a bank, exactly. It was a way of being in a bank. A posture that would, over two decades, get written into the culture of an institution, and through the institution, into Indian banking itself.

Some legacies are loud. The most enduring ones are quiet.

It is what it is.

Suresh M K, the author of Lead Less, Build More, is an executive coach and a strategic advisor with over 40 years of experience in finance transformation and training leaders.