#44 Joseph Healy - Co-Founder of Judo Bank

Judo Bank is one of Australia’s largest and most trusted banks for small to medium-sized enterprises. Starting from a PowerPoint idea in 2016, Joseph and his co-founders have grown the business to now be valued at over $1.5 billion, have over 600 staff and a loan book of $9 billion.

Throughout the episode, Joseph talks about Judo’s philosophy of measure twice, cut once - emphasizing the importance of planning in a super competitive environment. He also mentions how he took advantage of the big bank’s weakness by providing a “high-touch, high-tech” service - emphasizing relationship building with their clients.

If you enjoy the episode, we’d love if you’d leave a 5-star review and share it with family and friends.

Share the episode: https://thedionguagliardopodcast.buzzsprout.com/share

More on us!

Dion's Newsletter: http://eepurl.com/hHg1ff

Our social media: https://linktr.ee/FortressFinancial

Fortress Family Office: https://www.fortressfamilyoffice.com/

Contact us: admin@fortressfamilyoffice.com

Transcript

​
Highlight Clip
---

Joseph: We wanted to go back to old fashioned, relationship banking where you had banker sitting across the table from the butcher, the baker and the candlestick maker and seeking to understand what the business was trying to do and then seeing how the bank could help them.

Now, that might sound like a pretty standard. Business proposition, but the world to change quite aggressively and there's so many small businesses were being pointed into call centers. 

I was confident that if we could get the right staff, because I do believe in a world that's become so faceless and so digitalized . But when it comes to dealing with small businesses, the butcher, the baker the candlestick maker wants to speak to a person. That listens.




Introduction
---

(Generic Introduction) 

Dion: Welcome to the Dion Guagliardo Podcast, where I interview business people who run or have sold businesses worth a few million dollars all the way through to billions of dollars. While most of my time is spent to managing investment portfolios for people after they've had a successful exit. I've always been fascinated by the entire process and hearing the insights that successful entrepreneurs and business people have learned along their.

At Fortress Family Office, we're an investment portfolio manager and we manage portfolios for high net worth families. If you'd like to know more about not only the way we approach investment markets by our philosophy on life and business, feel free to subscribe to my weekly insights note. Go to www.fortressfamilyoffice.com and hit subscribe.

(Episode Introduction) 

Dion: In this episode, I interviewed Joseph Healy, co founder and CEO of Judo Bank. Judo Bank is one of Australia's largest and most trusted banks for small to medium sized enterprises. Starting from a PowerPoint idea in 2016, Joseph and his co founders have grown the business to now be valued at over 1. 5 billion.

They've got over 600 staff and they've got a loan book of over 9 billion. Throughout the episode, Joseph talks about Judo's philosophy of measuring twice, cutting once. He emphasizes the importance of planning in a super competitive environment. He also mentions how he took advantage of the big bank's weaknesses by providing high touch, high tech service and emphasizing the relationship building with their clients.

If you enjoyed the episode, we'd love you to leave a five star review and share it with family and friends.




Joseph Healy's Background and Introduction
---

Dion: Joseph, welcome to the show. Thanks for joining us.

Joseph: That's a great pleasure. Thank you for having me.

Dion: Do you want to just tell us a little bit about The early days of Judo Bank. I know you started around 2016. have you been surprised by how quickly it's grown? no doubt it's been a long journey as well at the same time. But, tell us a little bit about from start to now.

Joseph: I mean, starting any new business is a, challenging exercise that made people look at successful businesses, and they think it's relatively straightforward. But, but of course, people who have built businesses know that that's not the case. particularly building a bank, because banking is quite a regulated industry, and it's a very capital intensive industry.

And there hadn't been a new bank in Australia for decades. Thank So when we started thinking in 2016 about building what is today Judo Bank, we knew that the prospects of failure were quite high. I mean, everybody that we spoke to said that 90% of all startups of this nature will fail. therefore you should brace yourself for the likelihood of, failure, but, but we were confident that we had done our homework and we had built our robust business case.

We were a deeply experienced management team and I, I had 35 years in the banking industry at senior, many years at senior executive level. we had a philosophy in building the bank measure twice, cut once. careful preparation, thinking through the risks, making sure that we had ways of managing the risks.

(Clip: The struggles of building business) 

Joseph: And, you know, the, the proof of the pudding is that we've now got a very successful bank, but it was a roller coaster journey. I mean, we've got a bank today that's worth well over one and a half billion dollars, still a young growing bank. But I wouldn't want to paint a picture of A smooth journey from a PowerPoint idea in 2016 to a bank that now is across the country and has lent out over 9 billion to small mid sized businesses.

It's been, it was a roller coaster journey

Dion: Yeah.

Joseph: of many, days and weeks of sleepless nights. Dark tunnels with no lights at the end, walls closing in, running out of money, all of the things that you, that you would associate with what was then a high risk venture?


Did the Unflexibility of the Australian Market Cause Issues for Judo Bank's Launch 
---

Dion: How was it in the early days especially, but even now, trying to win customers, especially in the Australian market, which Aussies really have a love hate relationship with the big banks. Right. They all hate them, but then they all stick with them in a lot of cases. And there's a lot of inertia there, in terms of just the stats of how many people are with those banks on various levels, how difficult was, penetrating that that love hate relationship with the

Joseph: Yeah. It's a great question. It was one of those things that we spent a lot of time researching at the beginning, obviously, as I did our investors. But Judo bank is what I, I describe as a pure play specialist bank in that, all we do. is bank, the small to mid sized business economy. So we don't deal with large businesses and we don't deal with people like you and I.

(Clip: Post GFC Frustration at Big Banks) 

Joseph: We are pure business bank. Now I knew from all of my experience that so many small and mid sized businesses were deeply frustrated with the poor service that they were getting from the banks. And You know, after the GFC, when the banking industry consolidated, and the big four became 85% of the market, there was very little to differentiate one from the other, other than the brand.

The service was equally poor no matter which of the big banks you went to. so we, we were quite confident that if we could develop a proposition that addressed the frustration that small and mid-sized businesses have. And given just how complacent and if I can use a term, arrogant, the big banks were towards small to mid sized businesses that we, we had a fair chance of building something and tapping into a raw nerve that existed in the market.

and that proved to be the case, you know, the big issue for us was not so much. Could we attract customers? It was could we attract bankers? Because we wanted to go back to old fashioned, relationship banking where you had an experienced banker sitting across the table from the butcher, the baker and the candlestick maker and seeking to understand what the business was trying to do and then seeing how the bank could help them.

Now, that might sound like a pretty standard. Business proposition, but the world to change quite aggressively and there's so many small businesses were being pointed into call centers. Or dealing with faceless people or dealing with algorithms. The computer said no, and there was a real frustration in the small midsize market, to speak to somebody who could first of all, listen to you and understand what you wanted to do, and then had enough experience and skills to say, yeah, we can help you.

So we knew that that would work. and it did. I mean, we, we started up, we got our banking license in April 2019. we needed to raise one and a half billion dollars of capital, which we did. we've now got close to 600 staff across the country. We've got a lending out to small businesses of, I mentioned just over 9 billion.

I was confident that if we could get the right staff, because I do believe in a world that's become so faceless and so digitalized and digital technology really important. But when it comes to dealing with small businesses, the butcher, the baker the candlestick maker wants to speak to a person. That listens.

Dion: because it's become so impersonal, right? What's happened with the, the, the improvements with technology have made it more impersonal because, it goes down the path of scale.

Joseph: Correct. Now, I was confident that we could build a bank that was capable of scale. It still provide that touch models. We call it high touch high tech. So, because we started from a blank piece of paper, we weren't burdened with the legacy of donkey's years of technology and infrastructure. But we wanted to build a bank that allowed our bankers to spend 75% of their time dealing with customers.

And not 75% of the time dealing with the complexity of a big organization. And so that's why we said let's build a technology enabled business, but that had a human face to it. And that's high touch, high tech. And that formula works

(End of Clip) 

Joseph: . you know, I look at our customer satisfaction, which in banking language is a measure called NPS.

Our NPS score at Judo Bank is plus 66. And if you look at the average of the four major banks, their NPS score, the average is minus five. You know, it's like it's a huge gap 

because, big businesses have lost sight of the fact that a lot of customers want to deal with a human being, not with a telephone link or an on, I mean, online banking is important.

But when it comes to making big decisions. About should I invest money? Should I buy something? Should I sell something? They want to speak to somebody who exercises judgment, not algorithms.


How Judo Bank Balances Culture and Bureaucracy
---

Dion: And how did that process go in the early days in terms of you starting with a blank canvas in effect, right? And creating a new, what a new bank looked like, how do you go in terms of things like culture and how you want the culture to be and having robust systems and compliance in place, but not being burdened with bureaucracy?

Joseph: Brilliant.

Dion: What's, what's, how do you go from that?

Joseph: Right. That, that is, that is a absolutely critical question because it's a, it's a question that I grapple with as a company grows. At the end of the day, a dollar from judo in the bank account of a small to mid sized business is no different from a dollar from one of the major banks. The key is the experience leading up to that dollar hitting your bank account. What was it like dealing with judo bank? And it's not a question of products. It's a question or systems. It's a question of culture. It's had because culture is an intangible thing. And it's, and it's how did it feel to do business with Eurobank?

And for me, that was always going to be a question of culture. And how we could develop a culture that was deeply customer centric that didn't talk about products. It talked about how we could meet customer needs and how we could be fast in our decision making. So once we are getting to a decision within five working days, rather than five weeks. Was key to us. And I was motivated by a story of a company, which is a well known company today called Enterprise Car Rentals, and it was started in 1957 by a guy called Jack Taylor, who was in his late 40s then, and he had worked in the car hire industry. And he started this company called Enterprise Car Rentals with 17 cars in the United States.

Now this was an industry dominated by giants like the Viss and the Hertz and you know, the, you the other names that you could think of. And all they were doing was a car rental, which is no different once you sit in the car, whether you're driving a Hertz car or a, Avis car or a plus car. But the difference was the experience that when the customer called or went up to the counter, They felt there was a real engagement and a speed of getting from, can I have a car, to here's the car keys.

Dion: Yeah. Okay.

Joseph: Yep. And now today, enterprise car rentals is larger in market cap than the four big giants added together.

Dion: Yeah, okay.

Joseph: And all it does is provide rental cars. So I was motivated by that idea that our dollar is no different from the dollar of a big bank, once it's in the bank account, but the experience can be so different, you know, that you say, you say to your, you want, if you're a small business, it's just kind of a loan from judo that you contact your network and say, look, if the next time you're looking to borrow. Speak to Judo Bank, because A, this is all, they specialize in small businesses, they are deeply experienced bankers who understand this stuff, and they exercise judgment, not, not strict one size fits all rigid policies.

Dion: Yeah, there's a major difference, right? Because the, the big banks have gone more and more to a cookie cutter style system, which I mean, you look at the GFC even post that they just cut sorts, some types of lending on properties and things like that, things that might have been viable, but it just left big gaps in the market because they just said this is too hard from a risk point of view.

And so they just,

Joseph: Yep. 

Dion: So (Cholesterol clip) how do you, how do you put that into place and management manager as you get to scale?

Joseph: well, we, we've gotta manage that carefully because the, the history of small businesses as they grow is that they start to see diminishing, culture that they, and particularly in a, in a banking business, which is regulated and and the way that we are regulated is no different from the way the big banks are regulated.

So you've gotta manage that in a way that you don't allow the, you, you mentioned bureaucracy and I, I think about bureaucracy a lot now I, I, I draw a distinction when I think about bureaucracy, and I talk about this a lot, it's a bit like cholesterol. You, you bad cholesterol. So you've gotta have some healthy, good bureaucracy cuz we're a bank, but you don't want your arteries clogged up with bad cholesterol.

That makes you slow moving. And, and, and puts in danger the whole entity. So managing that really carefully is, is really what I spend all of my, the vast majority of my time, thinking about and working on how can we grow judo from a 9 billion dollar bank to a. 30 billion dollar bank in the next three or four years, but maintain the unique culture that's allowed it to be successful thus far, and not allow the culture, going back to my cholesterol analogy, not allowing bad cholesterol to clog up the arteries of the company and make it bureaucratic.

Dion: That's a great analogy. And you can apply that to so many aspects of compliance and regulation. You do need it, but you can go to either end of the spectrum and it goes too far. You can be too light or too heavy, like you say, and that's a great analogy. I really like that one.

Joseph: how we think about running company. we'll add another hundred staff over the next 12 months. And then another hundred or so. And as you're adding people and as you're growing, how do you protect the unique culture that's allowed the company to get to where it is today? As I keep on saying to people, it's not about Juro's products.

it's not about the money that we lend, because once it's in the bank account, it's the same as anybody else's money. It's the experience our customers feel when they do business with us. That's what counts. And That's cultural.


How Joseph Healy Transitioned from Big Coporate to Business
---

Joseph: That's cultural. 

Dion: when, when you first started the business and in terms of you've been with big banks in the past. Yeah. you've also put out a book called Black Belt, which sort of goes through the journey of, of Judo. and I read a couple of blurbs in there and one of them was around how you describe yourselves as not being, what was the wording?

No spring chickens when you started. So, How did you go when you started the business? Running a business all of a sudden, totally different ballgame.

(Risk but worth clip) 

Joseph: hugely different. I'd spent all my career inside big banks. I worked in five big banks, two of them here and three are overseas. we had huge bureaucracies, you know, and thousands of staff and all sorts of people to help you. Some not so helpful, but they were there. and then the idea then in, you know, in the early to mid fifties of saying, let's start, let's build a new bank. Knowing that the risk of failure was 90%, there thereabouts, Let's give it a go. And the reason why myself and David Honorary, and Chris Bayless and a couple of others decided to give it a go, had a lot to do with wanting to live a life of purpose and a life fulfilled, I could have stopped working or, or continued working in big banks and, and, and lived quite comfortably.

And, you know, in, 10 years time, sit down on a Friday afternoon with my gen tonic o on the porch and think life has been good. But I wouldn't have thought like that. I would have said, I wish that I had done this life unfulfilled. So it was that burning sense of purpose of wanting to give it a go, believing that there was a big market opportunity, knowing how banks work, because having lived all our lives in that, that we could, that we had a good chance of making it work.

But it was going to be a very, very tough journey, you know, and we had 86 meetings or four times around the world. Before we got the first dollar you know, because people kept on saying to us, we like, we like what you're trying to do. And we like you guys, you've got loads of experience, but you're never going to get it up because the big four banks will just kill you. Or customers won't do business with you. Now, there was one, there was one meeting in London with a guy called Joe Giannamori, who was a very experienced investor. He was a, he's a good friend and he was very helpful. He said, look, you guys have got a good business plan here, but the chances of you succeeding are very slim. You could get another job and set up a bank, you make a couple of million dollars a year and live a nice life. Why do you want to take this risk? And we kinda said, look, we want to give this a go because otherwise there's gonna be this big question in the future about what might have been. And then he said, look, don't take this the wrong way. Don't take this the wrong way, but you know, spring chickens, right? because

Dion: Fair enough.

Joseph: you never think you, you, I mean you, you never think about these things. But if it is being nice, he wasn't being offensive. He says, look, you're not paying tickets. Why do you want to put all of you, all of the 35 years of hard work? And, you know, the savings that you've built up, why would you want to put that at risk?

So that did make us think about it. We are no spring chickens, but we're going to make this work.

Dion: And when you then go out to, you're running a business, now you've got a presumably. Take on investment that sort of stuff and you've, how did that go initially? I mean, was it met with, you know, people like the idea, but skepticism in terms of the ability to, to make it successful, not because of your own ability, but because of the market forces, the banks want to crush you.

People might be that inertia with customers. How did that go?

Joseph: That's exactly what we got. we had 86 meetings because we kept every meeting we went to, we kept notes, 

what was the feedback? there's never a bad meeting. We had 86 meetings and people said like, like the business case, like you guys. Come back when you made a dollar, like the business case, like you guys, you'll never get off the ground.

And so we kept on hearing no, people said no, but we kept on hearing maybe. And the maybe was that I kept on saying, look, the fact that you've got 86 meetings with some really quite influential people tells you there's something here. You've just got to try and convince them that whilst the market is dominated by four big giants, Customers don't like them.

Small businesses just do not like them. And so if you can develop a credible alternative. It's well capitalized because we were very clear. We didn't go and say, look, we want to raise 10 million or 20 million. We said, look, this business is going to need 1. 5 billion of equity over four and a half years in stages, before it gets to a stage of generating its own profits.

So we're very clear about that. And that was the other thing. Actually, you got more chance of getting a meeting if you're asking for a billion than you have asking for 10. Yeah, 

with serious people, you know, serious people, we select, 

we've got a business idea, we need one and a half billion and they say, okay, come and talk to us. But you, you had to be resilient. I mean, we went around the world, I'd say four times 86 knockbacks. We couldn't get anybody in Australia interested because they knew the market was controlled by big giants. People overseas said, well, Why don't you guys get investment locally first? I mean, if what did the local guys know that, you know, that they're not supporting you.

But we kept on going. We kept on going. People said no, but we heard maybe. We went back. We went around the world, met people three or four times. We put our own money into it. It was very important that we mortgaged our homes. sold off some investments put serious skin in the game so that people could see that this was, we were truly committed to this.

And then eventually, and I'll never forget this, it was in New York. I won't mention the name of the firm because they might be embarrassed by it, but we went to see these guys at a leading investment bank. And it was about four, quarter past four. And we had, we had a meeting until about five o'clock.

And then they say, what are you guys doing afterwards? We still, we're going to go have a beer. And then go and have some dinner. And they said, we'll, we'll join you for a beer. So these four guys came down, relatively good, good guys, came down, we had two or three beers, and we had a steak, and they said, look, we're in, we'll, we'll put 20 mil in, if you can, if you can get another four parties to put 20 mil in, right? That was the big breakthrough, because then you've got 20 mil and you can talk to, you know, now, the reason I mentioned that story is that that deal was done after 45 minutes of a formal meeting in two hours of drinking beer, right? And so the point is that different, you know, some are very serious, some want detailed information packs, some want to, what people are really doing is looking at, you know, they talk about the jockey and the horse. The horse is the business case and the jockey are the people behind the business case. Now, if the business case is an old nag, it doesn't matter how good the jockeys are, but if the business case is half decent, they look at the jockey and say, yeah, you know how to ride this horse and you know, you've got a good chance of winning.

And so the people got to know us and they said, look, yeah, we're, we think you know what you're doing. We get it. We will get, we will back you guys. And then it just took off from there.

Dion: And so that's really interesting. So, because the importance of relationships and forming rapport with people, it's at all levels, right? So important. And presumably they obviously thought this was good from the formal meeting, but then afterwards, so that closing that, that, investment, it hinged on them having a few beers with you, not the beers themselves, but it's the getting to know you phase.

Joseph: Correct.

Dion: And then it's because that's two more hours or longer of really drilling down, getting to see the type of people you are, that sort of thing. It's a whole different dynamic to the, to the interviews, right? That you just can't do in a, in a boardroom setting.

Joseph: Yeah, or, or, or, or delivering a lengthy document, a business case, because they're sterile documents, you know, that are a PowerPoint. I think at the end of the day, people want to be able to look at you and say, yeah, yeah, these, these people know what they're doing. And they're serious people. And, you know, they, and they know how it works.

So, look, it's, you make a great point about, yeah. In a world that's become so dehumanized, become so digitalized, big things happen face to face,

Dion: Well, it was the same philosophy in terms of your business really, wasn't it? It's the same. You cut your own customers want to deal with somebody face to face. It makes sense that your investors would, and the relationship you build there was going to be done, not just face to face, but in a more. In a deeper relationship side of things from a business perspective to, to really get to know who they're dealing with.

Joseph: yeah, yeah, I

Dion: Fascinating. It's really fascinating.

Joseph: yeah, I'm a big believer in it, big, big believer in, in building relationships, because, and, and getting a feel for, for the individuals involved. When we're lending money to a small business, we're not, we won't look at the financials. We want to know the business owner and owners and say, do that, you know, you're exercising judgment.

Do these people know what they're doing? How committed are they? Are their plans sensible? Then let's have a look at the numbers,

Dion: That's a harder, that's harder to custom or not harder because that's harder to put a cookie cutter type around it, which is why the big banks don't do it, right? It's because it's very hard to get that that comes with experience in your bankers and knowing and been around for a long time to understand how it all works.

Joseph: Yep. Well, that, but that's the way the banking system used to work

Dion: Yes. Yeah, yeah, yeah,

Joseph: before industrialized and centralized and, and became product driven and it became deep personalized. And, you know, customers were given very little to choose from. That was one big bank or another big bank. And it was the same experience.

And that was why we felt that, that, you know, the small midsize business economy is so important to Australia. They get such a poor service from the big banks that if you could, if you could build something that was clearly sustainable, clearly scalable, that was well capitalized and run by people who really knew the business.

That there was every chance of being successful. Yeah.

Dion: Yep. Yep. No, it makes complete sense. It's funny because you talk about the banking system, how it used to be at or the bank industry, how it used to be. I remember when my wife and I went and bought a different type of lending, but I remember when we went and bought our first place. 30 years ago, not quite 30, 20, 27 years ago, and you'd get, you'd wear nice clothes and go see the bank manager and they, they were wearing a suit and you'd be, you know, putting on your, your best face and, and you were sort of interviewed and hopefully they liked you enough to say yes, you know, it was, it was a different ballgame.

You wouldn't just send it online or whatever. You, you had to sort of, it was like a job interview, but for your, for your home loan.

Joseph: Yeah. There was an old joke when I was starting off in banking is that you'd go to see the bank manager and you'd ask him how you stand for a loan. And he'd say, you don't stand you kneel.

Dion: Yeah, but often they, it's all gone now, now it's like when they want distribution and they want to get the money out the door. It's a different ball game. 

Joseph: Yeah. But lending money to people in particular, I think particularly businesses, small businesses. You want to make sure that that they've thought through the risks, because, you know, you can wreck, you can ruin somebody's life by lending money that they shouldn't really be borrowing, or at least borrowing as much.

It's not just a question of a business getting going bust. When a business goes bust, there's families behind a business. And I'm very conscious of that. I mean, being responsible in the way that you lend money is important. And saying sometimes to a business, look, I don't think this is a good idea or, you know, 5 millions too much.

The right number should be 3 or whatever

Dion: yeah, yeah, yeah,

Joseph: you're thinking about their interests as well as the banks interest.


The Biggest Learning Joseph Healy got from Starting Judo Bank
---

Dion: yeah. Okay. No, that's interesting. 

From when you started to now, what's, what's the, the biggest thing that you've learned from when you sort of started day one versus now? 

Joseph: Well, I think you learn over time that. Leadership is a privilege, and it's a huge responsibility, and you cast a long shadow when you're a leader in a business, and you've got to act responsibly. You've got to be able to make tough decisions, but you've got to be able to develop a culture where people feel safe and where people can grow.

And people feel confident in being able to raise, put their hand up. You've got to be decisive in an industry that is indecisive, where it's slow moving. So I think being, being decisive, using your gut, you know, the old head, heart and gut thing is, is something I learned 20 odd years ago. And it's as relevant today, as it was ever has been that you've got your, your instincts will tell you things.

And. And, you know, if, if, if you've got a doubt about something, there's no doubt about it, right? Because your gut's telling you something and backing up instincts. Surround yourself with good people. You've got to be confident in yourself. You know, if you've got good people work, people, everybody as good as you, if not better, it makes life so much easier.

So, if your ability to attract high caliber people and feel comfortable yourself that you're, that you're, you're, you're leading for a reason, but in good people want to work with you. I think the ability to do that is, so important. I think also an important lesson for me is, start with the end in mind.

Whenever you're doing something, whether that's starting a business or in an established business, you think about the future of the business. Go forward three to five years and say what I want this to look like and then work from there and then the ability to get off the busy dance floor of the day to day and go up onto the balcony and just take stock of where things are at and how things are looking and moving so that you reflect on where on the progress that you're making.

Now, if you stay on the busy dance floor of the day to day, you, you, you can miss and miss big things. So it's the ability to kind of get off that dance floor, onto the balcony, reflect a little bit about how well things are going, what should I be changing, if anything, and work towards that vision, which is, you know, there's another way of talking about starting with the end in mind.

So those are the things that are quite important for me, you know, there's no magic formula there, leadership means lots of different things, but, but for me, in running a bank, having a strong sense of where we're heading and how we're going to get there, spending enough time on the balcony and not getting lost on the dance floor and having really good people.

And you need and you need to be resilient. I think that's an often underestimated quality in somebody, you know, the ability to say, look, I mean, when you've been experienced in life, you know that there's going to be days when things are going to go horribly wrong, right?

Dion: There's the ebbs and flows.

Joseph: yeah, but just be measured because people, people are looking at you, you know, if you've got a big, something goes horribly wrong, they want calmness, they want reassurance that we're going to get this fixed.

No panic. You could, there could be panic inside, right?

Dion: Yeah, yeah, yeah. It's the display. They, they, they, they're gonna, it's important what they see in, in you from the outside is important, right?

Joseph: Absolutely. And the confidence that will fix it.

Dion: 


How Judo bank and Joseph Healy Handle Crisis
---

Dion: Yeah. And in terms of some of the, the, the battles along the way, no doubt there's been many, but yeah, some of the more obvious ones in recent times, obviously COVID. And also in the last, you know, earlier this year, we had those the banking issues in the U. S. with Silicon Valley Bank and those sorts of things, those sorts of things when they happen, how do you, how do you approach that?

You know, how do you sort of, what's your first instinct to tackle that and talk to your people and that sort of stuff?

Joseph: Well, I, I, I, I've always been a believer in, I'm not sure whether this was former U. S. President Barack Obama or one of his advisors, but someone said, never waste a crisis. And the thing is that in the banking industry, as soon as there's any whiff of crisis in the environment, you know, COVID or whatever it might be, the drawbridges get pulled up, the shadows come down, and it's all everything's off.

And then a lot of good businesses get stranded. And so I do genuinely believe that in crisis environments, if you hold your nerve, and you're quite strategic, quite measured, You can actually turn a crisis into an opportunity. And I have always believed that. And I never, you don't want to live in a world of crisis, but we, you know, judo got its banking license in April 2019. And then. Covid hit these shores in March, 2020 and, and, and we've never really been out of a crisis. It's covid and now we're in an economic crisis and, but you know, I kind of feel that jus a bank that was born in crisis and, and, and it plays to the strengths of the management team that there's opportunities in crisis environments.

Cause there are always good businesses out there. and the banks because of the cookie cutter approach. Just pro back\


The Most Important Aspect of Joesph Healy's Book: Black Belt
---

(Clip: Continously Improve Culture) 

Dion: Yeah. I read in your book, Black Belt, I read these key lessons. They are find and stick to your niche. One act like a David and succeed as the underdog against Goliath be 100% clear on your purpose and continuously work on your culture. My question is, if you had to pick one of those, which one would you say is the most important?

Joseph: the last, the culture

Dion: Right. Okay. So that would be the focus. If you could only pick one, that would be, 

Joseph: that 

would be it.

because you, everything, everything else becomes second order if the, if the, if the culture is not where you want it to be. And you can kind of think about a business where people are not talking to each other, where nobody's interested in the customer, they're interested in politics. You know, a great culture allows you to solve all sorts of problems. A bad culture just creates all sorts of problems. So it's culture, culture, and culture.


Joseph Healy's Biggest Strength and How it Helps Him Succeed
---

Dion: What would be, what would you say your biggest strength is?

Joseph: My biggest strength would be my vision and resilience. That when I am, and it's a personal characteristic, that when I start something, I mean, I think about things carefully. So I measure twice and cut once. But once I made my mind up to do something, I will see it through. So there is, I think the resilience, the sense of vision about what I'm looking at judo in 26, 27 right now, the decisions that we're making and the investments we're making today are not about judo next year, they're about judo in three or four years from now.

And then the resilience to kind of. execute on that vision or the strategy and not to be distracted, not to be put off. I think those, I would say those are my, are personal characteristics that are quite a key part of the way that I lead.


Joseph Healy's Biggest Weakness and How He Overcomes It
---

Dion: In terms of when you first started out, especially what sort of weakness, what was your biggest weakness, I guess. And how did you overcome that?

Joseph: Well, the biggest weakness was that we'd never done this before, right? Because we had all, we'd all worked in big, big giants of companies and you, and in big giant companies, you can go hiding, you know, that, you know, it's very easy to start blaming other people and. and have meetings all day long and write big memos.

So the biggest weakness is that we were embarking on building a bank from a PowerPoint or an idea that we'd never done before. But it goes back to resilience and it goes back to belief. You know, you've got to back yourself and, and if you, if you've thought about it carefully and you believe you can do it, go for it.

Don't, and don't have a plan B. That was the other thing about building. No plan B, right? Now, most walks of life, people say you have to have a plan B, and I get that, but when you're doing something like this, it's too tempting to go to plan B when plan A looks difficult. 

So, one plan, one plan only, and make it happen.


The Advice That Led Joseph Healy and Judo Bank to Success
---

Dion: You're all in and there's no, no turning around. Fair enough. I get that. What's the best advice you were given along the way?

Joseph: Well, I think the advice, the best advice are make, make sure that we stay, that we're a customer centric bank, that we, that we stay close to the customer, that we choose our shareholders carefully. That was, that was really important. You know, when you're trying to raise money, and particularly if I'd 86 knockbacks, There's always a temptation to take the first dollar that comes its way, but when you take money from people, you're taking more than their money, you're taking them. And they can have agendas that are different from your agenda. It's like a bad marriage or a bad relationship. It can be really difficult to get out of and it can kill you. So I think we were given strong advice about choose your shareholders really carefully. But then, I mean, the one business person who's had the biggest impact on my career and somebody who I still see occasionally is the current chairman of Westpac, John McFarlane, who, and John's, is a career banker.

He was a CEO of A and Z Bank here About 10, 15 years ago, 

checking Barclays Bank in the UK, a very experienced, executive. And I learned a lot from him because I worked for him when I was in my early to mid 20s at Citibank in London. And, you know, the, the, the things that kind of stuck in my mind is setting a high bar, you know, don't, if, don't set the bar a meter and where you can comfortably jump, set the bar at two meters.

And it's better to fail at 1. 8 than succeed at 1 or 1. 2. So set a high bar, because if you set a high bar, you'll, you, you might surprise yourself that you can actually achieve something that you never perhaps thought was possible. Be very strategic about business. Don't drift. Be strategic, be resilient to the point that I made earlier and embrace change and manage change.

Don't see change as a threat, but see change as a necessary part of running a business. 

And a very strong strategic mind about what is it you're trying to build here and the importance of culture. And I can say hand on heart that I learned a lot from John over the years, certainly early in my career but having observed his career through different organizations there are some strong and defining characteristics That never leave you, actually.


Joseph Healy's Biggest Business Inspiration
---

Dion: okay, in terms of other sort of business people or entrepreneurs that have sort of inspired you along the way. Have you got any that come to mind?

Joseph: Oh, there's a lot of, you know, people that have inspired along the way. I mean, I, I, I'm staying in the banking world. I'm a huge admirer of what Jamie Dimon has done at J. P. Morgan in the United States. And probably, the best banker of the last 20, 30 years, a lot. I put John and that in that category is up in that category as well.

I'm a huge admirer of what Frank Lowy and the Lowy family have done here in Australia with West West. Westfield, I mean, Frank's story, which is well documented about coming to Australia you know, after the, the Second World War with nothing and then building an empire, um, a hugely successful business huge admiration.

for Frank and, and, and other people like that. But the, again, you learn a lot about resilience because these things, when people look at success stories, you think, well, that was great. Look how well they've done, but success is a product of hard work.

Dion: that's just one part of the result of the journey and the trials and tribulations of knockbacks and problems and solving things and, and, but never giving up is the bottom line. Right.

Joseph: Never, ever give up and never, and never lose faith in yourself. Right. Because. You, we're all defined by certain qualities and our qualities and our motivations and our ambitions take us in different directions. But when you know yourself, warts and all, because, you know, none of us are perfect. And I'm certainly I've got more than a fair share of blind spots.

But, but knowing your strengths and playing to your strengths. And accepting that from time to time you're going to fail, but actually see failure as an important experience, not as a mistake, a disaster, but actually say, I've learned from this and it's going to make me stronger. And backing yourself, the ability to be confident in who you are, warts and all, you know I probably, I should have been more confident in myself earlier in my career.

I built, I kind of built my confidence up over time. But you know, there's an, there's an old saying, I can't remember who said it, but, you know, youth is wasted on the young. And I, I wished if I was looking back that I'd have been a lot more confident in myself then, say 20 years ago than I, as I am now.

Dion: Yeah, no, no, that makes sense. But it's funny because part of that journey is also what gives you that confidence at whatever point it comes, right, because you can't sort of misstep, because there's lessons that you might not otherwise have had and all those sorts of things. But you're quite right.

It's you look at even you look at your look at my kids and different things you think you'll just do that it's like easier said than done right because you you've got extra 20 or 30 years on them and you can see well you can just try that that doesn't matter but to them it does you know you've got to get to that point down the track it's all of that sort of stuff it's a learning curve

Joseph: Yeah.


The Book That Led Judo Bank and Joseph Leady to Success
---

Dion: what about what about books any any any great books beyond well we've got black belt that's number one for listeners

Joseph: Yep. Black Belt's a highly recommended read. I, I'm an avid, avid reader, but when I think of the business books that I've read over 30 odd years, And if someone said to me, which, which book would you recommend? I would recommend without hesitation the book written by Stephen Covey called The Seven Habits of Highly Effective People.

Dion: Yeah, great book.

Joseph: That book is, I think, has sold about 40 million copies. And it's still, if you walk into any bookshop, it'll be there. And I, I look, I pick that book up every couple of years and read it. 

Dion: same. It's, it's absolutely, must, must read, must revisit.

Joseph: yeah. So that's the one that I would get out, if there was one book I could recommend. It's more than a business book, but the principles go, you know, go back to how you should be thinking about yourself, and about how you should be thinking about leading.

Dion: Yeah, it's an interesting one because the, the title itself, especially for younger people, it comes across as a little bit boring. It's not sort of, not fancy, but the, the lessons within the book, and there's so many of them, are really profound just in terms of how to operate, how to manage time, how to think around things.

It's even just perspective on things.

It's just, it's just a brilliant book.

Joseph: And starting with the end in mind,

Dion: Yeah,

Joseph: and also putting yourself in some and the other person's shoes. So, you know, the old one of my favorite pieces of advice. And actually, I was in a meeting about an hour ago inside the bank, and I said this to people. Before being, before being, for being seeking to be understood, seek to understand.

So instead of saying Charlie's a pain in the ass, he's not cooperating, stop. Ask Charlie, try and understand where Charlie's coming from and why he thinks that way. And then once you've done that, then you're in a position to form a view, but too often we kind of default into a view without any much information, and quite often so little understanding of where the other person's coming from.

I mean, I do it 

Dion: yeah, it's easy to do right and I actually think it might be in that in that book there was a story I remember that stuck with me I think it's in that one talking about exactly that point 

He was he was on the train or the bus or whatever 

it 

was and there was kids running up and down the aisle and the parent wasn't paying any attention.

And he's getting more and more annoyed until the point where he said something about it. And I said, Oh, sorry, I didn't realize I'm in a daze. My wife just died or my wife just got cancer or whatever it was. And he went, Oh, wow. Suddenly his whole perspective on it changed. And that stuck with me, that story, because it's, you just don't know what other people are dealing with.

And when you zoom back out a little bit, it doesn't matter as much as what you think at the time. Right?

Joseph: spot on.

Dion: Yeah. 

Joseph: But these are, these are, these are lifelong lessons that in Covey's book that, that, that will serve you well. In all aspects of life.

Dion: the, the other one that I, that I love on the topic of resilience. I'm not sure if you've read this one or not is a grit. By Angela Duckworth.

Joseph: Yes.

Dion: That's brilliant. That's, that's, that's really good. That's the one where if people say to me, what's the one book, it's not necessarily a business book, but it's the one book I would get my kids to read.

I have sent it to them. I don't know if they really read it or not. But that's the one book that I would say, if you read that and you've got that resilience, a little bit like culture, right, resilience in that way is one of those things that if you understand how to be resilient, how to have that grit then you can solve most things.

You can stick with things long enough to make whatever else. You need work to work, you know, that, that's a, that's a really good one. 


What's Next for Judo Bank 5-10 Years Ahead
---

Dion: What about what's next for judo in the next five, 10 years? What's, what's, what's ahead.

Joseph: Well, we want, we want to build this into a world class SSE bank. You know, we've, when, when we, when we were designing the bank back in 2016, we saw three horizons. We horizon one, 2016 to 2021 was build a bank, get a banking license, get to market and demonstrate that you can attract customers and you can make money.

And then Horizon 2, which is 21 to 26, is then invest in the infrastructure of the bank so we can scale it, and which is where we are today. Continue to grow, but build the bank for scale. And then Horizon 3, which is 26 and beyond. Is demonstrate world class SME world class bank metrics, you know, and that, so I don't want, we're never going to be the biggest bank because that's not a measure of anything really, but we can be the best, you know, we can, we can be the go to bank for small to mid sized businesses. And, and, you know, we're, again, we're not, not seeking size for size sake, but the one thing that's been a huge. source of pride in the very short history of Judo Bank is that we have attracted some amazing people. You know, really good bankers who were so frustrated with the bureaucracy and lack of customer centricity in the big giants that they came to Judo with real passion, real purpose.

And they're not here as employees. They're here to help build something special. I keep on saying to people, look, if you, if you want to work in a world class asset bank, come back in four or five years time, and we might have a job. But if you want to help build a world class bank, join us today. And then when you look back on your career, you're not employee number 34, 020.

You spent a big part of your career building something special that's made a difference. To the small and mid sized business economy in Australia. That's a source of pride and achievement versus saying I worked for 10, 15, 20 

years. 

Dion: I love it. I think that's, that's really great to hear. And there should be more of it because I think that's what people generally would love to have in terms of their business relationships. that type of mentality as opposed to the faceless screen or the phone and that type of thing. So I really love the way you guys go about it.

Joseph: Thank you. Thank you.

Dion: Joseph, thank you very much for coming on the show. It's been fantastic. We've loved your insights and hearing about the journey that you've had and, and also Judo Bank. 

Joseph: It's been a great pleasure. Thanks very much. 


Outtro
---



Dion: Thanks for listening to this episode. I hope you enjoyed the show. If you did, we would really appreciate if you would leave a five star review and share with family and friends. Thanks.