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Herman Gref: I am a long-run player

Sberbank CEO in Top Officials, a special project by TASS
Andrey Vandenko 
Andrey Vandenko

Andrey Vandenko was born on November 8, 1959 in Lugansk, Ukrainian SSR. In 1982, he graduated from the Taras Shevchenko National University of Kiev with a degree in journalism. Since 1989, he has been living and working in Moscow. For over 20 years, he has built his career as a journalist specializing in interviews. His work is published predominantly in Russia’s leading mass media outlets, and he is the recipient of numerous professional awards.

Part 1
About Besogon, educational models, soft skills, bad behaviors, Akunin, and Khoroschool

I wanted to save this for last, Mr. Gref, but I feel like starting with dessert. Why are you in such disfavor with Nikita Mikhalkov, who has steadfastly lashed out at you in three consecutive episodes of Besogon (translator’s note: Nikita Mikhalkov’s own show; ‘besogon’ is Russian for ‘demon banisher’)?

You know, I find it difficult to guess; we should ask Mr. Mikhalkov himself. I’ve watched two episodes—one end to end, and one just in part. They are too long.

Mr. Mikhalkov did a very bad job in that he misquoted me, and repeated it several times.

This formed part of your presentation at the St. Petersburg Economic Forum in 2012, where you (to put it frankly) set ‘em ablaze, calling democracy a dreadful thing.

As you may already know, this was not a presentation; I moderated a discussion panel dedicated to a serious topic: how the public governance model will evolve after radical shifts in all the underlying assumptions and as the vertical communication model fades over time.

A horizontal, peer-to-peer flow of information, when an event becomes known instantly worldwide, will require a radical change in governance models. Traditional democracy is not going to work. Neither is authoritarianism.

The panel was called ‘The way out of governance deadlock: mob wisdom, or authoritarian genius?’ What should we do in a situation where asymmetrical information has ceased to exist as a phenomenon? All the panel participants began very actively supporting the democratic model.

Which seems logical.

I realized that the session was about to fail: no debate. So, my remark was intended as a provocation, to liven up the discussion in my capacity as panel moderator; but, it was wrenched out of context and presented as my point of view, which was absolutely not the case.

On closing the panel, I spoke for myself, saying we had no other option but to change the governance model and engage individuals in the governance process. And the government should keep an ear out for what people have to say. Crowdsourcing is all about engaging people in governance decision-making.

Indeed, the logic in the following eight years showed that the world is witnessing a breakdown of governance models from the past century. Regardless of how they were designed, whether democratic or authoritarian, all models now require radical reinvention; this is in fact what I talked about back in 2012.

I find it surprising that Nikita Mikhalkov, an esteemed professional, either never watched the video he was referring to and simply snatched the quote, or he understood that the quote was in fact a provocation from me as a panel session moderator and used it as manipulation, in which case I still fail to understand its purpose.

This is not the only allegation Mr. Mikhalkov has made about you. I am talking about online education and the program which means that exams, textbooks, diplomas and eventually printed books will be abandoned—and the horrible Herman Gref is behind it all.

To tell you the truth, I never had a chance to review the program mentioned in Besogon; I just heard of it via Mr. Mikhalkov. With regard to education though, that is a subject worthy of a separate discussion; a discussion about our future...

…a future that is impossible without education. It is a factory that produces a competitive human being, fully adapted to the new, quickly evolving environment, and capable of making decisions based on incomplete information while possessing a high level of soft and social networking skills, cognitive reflexible flexibility, etc. Who is this human being? Where should they receive their education? Is a traditional school, the kind that all of us went to, capable of becoming a place where the children of tomorrow will learn to adapt to the circumstances of their everyday life, which might sometimes cause severe stress?

The answer is obvious: no, of course not. Today’s schools fail to answer a whole range of questions, and the best way to prove this is to ask students themselves. Ninety-two percent of student respondents highlighted that they are dissatisfied with modern textbooks, finding them dull to work with, and they are not content with current teaching formats either.

I think it always was like that—50 years ago, 100 years, even: ask the students back then, and they would have answered along the same lines.

You know, I disagree with you there. Things do change. You are right in that children are always highly dissatisfied with the current process. However, 92 percent is the highest figure yet obtained over the most recent two decades of observation.

How would you explain this?

The training model has grown obsolete. The teacher used to be the only carrier of knowledge, with the textbook being the only source from which such knowledge could be obtained. Study your textbook, give a correct answer to your teacher, and get your good mark. That’s it! No one asked for more from school.

Today however, information sources are highly diversified, and unfortunately this includes many fake sources. Forms of communication are so diverse that it becomes impossible for an ordinary textbook to compete.

The question arising from all this is: how should we transform the 21st century school to raise student satisfaction and training effectiveness, so that we provide students not only with knowledge, but with skills as well? This is what the whole world is grappling with: what should the 21st century education model be?

I have been actively involved in school education for the last decade and, speaking frankly, my initial perception of where the root of all problems lies has changed a lot over the years. There is no simple answer to this question.

Once again, this is what the whole world is looking for. Some models are more effective, and these, as a rule, exist in smaller countries, e.g. Singapore, Finland, New Zealand, whereas all larger states still face significant problems in education. And this is independent from the education model.

So, there is no one-size-fits-all formulation?

The formula is that which all teachers follow in their training today. The model was developed by von Humboldt, in olden times, and was implemented ubiquitously. Pupils were seated in rows, with teachers delivering the material and then checking students’ understanding. We use standard tools to train children to give standard responses to standard questions, check their output via the Unified State Exam, then release them into the university world. From then on, everything will depend on where they have landed. If they are studying at a technical university, with more hands-on training, the stress they undergo will be enormous.

Another ordeal is when Sber receives new graduates. I remember students asking me, ‘Is there any difference between theory and practice?’ I always answered that theoretically there is no difference, but in practice it’s huge: they will have to face a totally different reality.

Studies have been undertaken in some countries to find out how much knowledge the best graduates from the best universities will retain two years after graduation? These studies were undertaken by Stanford, Harvard, and several other American universities. It turned out that graduates could display, on average, five to twelve percent of their basic course knowledge. Anything not related to practice and skills subsequently needed in their professional careers would evaporate instantly.

Another big study of the successfulness of the best university graduates showed that, ten years on from graduating, it was not normally straight-A students who rose successfully through the ranks, but mainly the C-grade students and those who did not display any outstanding abilities during training.

It turned out that so-called soft skills, and the degree to which these are developed, are much more important for our careers, our success in life and, most importantly of all, for us to feel happy.

What is your definition of ‘soft skills’?

There are three types:

First, social skills. These are social communication skills: the ability to collaborate, to speak in public, to communicate one’s views, and to hold a public discussion. Everything that makes us capable of interacting within a team and communicating successfully.

Second are the cognitive skills that determine our competence in terms of mental process. Consistency of thinking is very important; a process that combines analysis with synthesis. People can be described as analysts (those capable of analyzing any situation in minute detail), and synthesists (those who can synthesize obtained data in a timely fashion and adopt a bird’s-eye view of a situation).

Creativity is a vital quality for schools to develop. Dashboards demonstrate that primary school children start their learning at creativity indices close to ten, on a 10-notch scale, but they unfortunately slide to a meager three by the time they leave school. One would think that a child should develop the taste and motivation to invent something new; however, standard methodologies turn them into conformists. This may be one of our biggest losses.

Critical thinking is the ability to analyze and process information, then to structure it and arrive at a conclusion.

A consequent skill of strategic importance is decision-making. We do not teach children or older students to do this. While the theory of decision-making is a wide-ranging science, sadly no such subject is available to study in the majority of our universities, let alone in our secondary schools.

Lastly, there are emotional skills: the ability to control yourself and read your own and other’s emotions in order to communicate successfully. This is what soft skills are all about.

We have gone a bit too deep… Let’s return to the surface and to the issue of Besogon waiting for us there. Mr. Mikhalkov warns that the criticism he is facing is but a very expensive paid-for job. According to him, USD 600,000 have been spent on the campaign against him and Besogon. What is your contribution to this amount, Mr. Gref?

Speaking frankly, whatever I say it will not sound good...

I have been an active public figure for twenty years and have had a lot said about me, but never in my life have I paid anyone to say something (or nothing) about me. Similarly, Sberbank has never blocked any negative materials... You know there are ways of preventing inconvenient publications, but we have never done it; nor have we paid anyone to say things they do not actually agree with. I do not want to go into detail about it. Paying for such things means a person has no self-respect... As you can see, I try to avoid speaking ill of anyone, including Mr. Mikhalkov. Everyone is entitled to their own point of view.

Mr. Mikhalkov says that he has never had any dealings with Sberbank, and has never approached you or the bank with any requests. Is this true?

No, it is not. Once again...

Could you give me more detail?

I would not stoop to it. Mr. Mikhalkov and I know each other very well, and we have met in different and (let’s say) juicy situations. I’m not going to comment on that. Mr. Mikhalkov has approached us many times, both in writing and with oral requests...

Has he got your support?

That depends. Sometimes, yes. Sometimes, no. Once again, it’s quite irrelevant. You see, I am a stayer, a long-distance runner. Time will sort things out, so why bother now? I do not have to justify myself, to Nikita Mikhalkov or to anyone else. If Mr. Mikhalkov ever does for education a fraction of the things done by me or our Sberbank team, then there will be something to discuss. Criticizing something one has never experienced is the easiest thing, but an unworthy thing to do! People should look at what we are doing for education.

May I ask what kind of pupil you used to be?

I was not an A-grade student.

So, are you one of those former C-grade pupils who ultimately made it?

No, I was not a C-grade student either. I might be wrong, but there were two or three B-grades in my school certificate. Actually, I had acceptable grades, but I was a horror in terms of discipline.

More details, please…

Well, I’d better keep silent. It would set a bad example for school children. I was a bully, I fought, I disrupted lessons, and so on and so forth. The whole package... a true troublemaker.

Did you flunk out of school?

Thankfully, it never came to that. But you see, I was always a hyperactive child. I still did well at school, because it was a family rule. However, while my elder siblings were A-grade students, I was the black sheep of the flock, according to my teachers.

Was that in Kazakhstan?

Yes, I went to school in a small town on the Irtysh River, with a few tens of thousands of people living there. My family was exiled from Leningrad, and we moved to Kazakhstan.

You did not actively move, you were moved…

Actually, not me, but my parents. I was born in exile.

What do you remember about your school days?

I have positive memories, you know. We had different professors, including some very strong ones – they had also been exiled, from Leningrad.

Ethnic Germans?

Mostly, but not all; there were also some Dutch and Greek people. As a result, the quality of teaching was uneven. We had excellent teachers for natural sciences, while subjects such as history and the Russian language and literature, had huge gaps in terms of teaching. The history teacher was also our school principal, and we used to tease him all the time. It was a typical drill routine; we had to learn texts by heart and recite them. Thus, it was more of a speaking exercise than something leading to a deep understanding of facts and their relation to the present. As a result, I rediscovered history much later, when I read Klyuchevsky and a long list of other authors.

To end with Akunin…

Yes, he is my most recent discovery. I began reading his History of the Russian State out of curiosity: I did not expect to find any historical science in the book, and thought it was pure fiction. But I wanted to see how Akunin’s views evolved in the process of analyzing the history of Russia. I believe the book to be one of the best historical studies recently published. Well, I remember trudging through Karamzin, whereas I gulped down Akunin’s book. Alas, there were no such books at my school.

What made you turn to education a decade ago?

I read a book on Psychohistory. The term caught my eye. I had seen it before, in Nietzsche’s works. I looked up the author: the book was not by Nietzsche. So, I thumbed through the book, began reading it, and could not stop.

Lloyd DeMause, an American, is a fabulous scientist and a man of great erudition. He asked a simple question—what has been driving the evolution of human society—and found a critical factor that had never been studied by science. DeMause proposed a new way of classifying and segregating different historical periods, based on factors determining the speed of social development. He suggested that the basic factor was the means of transmitting knowledge to the next generation.

I read these words and was utterly consumed: it was all so interesting! DeMause believes that in the sixties society shifted, from bringing up clones to a mode of childrearing where people realized their children were born with self-sufficient personalities, and that they should not necessarily follow the successful or unsuccessful path of their parents. It was this approach that triggered a boom in the development of human society. This is a scientific hypothesis. You can accept it or challenge it, but it gives you something to think about.

I have researched the correlation between this driver of national success and the use of specific educational models. The correlation is very high! Countries made a breakthrough in their development if they achieved humanitarian progress, including in education, the sciences, and culture. I saw it as the main trigger. There are no quick answers to the main challenges we face today. We must ensure long-term factors that will drive the future development of our society.

If I may, I will ask you a question in the style of Besogon. Do you mean that a book written by an American has made the head of the largest Russian bank invest a lot of public money into the development of an educational platform?

Everyone understands that education is a critical social function, a key factor that will drive the future development of our society and our country, as well as its competitiveness. I have realized that the main educational trend in the 21st century is what they call “personalization”. The best possible education is a full-time education or even home education, where you have a personal tutor who accompanies and teaches you all day long.

Obviously, this model cannot be implemented throughout the whole of society. It was therefore clear that we had to consider the use of modern technology, in order to personalize this educational model and to make it more accessible. This was only possible via technology. But first we had to test the model. After long discussions, our family decided to invest in private education and build a private school. A few years after the launch of this project, we had a more comprehensive understanding of what a 21st century school should be like.

Are you speaking about Khoroschool?

Yes. Khoroschool is a project financed by my family and several co-investors who all share our commitment. They believe that education is a crucial factor for national development, and they are prepared to invest in the model that we have started implementing.

Do your children go to this school?

Yes, they do. I am experimenting with them, so to speak.

Does the school have a scoring system?

None in the classical meaning of the term. However, upon graduation, all children are to meet the federal educational standard and take the exams. They must still meet all the formal criteria.

But I’d like to say a couple of words about how Khoroschool is different. Firstly, I do not believe in online education. At the current level of technological development—yes, I must make this reservation—online learning cannot replace offline education. Perhaps it will happen in the long term, but right now it does not work, even in high schools.

Coursera, the world’s most successful and mature educational project, has nearly 300 million online students across the globe, and it offers online courses from the world’s best universities. How many students complete a full course, do you think?

If you ask, the figure must be very low.

Four percent! Note that those are adults, highly motivated students who have not been coerced into studying. With children, it will be much more difficult.

Has this been proven by recent experience? I mean the home schooling made necessary for everyone by the pandemic...

Yes, sure. But you see, it was a so-called ‘lesser evil’ solution. The problem is that nearly a quarter of all the schools in this county has no broadband connection. Nearly half of the remaining schools used standard emails and the simplest forms of messenger as the main means of communication between their teachers and pupils. Only 45 percent of schools had access to some educational platforms, but even those could not support a full educational cycle. Online learning still remains very immature.

Technologies are of vital importance, but they are not enough. The key objective of Khoroschool, and our digital platform, is to teach a combination of knowledge and skills. Skills are the only means of reinforcing knowledge. Knowledge will be forgotten unless it has been translated into skills.

Thus, we offer a skills-based education and individual trajectories. All children have individual personalities and it would be highly inefficient to teach all the children at the same speed; there would be no results. The use of platform technologies at Khoroschool helps to personalize the learning process. We have four proficiency levels for each subject.

I can talk about it endlessly!

Do you really want to eliminate exams?

Our platform can do away with them. They are an awfully stressful experience that follows first the child, and then the adult, throughout their life.

The platform, however, does not eliminate assessment of the student’s knowledge: each sub-topic is followed by a test. A student cannot pass to a new module unless their knowledge has been confirmed. It requires a lot of self-discipline. We had a problem when my children completed the first term of platform education. My daughter believed that she had passed all the tests but had no outstanding credits; but she found out that 75 percent of her learning program was still unconfirmed. As a result, she spent her vacation doing tests for all the micro-modules, until the platform told her, ‘it’s OK, now you can have a rest’. It was a one-off experience, but she learned her lesson. There is no coming to terms with the platform. It sees your trajectory and controls the quality of knowledge; and skills, as I have already said. At the end of every learning cycle, children have to reinforce their knowledge via a relevant project.

The last feature that differentiates our platform is digital skills. We have included three big sections related to preparing children for the future. They cover cyber security rules, safe conduct in the virtual space, and digital hygiene. Today, we face the huge issue of children being consumed by social networks and online games. We try to monitor this issue with the help of our platform, and to minimize the impact of the internet on children.

Do you limit the access of your children to gadgets, Mr. Gref?

Up to a point, we tried to keep our youngest son, who is five years old now, away from tablets and smartphones. Today there is no way to stop him, he simply grabs the iPad. Robots are his favorite. But we see that he plays half an hour a day and not more. There is a daily war: the boy likes to watch cartoons on his iPad, while we put him before the big screen at a right distance...

In the primary school, the use of gadgets is also strictly limited. However, they become necessary in the secondary school where gadgets are used in class. For us, it is critical that our children always see learning as fun. Kids must want to learn. We try to incorporate games and new technologies into the school content so that students would learn the material efficiently and could, for example, create projects using various game techniques, such as virtual, mixed and augmented reality, animation, and so on. Engaging the child is a crucial factor.

I’m listening to you and thinking: what are we talking about? It’s not an interview with the minister of education, not with the rector of Moscow State University or even your alma mater, Saint Petersburg State University. It feels like you are more interested in talking about parallel worlds, but not about the banking industry.

Well, first of all, if you look at the world of business today, you’ll see that one of key problems is a gap between education and practice. Who is a client of the educational system? We, Sberbank, too. Many people want to work for us. That means that we should order certain skills given by the educational system. Look at some educational platforms across the globe. In Germany they were created by Siemens, Deutsche Bank, SAP, Facebook, Amazon, Google in the US, Alibaba in China, Yandex and in Russia...

One way or another, almost all our colleagues in business invest in education—and not just in professional one, but in schools, too.

Andrey Vandenko and Herman Gref  Mikhail Tereshenko/TASS
Andrey Vandenko and Herman Gref
© Mikhail Tereshenko/TASS

Returning to my activity in Sberbank: our transformations during the last 10-12 years were also based on education. Because the main thing that you can leave behind is culture. What do I mean? The new culture in any organization is a single educational environment, bringing people’s skills and knowledge to a certain professional level, when their interaction turns out to be based on non-verbal communications. When people feel each other at the low-field level. You know, they say that some hockey players are just good, but some are brilliant. The latter have eyes in the back of their heads and catch a puck where it will be in a second.

Do you play hockey?

I used to. Now I don’t have time. It’s a sport that cannot be played occasionally. Or there is a risk of injury. I prefer regular fitness. Every morning, I spend an hour or an hour and a half working out.

So, returning to your question about my interests... Instructors in business schools often tell a story about Jack Welch also known as Neutron Jack. He was one of General Electric founders. He built the first super-professional corporate university in the world. They say that the only thing that Welch never missed during more than 20 years when he was the head of GE was training for the company top managers in the corporate university. He missed only one lecture because at that time he was undergoing heart surgery.

It’s not a unique story. One way or another, everyone who is seriously engaged in business development faces the problem of education and an approach to its solution.

Part 2
About Elon Musk, change of government, ruble exchange rate, losses caused by the crisis, costs and salaries

But have you managed to instill your culture in Sberbank before the coronavirus crisis?

‘Instill’ is not a very good word. The culture is not instilled. It is born and grown—yes, around a leader. But I cannot say that I have come and instilled it. We have created this type of culture together. Of course, it’s a far cry from what the bank had ten years ago. Or even five. Now we have a completely different set of values and drivers.

You know, Dave Logan wrote an excellent book called Tribal Leadership and identified five levels of culture. At the lowest level it seems that anyone’s life is crap, at the second one—that your life is unsuccessful. The third level is I am cool, the fourth one—we are cool (it’s where we start to associate ourselves with a team). Organizations usually stop here. But there is the fifth level of culture, where no one competes with anyone.

For example, people are solving the most important problem of mankind: to make the world a better place. This culture is the most productive and inspiring. I sometimes thought why the places where the fifth-level organizations are located were so appealing. For example, the culture of Silicon Valley is largely built on this level. Say, Elon Musk is trying to solve one or another global problem. He is stumbling, falling, but moving forward right along.

I think that today we have certainly reached the fourth level of culture...

Are you talking about Sberbank?

Yes, and we are trying to move towards the fifth level. When you respect competitors and the wider public, the lack of self-confidence disappears and you want to contribute to the rapid development of our country. The word ‘pride’ is now one of the main motivators in our bank. When people are inspired to be at their best, you can set the goals that are absolutely unachievable in a normal organization. And the most amazing thing is that they often achieve them.

You’ve mentioned Musk. It’s extremely likely that there are such people in our country, too—creative ones, with similar capitals... It seems to me that Musk had about USD 150 million or even less.

Yes, when he sold PayPal...

And now he is launching astronauts to the International Space Station... Do you think that Musk could have implemented such a project in Russia?

I’m sure that we have such people. But we don’t have such an environment. Perhaps, that’s a key obstacle. That’s what we have talked before. We should change many things—from the educational environment to implementation of new technologies and changes in management models. Then people will be able to fulfill themselves at a new level.

Do you see prerequisites for such changes?


Will you share?

As for me, I’m inspired by the goals set by our government. It’s an attempt to build an effective public platform with the dramatic decrease of bureaucracy and the increase of decision-making speed. It is aimed at involvement of many business initiatives. At substitution of business by the state, but not vice versa.

Was the change of government unexpected for you?


But was it a positive factor?

It would be tactless for me to answer this question.

Are you friends with the prime minister Mr. Mishustin?

I get along well with him and I respect him very much. But I can say the same about Dmitry Medvedev.

They are very different. I wouldn’t like to compare them. I’ve experienced first-hand how hard the work in the government is and I’m not ready to cast stones at anyone.

But is there anyone who deserves that?

There are no perfect leaders. If anyone forgets about that, the situation will remind them. There are always some things to criticize for. It’s a positive feedback. You understand where to make efforts to improve yourself.

What should we rebuke the current cabinet for?

They have been working for a very short time, but the things that they are doing are very appealing for me.

And don’t you have any comments on the proposed recovery program?

Maybe I would strengthen the technology section. Development of IT industry, venture industry... These are not the things that can pay off within two years. They should be planned for a longer term. I would update this section.

But the government turned out to be in a bad spot, since during the second week of its existence it faced the coronavirus. It can be compared only to the 1998 financial crisis that broke out soon after Sergey Kiriyenko had become the prime minister. It’s a similar situation.

And what will the ruble face?


To which figures?

Our national currency is closely related to oil prices, but they are not easy to predict. I trust one of old and experienced analyst, Henry Groub. He thinks that the oil price at year end will be USD 60-62 per barrel. That means that the ruble-dollar rate will be about 60.

These are the trends so far. No one knows how the situation with the coronavirus will evolve. In the event of the second wave, the ruble may start fluctuating. Now I would say that the ruble with the floating rate is a natural damper of the macroeconomic situation. In 2014, a very wise step was taken, when they released ruble and started to target inflation but not the exchange rate. Of course, today’s economy is much more flexible to such shocks. And it is going through the coronavirus crisis much better than I expected.

And what did you expect?

We predicted that the GDP would decrease by 6-9 percent, depending on how long the lockdown would last. Our today’s forecast is much more optimistic. It’s about 4.2-4.5 percent. Once again—if there is no second wave.

The government was not considered as a ‘crisis’ one, it was not tooled for that.

You never know what can happen. I joined Sberbank in 2007. Less than a year after, the terrible financial crisis hit. I was not ready for that. And the bank was not ready either. We had a very rough lesson. And 2014-2015 also tempered us a lot. The shape in which we faced 2020 allowed us to feel absolutely confident and calm. We achieved the enormous progress.

Nevertheless, you have recently told Vladimir Putin that the last spring was the hardest time in your life.

I’ve never faced a situation with a sudden 100 percent breakdown in eleven industries that suffered from coronavirus. They turned out to be almost without the financial flow.

Russia's President Vladimir Putin during a video conference meeting with Sberbank CEO Herman Gref Alexei Nikolsky/Russian Presidential Press and Information Office/TASS
Russia's President Vladimir Putin during a video conference meeting with Sberbank CEO Herman Gref
© Alexei Nikolsky/Russian Presidential Press and Information Office/TASS

These include public catering, a part of trade, tourism, aviation. Just imagine: Aeroflot’s traffic volume decreased by 95 percent. Of course, it’s a terrible blow. Airline companies use planes owned by us and leased by them. We should receive payments every month, to make settlements with our own creditors. But all loans turned out to be non-performing immediately.


Night and day, we were looking for restructuring solutions. The cabinet members literally spent nights in our office, we stayed at the White House continuously, looking for ways out of this situation. The cabinet of ministers worked 20 hours a day, to say the least. On-the-spot decisions were needed. We could only feel sorry for them.

Of course, no one expected such a stress. The most terrible thing at that moment was inactivity. But there was no such thing. Some actions could seem bustling and improper, as we understand with the benefit of hindsight. But at that time these responses looked as absolutely correct.

I think that the Central Bank has worked very well. It took necessary steps that allowed us to free our hands a little and support our customers. We conducted the enormous restructuring within a very short time. Within a week, we reissued the same number of loans as for the whole 2019. It was more than one trillion rubles for legal entities! We had to modify the work of our software completely, restructure loans manually, re-sign agreements. It was an enormous piece of work.

You can imagine.

Did you have to cut the ties that bind?

No, we gave restructuring to everyone who appealed to us. Some were serviced on preferential terms, with the involvement of government grants and subsidies, some—at our own expense. And we lost a lot of money due to that. This year, we are going to come up hundreds of billions short.

Two years ago, you said that you wanted to earn a trillion in 2020.

According to the business plan for this year, the figure should be very close to one trillion rubles. But, of course, we will not achieve this goal in the current context. Due to the losses incurred already and creation of provisions for the last three months. We tried to respond to the danger immediately.

Was there a considerable outflow of retail deposits?

There were two upsurges during this time, but I would not say that they were very considerable; we went without panic.

At some point, there was an increased demand for foreign currency. People started to withdraw dollars. And we had a problem with their delivery. The currency is received only from the US, and we deliver it.

And regular flights that we usually used had already stopped by that time. We had to deliver the currency somehow. And in much larger volumes, since there was the demand in the market. 

It was one of unconventional problems that we were solving: how to deliver the currency when it was impossible to deliver it...

I thought that there were several billions of dollars in the nation’s pantry.

You are right. There are. But these are billions for a rainy day, and it has not come yet. Until there is an opportunity to replenish the provisions of foreign currency in cash, we should use these channels. If everything had been closed, we would have had to open a moneybox. We had it, and the Central Bank, too.

And did you take any step for yourself? With your own deposits?

Absolutely not. I plan for a longer term, as I’ve already said. In the market, too. I’m not a speculator. The only thing that I did is I bought our shares. At the moment of dramatic decline, I had to show that I believed in Sberbank. I bought that two or three times. These were all my steps. I touched nothing else.

I worked. We had an enormous number of requests every day.

How did you decide who to help, whose side to take? For example, commercial property owners or retailers?

As a result, we helped them both. How could we do otherwise? When the economy loses, the bank loses, too. The second line of defense. The first beneficiary of problems and debts is our customer and then ourselves. As for owners of shopping malls and chains, we took the side of landlords for just one reason. We must not violate the basic principle of civil laws even in the hardest crisis situation. There is a concept of bilateral contract and freedom of contract. No party can terminate a bilateral contract on its own accord. The State Duma proposed to give tenants the right to pull out of the deal unilaterally. And even without compensation for losses. It would undermine the stability of economic turnover. I think that it cannot be done out of court. We fought for this principle.

The bill could provoke the dramatic undermining of all economic relations. Financial resources would have become more expensive, we would have had to hedge risks while concluding two-way deals. We can say it would be an additional tax on the economy as a whole. We have managed to minimize it, to strike a balance, and it is very good.

Did you have to cut costs within the bank?

Due to the dramatic drop in income, there was hard choice whether we had to cut jobs.

First, we made a program for cost reduction for 40 billion rubles, but then we understood that it was not enough and increased it to about 82 billion.

What share of budget is that?

About 12 percent. A great deal! Given the fact that we decided not to cut jobs. However, we closed the annual scheduled recruitment.

If people left, it was a natural decrease. We almost stopped hiring new employees, only in case of emergency. And only with my or board’s permission. This situation still remains. But, once more, we haven’t fired anyone. Three days after the announcement of days-off, we opened with 30 percent of our usual headcount. We agreed it with the Central Bank and used so-called ‘holiday mode’, but it didn’t work.

It turned out that there were queues in our branches and lots of visitors. Within two days, we increased the number of employees to 60, and then—to 70 and to 90 percent. During the last three months, we were working almost with the full capacity, though reduced the number of products being sold and started to provide services that are extremely needed in crisis times. All additional things were cut off—no insurance, no sales of ecosystem products.

How did you save eighty-two billion?

We are still in the process. Firstly, we retrenched on the salaries of the management. The salaries of ordinary employees did not suffer any cuts, nor did we bring down the bonus coefficients, but we did cut the salaries of the top brass.

How much?

A lot.

What about yourself?

There were no exceptions, clearly. Our managers’ payment schemes are not what you would normally expect to see in a bank. Say, the fixed component of my salary is about 15% of the overall sum. The rest are bonuses, which depend on two things: the market cap of the company and its profit. If, say, our profit this year amounts to a half of last year’s, my salary will also be halved, as will all the fixed payments. Generally speaking, if the profits go down to a half of what we earned the year before, the management’s salaries will amount to a third of what they used to be.

And they were OK with this arrangement?

Those are the rules of the game. Everyone in Sberbank knows: if the company makes money, so do they. The level of profitability depends on the actions of the management, and this in turn determines the market cap, the income of the shareholders and the dividend.

But surely the COVID pandemic is a force majeure?

We do not have a clause like that in our contracts. What this is though, is yet another area where we can make cuts. And we also cut down severely on Opex and Capex. We did not cut the investments into technology, but we did pare down supply and repairs to a bare minimum.

Was this painful for the ecosystem? Which projects were axed?

We shifted the implementation of new products to autumn, or to next year.

Is the divorce with Yandex along the same lines?

It is not a divorce. We are restructuring our shared business.

What was the bone of contention?

There was no contention!

But you’re splitting up now. What went wrong?

Nothing was wrong. You have to look objectively at how the joint projects have been developing. Yandex.Money is seven years old now. It has grown in capitalisation many times over and it will definitely remain in the Sber system. The company has a lot of cash on its balance. They are fine. Also, Yandex.Market has made much headway during the crisis. Their management is, on the whole, quite good. I would not say there is any contention, we keep up good relations.

Experts have been saying for some time that you were choking each other off.

There is some truth to that, yes. The ecosystems are in severe competition against each other, and that makes things difficult. There were objective reasons that compelled us to think about how we should solve this. We have been working on it for the last year and have arrived at a mutually satisfactory solution.

Who is the decision-maker in Sberbank? Is your word Gospel? Who has the right of veto? The bank has so many wildly different projects, who makes all the decisions?

There is no voluntarism in Sber. We adhere to planned development and we work out the strategy in advance, which is a long, fiddly and even torturous job. Every business line contributes to drawing up the strategy. And then we stick to it closely.

What is your planning horizon?

We used to have five-years strategies. But such long-term planning is virtually impossible today. Now we operate within three-year ranges. We are now finishing the strategy for 2017-2020, and we are about to approve the strategy for 2020-2023.

Has everything gone according to plan?

As we say, execution is our prayer. We try to do all we have been meaning to do. We have not as yet summed up this year’s achievements (we are going to do it in December), but I think on the whole we have met or even moved beyond the overwhelming majority of our targets. The one parameter we are definitely failing is the net profit, as I have already mentioned.

What about the dividends to the public purse?

They will be paid. The management will decide on the amount in August and suggest it to the board of directors. In September, the shareholder meeting will give its final approval. We are confident about the future and we will definitely pay good dividends. We are passing through the crisis fairly safely and we are very grateful to President Putin and the country’s government for allowing us to put back the decision to autumn, so that we can take our bearings in the post-pandemic landscape. We are optimistic as yet. And I must say that we are honoured to pay a high dividend. It is our mission, a part of our corporate culture. Sberbank is Russia’s largest dividend-paying company: before the crisis it was fifty percent of our net profit, which is about RUB 430 billion. We understand that the money will turn into the salaries of the doctors who have been treating us during the pandemic, of the teachers who teach our children. This is not empty rhetoric for us, this is the way we live.

Sberbank headquarters in Moscow Vladimir Gerdo/TASS
Sberbank headquarters in Moscow
© Vladimir Gerdo/TASS

And yet, what is the mechanism of decision-making in Sberbank?

Global issues are decided on by the supervisory council, based off our strategy. The rest is done within the framework of the strategy. As for particular deals like what we buy and what we don’t, these are discussed by the management. But we have as flat a management structure as we can possibly have in a bank. The decisions that would, in a traditional company, be taken upstairs (what products are to be developed, who gets the functionality, what the priority and the speed of funding should be), are relegated to each of the teams in Sberbank. We have been living in agile mode for many years.

What does that mean in layman’s terms?

It implies that we work in small groups of eight to 12 people who deal with a particular task. In each of the teams there is a person called a product owner, whose role is to decide which product will be developed next. The whole team works on the task. The release happens every two weeks, and the cycle as a whole may take six months, a year or two years. We are proud of the fact that I personally have nothing to do with these decisions now. Compare that to the first ever Sberbank Online app which I drew myself in my own notepad.

When was that?

Around 2009. I drew up the whole interface and then passed it on to my colleagues. It seems ridiculous now. Today we have 2500 teams of ten people each working simultaneously. Every fortnight they produce a release with new products and functions.

How many of these innovations do you personally delve deep into?

At the stage of development, none. Not just myself or my deputies, but the leaders of other teams (we call them tribes) stay away from other people’s projects. If we start looking at the details, we lose speed and waste a huge amount of time on decision-making. That is not the way modern companies work. This is what flat management structure is all about. This is why it requires people to have a radically different level of education, responsibility and corporate culture. They are not subordinates, they are colleagues. They can ask about my point of view and disagree with it.

Does it happen that people put a lot of creativity and effort into a project, and then it just does not take off?

All the time. But we have many enterprises. Besides, negative experience is useful experience. Let us say it is the way we buy it.

They say that Gref has so much money that he can afford endless experiments.

Well, all this money does have to come from somewhere. We do in fact make a lot of money. At a recent supervisory board meeting, we discussed the profit dynamics, including remunerations, and in the last five years, our profits have increased fourfold. We have learned to make many different products and to earn money though them. Keeping up the technology craves an enormous amount of money, but at the same time we also manage to invest. You need to understand that a bank is a very specific kind of business. We have a regulated capital adequacy level. Half our earnings we give away as dividend, and the other half is turned into capital, the entirety of which is used for consequent credit activities. Moreover, the bank regulator constantly raises its demands to capital volume, which requires more and more profit. Banking is not a bed of roses at all.

Are there areas where you would not economise?

I would never economise on people and on investment into technologies. Both are key to the future. We invest hugely into our employees. Out of all Russian companies, we have the biggest education budget, and our corporate university is in the top five of its kind in the world according to all ratings. Neither do we skimp on corporate healthcare: we provide free medical check-ups for the employees and we give two extra days off once every two years to those who take advantage of this. We cannot make people go and check their health, but we try and encourage them to.

Was the bank quick off the ground in coronavirus testing?

At the start, I regret to say, it was not so much the testing we had trouble with as plain and simple PPE. We could not buy the requisite amount of face masks and gloves, because they were nowhere to be had for love or money. For about a week it was very difficult, but then we were able to find an alternative supply channel, and so we bought everything in China and brought it home to Russia onboard several planes. We did not just sit on them, either, we shared with hospitals and the police. Several million face masks were flown in to meet our needs. You must understand that our staff were at the offices the whole time, you could say they were on the frontlines, so, clearly, their safety had to be ensured. We suffered no big outbreaks, but more than 200 offices had to be temporarily closed down. If one member of staff fell ill, we quarantined all of their colleagues, had the office decontaminated completely, and then opened it up again with a provisional staff that worked for the entire fortnight of their colleagues’ quarantine.

Sberbank is taking part in the development of the vaccine in Moscow’s Gamaleya Research Institute of Epidemiology and Microbiology, is it not?

Well, we are not actually developing it. We do not go barging in into areas that we do not know the first thing about, it is not the Sberbank way. It is the team of specialists that is working on it, all we do is just help them, primarily with funding, including our own private money. Members of the Board, top and mid-level managers have decided to put their April salaries towards the development of the vaccine and other anti-COVID measures.

How many people is that?

We have 35,000 managers within the bank, including heads of branches, but we are not expecting the ground-level managers to chip in. Neither did we keep track of who did give money and how much, it was all voluntary. However, people have been very responsive and we have raised about three billion roubles.

Part 3
bout cybersecurity, motivation, government work, comfort and nightmares

Do you think the whole coronavirus situation will have any long-term effects? Will the post-COVID world be different from what we used to know, as some predict?

I do not think so. We will of course learn from the pandemic, first and foremost in the sphere of healthcare, disease control and prevention, but globally, I’m sceptical about the last several months’ importance for human history as a whole. Had we spent a couple of years living in these circumstances, something could conceivably change. As things stand, however, I do not expect to see a radical change. It is a cycle. See how quickly everything returns to the old groove once the lockdown is lifted. Granted, some people may have changed their own personal habits, but the world will remain very much the same. There has not been enough time for it to change.

You do not believe that shopping will move online completely?

The shops will not close, that much is certain. I just do not see it happening. There will be a surge in e-commerce in Russia, but I think it will happen in another five or seven years. It is on the rise but not as fast as some would wish.

The topic of cybersecurity, though, has definitely received a boost in these past months. Online swindlers have gone into overdrive.

Yes, many experts agree on this. But for Sberbank, things are pretty much the way they were. Customer personal data protection has always been a priority with us.

What about the story last year, when an employee tried to sell the database? Was it human factor or system malfunction?

Both. A system malfunction is always due to the human factor. Nobody has ever penetrated our systems from without, there are three defence contours. But if the criminal is working from the inside, the system is incredibly vulnerable. This was classic: a well-trained (by us!) person, well-versed in cybersecurity and the workings of banking systems, used their knowledge for bad ends. He created a vulnerability within the systems and extracted the data, converting it several times in the process. It was a very professional job. It was the human factor, as much as it pains me to say this. He was a young guy, well-educated, a graduate from a top Moscow university, he had received additional training from Sberbank… it was such a shame, we had invested so much into him, I was so sad when I read his file. See, a person is not only what they know and the skills they have, there is also the corporate culture. And, I must admit, that episode made me rethink some things. Before, I had been convinced that an insider assault like that is something you cannot possibly prevent. And then I understood it was all my fault.

How so?

The top manager has no business going around and assuming that his systems can be vulnerable. He must assume that an impenetrable system can be built with available technology. Whether it will be is another question, but such is the goal that must be set. When we set to, we found out and analysed a huge number of potential vulnerabilities. We did not close all the breaches, but we are now acting according to a different paradigm, which says that all of our systems will at some point become impregnable from within. And they will, it is only a question of time. We have done a lot since last autumn when this whole business took place.

All the obvious vulnerabilities were identified and sealed. Also, where before we had thousands of administrators with access to confidential customer data, we now have hundreds, and we are planning to make it just a handful of people and then to close the database off completely. But I won’t divulge our secret plans. So you see, it is down to me to ask the question in a particular way and get everyone to approach it differently. Say, an engineer comes and says: this is not doable. Then a taskforce sits down and, lo and behold, they have arrived at a solution. All because the task has been worded differently. And I do tend to treat this as my own personal responsibility. A lot depends on the leader. When you have at your disposal a company with an enormous IQ and a huge number of talented engineers and experts, you can do absolutely anything.

Have you ever been conned out of your money by online swindlers?

No. However, someone tried to steal from me once. I was already working for Sberbank and I was on a business trip to Africa or Latin America, I don’t remember now. I paid with my card there and it was compromised. And when I returned to Moscow, I noticed that my phone kept pinging: they were transaction notifications. Someone was siphoning off my money, USD 500 at a time. But that was a long time ago, when we did not have AI-based blocking systems in place. USD 2,000 was lost before I managed to call the bank and block the card.

Did you ever get your money back?

Eventually. It was a long story. The acquirer bank was held responsible. I had to deal with them through Visa, and it took almost six months.

But we have drifted off into details, let us return to the global stuff. I think we are at a juncture now where, as a country, we have a unique chance at a breakthrough.

I have been hearing this for years, you know. We keep on breaking but we never seem to actually get through. It all feels like a delayed parachute jump, only it is unclear whether we actually have the parachute.

I can see where you stand in terms of your scepticism. I will explain what I mean. Sberbank is a technological company, we have invested a lot in our development. And coupled with what the government is planning to do, this has the potential to produce a qualitative leap in very many spheres. Not only is our team able to create good services for our clients, but it can also help change the quality of public services and perfect state management. This inspires me, this is strong motivation. What we are doing now is cutting-edge in terms of science, technology, and business. At first we had to catch up, to repeat someone else’s achievements; that was the modernisation period. Now we are on the stage of innovation, and it is incredibly exciting, doing what nobody has done before you. We are carving out our own way, creating products, building business models. I am very interested to see where it will take us, how successful it will turn out to be. The figures show that we are moving in the right direction, the bank is growing rapidly, the financial results are good, the best on the market in fact. But it is equally important for me that the people who work for us feel fulfilled by what they do. Every year we carry out an in-depth study inside the bank, and, according to the autumn of 2019 review, 83% of our employees are proud to be working for Sber. This is incredibly inspiring.

Is the survey anonymous?

Of course. Also, 92% of employees consider the company to be a high-tech one. A few years ago, it was between 30 and 40 percent. The way people feel has changed completely. We have this team spirit within us and it drives us to search for ground-breaking, innovative solutions and management models. And this is where we come back to where we stared this conversation, the words that I said and that were quoted by Nikita Mikhalkov, the words which were meant to spark off a discussion. What I meant was that we are not investing enough money, time and effort into innovative managements models, and just say ‘nah, it’ll be fine’. No, it won’t!

Every year we visit the Silicon Valley to look at what our competitors are up to and decide where to go. About five years ago, I took one main thought away with me: the competition between products and services is over, what we are seeing now is the competition between business models and management models. If you have a good model, you are in for a good result. This is why, when Google or Amazon move into an industry where they have no previous experience, the stocks of the traditional players start to slump. That is not because these monster companies are so rich. That is because they have new management models which go hand in hand with a new type of thinking. At the moment I am trying to understand how this works, it is incredibly interesting.

If I may say so, this is not really bank level. Do you have a higher goal in mind?

What do you mean? Our bank is huge, the biggest in the country!

But this model you are building, it is very obviously not designed to be only used by one bank.

The model of course is universally applicable. Peter Drucker wrote that there may be individual variations in management, but no radical differences. Obviously, politics and business work differently in many ways, but the key principles which make the whole process more innovative are easy to transplant. How effectively they can be implemented is another question. What is important for me is for the best business practices to be used in public services and in running the country.

Do you like the tutor role?

I'm not a mentor, more of a lab rabbit who experiments on himself. We are constantly changing our management model; we want to understand what we can do better. This is the main research application, thirteen of our laboratories inside the bank are working on it.

Let's list them, at least.

Laboratories for robotics, artificial intelligence, expanded virtual and augmented reality, cybersecurity, gamification, human behavior and neurotechnology...

Each of the labs is working on specific applied topics. They explore the applicability of various scientific and technological advances in our business.

That's what I'm saying: the bank's a bit small for you. Even if it's called Sber.

No, no, not at all! I have the most interesting job in my life right now. I'll always be grateful to President Putin for letting me out of the government. Now that was hard! All my woes about the coronavirus are nothing compared to being a minister. This is why it is so hard for me to criticize the Cabinet. Firstly, I know these people and it's not always appropriate to do. Secondly, I understand the responsibility and overload on their shoulders.

There's never been a day at work when I had little to do. But the amount of work back then, God forbid. There wasn’t a single day off for six months. The schedule was very clear-cut. Monday – meeting with the president, Thursday – government meeting, where I always reported on between three and six issues.

A huge Ministry of Economic Development, a massive amount of work. We launched, and were responsible for, all the reforms one could think up. So, every Thursday, I had a judgement day.

I usually spent my Saturdays and Sundays in international negotiations. We also found time to meet at Volynskoye or another government residence to write laws and invent new regulatory initiatives. It was an exhausting time!

Finding a political compromise was the hardest. When I came to the government, we had 25% of the votes in the Duma. And I spent a lot of time there at Okhotny Ryad Street, because we wrote many laws. I went there so often as if it was my second job. And of course, I got it hard in the neck. It was painful to watch your perfect design turn into a ridiculous cuttlefish in front of your eyes.

So, I was hugely relieved when Vladimir Putin let me go. We had a long conversation...

He wanted you to stay?

Yes, I was asked to continue working in the new government. But I was terribly exhausted physically. Any pursuit needs internal inspiration, energy. I had none. In 2000, we came in with a fiery fervor, although the situation was terrible. There wasn't enough money for salaries. Nothing to pay pensions with. Alexei Kudrin and I went to see Rem Vyakhirev, pleaded...

You're not confusing the years?

No, it was the beginning of the 00s! We couldn't pay off the IMF debts, took Gazprom taxes in advance... It was very difficult. Remember the price of oil. And during that period of empty pockets, the International Monetary Fund forced us to raise taxes. I spent three days in Volynskoye residence, trying to negotiate with the IMF mission. We couldn't. In the end, I’d had enough, and I said, ‘All right guys, you can go screw yourselves, we're gonna cut taxes.’

And we cut them radically in the first year. Lowered the VAT, the income tax from 36 to 13 percent, made it flat. Cancelled a number of turnover taxes, including on garbage disposal. It’s unimaginable today.

I shudder to remember the battles with the oil men. To be honest, we lost back then. The opponents had massive lobbying resources. Mr. Khodorkovsky, a co-owner of Yukos, was chairman of the tax subcommittee of the Duma budget committee. We had no chance of winning, but in the end we made a deal.

At that moment, we scrambled for every penny, economized and thought about how to use it rationally...

You can't be in this state for long. In eight years, I drained my resources, exhausted myself. I wouldn't have been of any use if I had stayed for four more years. 

I quit and went away for a month to recover. I flew to the Maldives for the first time in my life. I'd heard a lot, but I'd never been there before. A kind of a dream. So, I got on the first available plane and spent a week by the sea. And then I went fishing.

So you're a fisherman?

I used to be a hunter, too. Less opportunities to do it these days. I love the Altai Mountains, the Far East and Baikal. My three favorite places. Terrific beauty, crazy energy. I'm really resting when I'm there. You can fry your belly in the Maldives. But to catch one's breath... We're from a different climate after all. You don't feel it when you're young. But as I got older, I began to feel that to rest, I need a forest, loneliness.

How important is everyday comfort for you?

I'm a perfectionist, and on a physical level I don't like a mess anywhere.

It would be odd if you did, with a last name like that.

I don't care, say, about the rating of the hotel, but there are a few requirements. The room must be clean, the mattress such that you can sleep well on it. If I'm going on a vacation, I want a hotel somewhere close to nature so I can open the windows.

So I do care. Certain conditions are required. I won't eat wherever or whatever. I'm a fan of traditional food. The food has to be tasty and the kitchen clean. In that sense, I do have requirements.

Do you have your own chef?

Yes – at home. A Russian Korean, nice guy. But I like cooking as well. In summer, when we go to our country house, I try to cook something myself at least once a fortnight.

Do you have a specialty?

Many. Chops, pelmeni, dumplings. Pilaf! I’ve got my own recipe. It’s difficult to make, though. And takes a lot of time. I enjoy making good food for myself and for others. But this skill, as any other, requires practice. Sometimes I fail, and it gets very frustrating. The other side of perfectionism.

Is it correct to say that you care much about the results in anything you do?


What goal have you set for yourself at Sberbank?

I had different goals at different stages. Before anything else, I needed to figure out if I could work at a bank at all. First of all, I wanted to prove it to myself. I had many doubts about whether I could succeed.

Did you feel any aversion? After all, you were not a banker.

Sure. Our team has seen a lot of changes. 

But has any of the veterans stayed?

Bella Zlatkis, she had been with Sberbank before me and is still working there. She’s been doing a brilliant job. A real catch for the bank. Then there are those who came with me twelve years ago.

Of course, in the beginning I was met with opposition to me as a person. Then opposition to my ideas. And that’s how it was until we achieved our first wins and people saw that it was working. We had to survive amid the crisis of 2008, recover ourselves after the blows, and build the basics.

The banking industry is the most complex. The most challenging in the world. We had 17 different systems, and to centralize them was a tall task.

Later we had new problems, and once again there was a lack of self-confidence. Then we stabilized the situation. This kind of swing-like dynamic went on until we realized that we could survive only by transforming ourselves into a technology company and by developing our own platform. We haven’t yet migrated to this platform entirely, but the process is under way according to plan. We expect to migrate 80 percent of our services by the end of the next year.

You know, when I first came to Sberbank, I was over-absorbed with operational work. I considered it to be important, I felt like I needed to plumb to the depths if I wanted to redesign that machine from within. We had an enormous back office with about 60 thousand people, now we have 5 thousand, even though the volume of transactions has increased about 15 times since then.

The total headcount now is roughly the same as before. But the functional allocation is totally different: now we have 35 thousand developers – a group that was previously non-existent at the bank. Instead, Sberbank employed 33 thousand accountants, whose headcount has been brought down to 500. Let me say it again – five hundred!

What do your banking colleagues say seeing all these changes?

I think, at first, they found it all amusing. And now nobody’s laughing anymore and instead they’re trying to copy what we do – they’re trying to build ecosystems, create own tech platforms, learn Agile, i.e., advanced flexible management practices.

Let them go ahead. We have no problem with that.

Have you adapted yourselves to life under sanctions?

We’ve spent some years trying to adapt. 2015 was very hard, by 2017 we somehow learnt to live this way. We had to withdraw from international markets, we are prohibited to raise funds longer than 5 days. We used to have 10 – 12 percent of our liabilities as borrowings from international markets, now it’s all gone.

Hasn’t the accession of Vladimir Zelensky changed anything?

Not yet. We’ve been discussing this matter on a recurring basis, trying to organize a dialogue, but with zero results so far.

It’s a sore point...

Then I’ll ask you another question. Where do you think is the line between confidence and self-confidence?

There is none. But life can give you a hint. Once you get a knock on your head, you’ll know you have crossed it. It can be unpleasant.

Have you had such knocks lately?

I get them regularly. As soon as I start to feel that I know everything, I immediately get a knock.

When was the most recent?

Every week.

From your supervisor? By the way, who is your supervisor?

Our customer.

Well, it’s a gallant answer. But whose opinion is the most important for you?

It’s not a gallant answer. The opinion of our customer is the most important for me.

And we all know the name of this person. Like in the joke.

If you are talking about the President, thank God, this customer gives us freedom to act. He sets tasks but doesn’t teach us how to tackle them. And that’s where the joy is. The joy of creating. If we were instructed what to do and how, we couldn’t succeed. When we want to completely transform something, and the Supervisory Board approves our strategy, I go to the President and tell him, ‘Mr. President, we are going to do this and that. It’s a huge transformation for our company.’ If Mr. Putin said ‘No’, we wouldn’t pursue it. But he never said it. And in this regard, I have a responsibility to him. Personal responsibility. I can’t fail him. It’s a strategic thing.

Have you supported the zeroing out of the presidential term limits according to the new Constitution?

Yes, but I have my own take on this whole controversy. I’m sure that Mr. Putin has a plan, but I don’t think that he is going to hold power for long. However, it’s my personal feeling that is not based on anything. As for the legal procedure of zeroing out, this measure is critical for maintaining the balance in the entire system...

You already told me that the bank has a 3-year strategic planning process in place. And you personally? How far ahead do you look?

I am on a four-year contract. So, I plan ahead for both major and minor aspects in this cycle.

As for my own life, I try to look beyond an approximately 10-year horizon.

And where do you see yourself in 2030?

Definitely not at Sberbank. And certainly not at another big company. I can't do the same job twice.

Will you stay in Russia though?

I have lived here all my life. I'm a Russian person to my core.

Being almost a hundred percent full-blooded European.

You know, my grandpa used to say, ‘Being proud of your ethnicity is the same as being proud to have been born on a Tuesday.’ And to be ashamed... The exiled Germans were deprived of their rights, which left an imprint on them.

Were you embarrassed of your descent?

As a child, I would be teased and I would fight back and defend my right to be German.

We’ve digressed. If you're definitely not at Sberbank or another company in ten years, then will you be back working in the public sector?

No, absolutely not. I'm interested in education. I gave up science, even though I used to enjoy it a lot. You know, besides working at the bank, there was another happy period in my life – teaching at university. That's why I may be going back into education. I’m interested in technologies, venture capital investments.

Are you afraid to admit that you don't know something?

On the contrary! The first rule of thumb in the corporate culture of Sberbank is the radical truth: if you don't know something, you need to say so. You can't know everything; what’s embarrassing is when you don’t ask. And don’t admit it. That's why we bring together interesting people, a strong team, each of whom is a professional in their area. I don't feel ashamed to ask questions. If people don't ask questions, it means they are not developing.

What kind of education do you lack?

Many kinds! Technologies, of course. I’ve studied psychology very hard by myself because the work of a manager, in many respects, is definitely an educational role, a manager needs to understand a person’s way of thinking and psyche.

How often do you get disappointed in people?

It happens.

What do you do about it?

It depends on how deep the disappointment.

Do you break up easily with people?

The hard way. It is my professional drawback...

We evaluate each other every year. There’s a tool called a 360-degree review. Each of us is evaluated by our subordinates, peers and supervisors. As you've already noticed, I'm short on supervisors, so I received feedback from the Supervisory Board members, who wrote what they thought about me.


They made a whole list of criticisms. I write down five key comments for myself that I have to work on next year. One of such comments is that I part ways with people slowly and painfully. Although I myself preach the principle ‘hire slowly – fire quickly’. I get attached to people, I invest a lot in them, and it's not easy for me to break up a relationship.

If you don't fire someone who is a poor fit for their job, it can cause a lot of tension and a lot of problems in the team. Energy will be wasted on conflict situations. And that is my major drawback as a leader. The fact that I allowed something like that to happen. This is what my colleagues have been telling me for two years now.

I’m working on it, trying hard... Very often I make people suffer by not making a decision. That person may fit another job perfectly - after all, it's not a sentence, it's a dismissal. I understand it in my mind but every time I have to mentally overcome myself.

Please describe your management style.

You'd better ask my colleagues.

Banks are strictly regulated institutions. I do not believe in a fully democratic style in large organizations. I’ve never seen it anywhere. Those who proclaim themselves democrats are usually authoritarian leaders.

I have a friend, Ray Dalio, he runs a much smaller organization, is the founder of the Bridgewater fund and a Wall Street legend. He’s written a lot of books and built an amazing corporate governance system. He's been the most successful manager for many, many years at the hedge fund. We’ve been friends for many years now. And he calls himself a big democrat. When I come to see him, I watch how decisions are made at his fund... Everyone discusses and then Ray makes the decision democratically.

Like Chapaev (TN: a legendary Red Army commander during the Russian Civil War).

This is a major problem at a large organization – the leader’s influence is always immense. A lot of research papers have been written on this subject. There is no great organization without a leader. But a delegating management style is critically important. I delegate easily, thank God, this is not one of my professional drawbacks.

Do you admit mistakes?

Absolutely. There is usually a flaw of mine hidden behind every mistake made by an employee. Maybe I even take on more than I should but I believe doing it otherwise is impossible. If I don't admit a mistake, no one will. People should see my example. Some of the top manager's fault can be found in every failure. It's rarely direct, more often indirect, but it’s always there.

Last question. What is your worst nightmare, Mr. Gref?

Honestly? I’m going back to work in the government...

Andrey Vandenko