How The Sheep Turned Into Wolves: The Transformation Of DBS

How did DBS transform to become the world's best bank? Scott Anthony is the Managing Director of Innosight Consulting in Asia Pacific. He’s been part of the transformation of DBS and shows how to find root issues and tackle blockers, and how a large organization can operate like a startup.

Chapters

• 1:47 How did things work before the transformation's journey there at DBS?
• 3:03 Story about humanity - getting people to act differently
• 5:03 Development Center in Hyderabad and the problem which driven a change
• 8:20 How did Mojo help to change behaviors?
• 11:26 Creating the Beans to shape the culture
• 19:01 How to get the bank to work as a startup?
• 20:34 How to measure the effect of the cultural change?
• 22:07 Were the changes focus only on Hyderabad, or on Singapore as well?
• 23:34 How to transfer the Beans to the remote settings?

Transcript

Scott:   0:01

So, as DBS was going through this journey to become a 27,000 person startup, they started by saying, What exactly does that look like? What is a 27,000 person startup do? They said a 27,000 person startup is five things. It's agile, it's a learning organization, it's collaborative, it's data-driven, it's experimental. Then they said, Okay, what is it that stops us from following these behaviors? 

Christine:   0:29

Welcome to the"Lost in Transformation" podcast series dedicated to the complex world of digital transformation. We feature guests from large corporations, startups, consultancies, and more to shed light on the success factors around innovation, transformation, and adjacent topics. We share first-hand insights and inspiration from experts for all the entrepreneurs, entrepreneurs, and anyone curious about digital transformation.

Christine:   0:59

Scott Anthony is the Managing Director of Innosight Consulting in the Asia Pacific, with a focus on helping organizations design and create the future. He's been part of the transformation of DBS, awarded the world's best bank, and shows us what a successful journey like there's actually made of. We hope you enjoy this episode. 

Christine:   1:19

So, hi Scott, welcome to our podcast "Lost in Transformation", good to have you with us today. So, within "Lost in Transformation" we want to hear from our guest what are their innovation and transformation journeys? What are their stories that they can share? And you've been part of DBS in the past, been part of their transformation. So, just to start of, how do things work before the transformation's journey there? 

Scott:   1:47

Great. Well, Christine, thank you very much for having me as part of this podcast, and I wanna tell kind of the story behind the story at DBS because DBS is a pretty widely studied story of transformation in Singapore. But there's a piece of the story that I think is not all that well known. So, let's go back to the beginning and talk about the before. Let's talk about the after and then let's talk about the story behind the story. 

Scott:   2:11

So, if you go back in time about 11 years ago, in 2009 Piyush Gupta takes over as the CEO of DBS, and he takes over a bank that's kind of lost. It has the lowest customer satisfaction scores in Singapore, not just among the local banks, but everybody who's competing on the island, and it really has no idea about where it's going. It's the third CEO in five years, and it's a tough time for the bank. Piyush looks around and he comes to a conclusion that the organization needs to fundamentally transform. No longer can it be a traditional bank, where its biases towards obligatory compliance. It has to function like, in his words, a 27,000 person start-up. Now, how do you actually go and do that? There are three key things the DBS did over the course of the next 11 years. They became digital to their core. They really drove digital technology all throughout the bank. 

Scott:   3:03

They really focused on the customer and betting themselves in the customer journey and most critically, and the story behind the story, they created a culture where everybody would think and act like they were working at a 27,000 person startup. And today it really is an organization transformed. It is known globally as a digital and innovation powerhouse. It became the first bank to simultaneously hold the three most prestigious awards related to being the best bank in the world, the best digital bank, and so on. So, a really fundamentally transformed organization. Now how do you get there? You might think that this story is all about technology. The first thing I said Piyush Gupta tried to do or drove in the team is becoming digital to the core. 

Scott:   3:46

But this really is a story about humanity because you can only change technology, you could only change how you adopt it. You can only change how you use it if human beings think and act in different ways. You might think the human part of the story is about changing the people at DBS. So, you go and hire a bunch of mischievous millennials. You go and get a startup that's got lots of DNA that looks different, but that's not what the story is. There was a point along the journey where DBS was visiting Ping An, a very digital, very disruptive company in the region. And they were meeting with Peter Ma and Peter said Ah, DBS bankers, we are the wolves, you are the sheet. And Piyush said you know what? That sheep have to become wolves. So, this is not a story of swapping people out. This is a story about getting people to think and act differently. 

Scott:   4:36

So, let me now insert ourselves into the story to then summarize what we learned about what DBS did without even realizing it. And then how we used it proactively to go and shape culture in a systematic way. So, in about 2017 we got a call from Paul Cobban, the Chief Data and Transformation Officer at DBS. And he said We've got a problem. So, DBS had been on this journey. It had driven substantial transformation. They were feeling really good about themselves. But then the problem was a development center that they had opened up in Hyderabad. Now, this development center was part of DBS's effort to really drive digitization to the core. Historically, they outsourced technology. This development center was part of an effort for them to own technology. 

Scott:   5:18

The Development center was purpose-built from scratch to embody the view of being a 27,000 person startup. The physical layout was exactly what you'd expected at a kind of entrepreneurial, high-growth company. There's a lot of great things in there. There are foosball tables there, slides, it's bright, it's open, etc. They worked really hard to find the right people to work at the development center. They ran hackathons to hire and did everything you'd imagine to get the creme de la creme of people to put in this center. So, everything seemed to be in place to have this great startup culture. Then they turned the lights on and it didn't work. It turned out that it looked like the old DBS, the obligatory compliance DBS and not the new DBS. 

Scott:   6:02

Developers were unhappy. There were not good relations between Singapore and Hyderabad. It just wasn't working. So, Paul said, How do I purposely shape a culture that fits what we're trying to do? So, first, we went and looked at the DBS journey, We tried to figure out what did it do that allowed it in Singapore to transform its culture. We discovered a secret ingredient. Let me give you an example by telling you about one of the things that DBS did. They pointed the finger at meetings. That it seems like a strange place to point the finger. But it turned out the meetings were very not collaborative because the meetings weren't collaborative, you couldn't be data-driven, you couldn't be agile. They ran surveys that found only 40% of people said that meetings were encouraging collaboration. 

Scott:   6:49

So, how does it go and fix that? It introduces a ritual called Mojo. Mo stands for the meeting owner. This is the person who calls the meeting to order that make sure that starts and ends on time, that there's a clear purpose to the meeting, that everyone's involved. And at the end, you've got clear action steps. Jo is the joyful observer appointed by Mo. Jo is watching to make sure that everybody is participating. Jo has the right if they see that people are digitally distracted to call for a game of phone Jenga, where you stack all the phones up on the table. Joe at the end of the beating gives feedback to Mo about how well they did doing their job. 

Scott:   7:30

This program is now something that applies to every significant meeting at DBS, and it works. I said before, 40% of people said meetings encourage collaboration before. Today that number is 90%. DBS estimates that it saved a half-million employee hours by having more effective, more efficient meetings. Now, as we looked at the Mojo program and looked at a range of other things that DBS did, they've got 1/2 dozen things that look like this. And we looked at other organizations, we realized there was a common pattern. What Mojo is is what we call a BEAN - a behavior enabler, artifact, and nudge. It comes right out of the habit change literature and is a way to overcome blockers that stop you from doing digitally oriented behaviors and encourages then those behaviors. The behavior enabler is the tangible way to help you drive new behaviors. 

Scott:   8:25

For Mojo, it's the formal ritual. It's the checklist, it's the guides that are provided to the two different roles, so they know what they're trying to do. Habit change is hard. This is engaging what Daniel Kahneman would call "System 2" and helping you make that change. On the other side, the nudge, those are the invisible ways you encourage the change. This is "System 1" level thinking, things that you do without even thinking about it. The Jo sitting in the meeting is one of the most powerful nudges related to Mojo. Everybody knows that Jo is going to give feedback at the end, so everybody is silently encouraged to follow the right behaviors. The A, the artifact is the connective tissue between those two. You go into conference rooms at DBS, you'll see sticky notes on the boards that say, remember meeting Mojo. Here are the things that we need to do. There are cubes that sit on tables to remind people of things and so on. 

Scott:   9:19

So, we saw this is as the secret ingredient that DBS had used without recognizing it to drive change in Singapore. So, the question we then had is, How do you bring this to Hyderabad to encourage the culture you're seeking? Well, we knew the behaviors that they wanted. Again, it's the agile learning organization and so on. We got a little bit more specific about that, so we could be really crisp about the behaviors we wanted people to follow. The big question was, why weren't people following these behaviors today? This requires detective work to really unearth. You ask people why they're not doing things. You often get a superficial answer, so I don't have the time, my incentives aren't aligned. I don't know how to do it. Yes, that's partially true. 

Scott:   10:02

But almost always there's something beneath the surface. So, we went and did a glass door analysis. What were people saying in the words that they used to describe their experience? We had developers keep diaries to describe their day-by-day experience. We went and sat in the meetings to watch the way interactions were happening. We noticed a few common things. First, there was a real lack of clear common language. People would just talk past each other. They would talk about being agile, but no one knew exactly what that meant. And because there wasn't a common language, people also hesitated to bring up problems. So, when there was something they disagreed with, they would just kind of sit and stew around because they didn't have a language to describe it. 

Scott:   10:42

The second thing we observed is even though everyone worked at DBS Singapore and Hyderabad. The people in Singapore were so used to working with tech vendors in India that they treated their colleagues in India like vendors. They called it order taker, order maker. It wasn't collaborative at all. They weren't working together to experiment to use data to solve problems. It was a very hierarchical relationship. Then, finally, we saw that decisions clearly weren't being made by data. Decisions weren't being made by experiments. Decisions were being made by HiPPO's. You don't know the acronym, that is the Highest Paid Person's Opinion. Again, the hierarchical effect seeped into the discussions, and the behaviors weren't being followed. So we knew the behaviors. 

Scott:   11:27

We had identified the blockers. Now, it's time to create the Beans. We had a couple of brainstorming sessions, one in Singapore, one in Hyderabad. We gave inspiration from Beans we had seen in other organizations. A whole range of things like Supercell, the Finish gaming company that has a ritual, when a project fails that they pop up champagne to celebrate it, or Amazon writing memos from the future where when they're working on new efforts, they're not using PowerPoint slides. They're writing a press release that's got the customer squarely in the center and dozens of things like this, things other organizations had used to encourage similar behaviors. And came up with things that fit the Hyderabad context. 

Scott:   12:09

There were three ones that we developed, that we ended up implementing. The first was one called Team Tap, a very simple idea. Monday morning, you have an app that asked two questions in your team. Number one - How are you feeling on a 1 to 7 scale? One negative, seven Positive. Two - If you could pick one word to describe your feeling, what is it? This is a way to encourage candor and give a quick view of how people are feeling. Numbers trending up - Good thing. Numbers trending down - a problem to be addressed. The second thing we introduced was stolen shamelessly from Google - "70-20-10". That's the way Google thinks about its overall portfolio of activities. And we suggested Hyderabad do the same thing. 70% of your time is squarely focused on doing the core of your job, 20% is about improving your job, working on your department, 10% is time to experiment and do different things. This helps to break the order taker/order maker mentality because it makes clear that you've got time specifically allowed to do other things. 

Scott:   13:11

In fact, one of the developers in Hyderabad, during their 10% time, hacked together an app, that could be used to improve meeting Mojo, connecting into some of the core efforts. Finally, this idea that decisions were made by Hippo's, that we didn't know what we could experiment around and what we couldn't. We didn't know how we would experiment. We borrowed from Alexander Osterwalder and Yves Pigneur, the people who came up with the business model campus and created a culture canvas, describing who was on the team. What were their roles? What were the guardrails? How were meetings going to run? What were the things that we would do to be one team and have fun and so on? This is a physical artifact that had people's pictures on it, had signatures of the bottom, and so on. 

Scott:   13:53

So, we went and launch these Beans, adjusted them as we saw what worked and what didn't work. And did a range of other things. Of course, it's hard to change the culture. It's not just this. There are other things you have to do, but this is the most different part, which is why I dwell on it. And it worked. A year after we started this, the engagement story scores in Hyderabad, which at the beginning of the story were low, far lower than DBS was used to, had increased by 20%. Getting closer to what DBS's aspirations were. Hyderabad was named by LinkedIn as a very desirable place to work. It was named by an Indian organization is one of the most innovative, most transformational centers that existed within India. 

Scott:   14:33

And as Paul Cobban reflected on the yearlong effort it took to do this, his comment was, "We have proven that we can purposely shape culture". This idea of the Bean is now a formal way that DBS thinks about continuing to drive its digital transformation. It had already done it, but it didn't have language for it. And now that it has it, now that it knows the elements of the Bean, now that it knows what has to surround it, it could do even more. It can do it even faster. It could do it even better. So, that's a little bit, but maybe more than a little bit about the story behind the story and an ingredient that you can use to go and drive culture change at your organization.

Sebastian:   15:12

That's a fascinating instrument, I'm wondering because you mentioned that now DBS has this tool, now they know how to use it. Is there anything in an existing culture that is kind of a prerequisite for something to actually work and evolve the culture? Do you think that any element could potentially be drawn into an existing culture if you used the right enablers?

Scott:   15:36

I think it's a great question. So let me give two answers. So, the writing that we have done around this, you know, the story I described is in a Harvard Business Review article from last year called "Breaking Down the Barriers to Innovation" and will be part of a forthcoming book called "Eat, Sleep Innovate". The title is you eat every day, you sleep every day, why don't you innovate every day? So, the research and writing we have done are squarely focused on innovation, and not surprisingly, but we think that this tool, the idea that behavior enabler, artifact, and nudge can really be used for anything. Is what it really is, is about habit change inside organizations. 

Scott:   16:10

So, we think it is a very widely deployable tool that you can use in many contacts. The second thing I didn't say is, what are the circumstances where this is going to work? I think that the two things that you really need. Number one is clarity. You have to be very clear about what it is you're trying to do. Often where we see people screw up, they're not clear in their intent. They're not clear in the language. And number two, there has to be a very clear connection between the behavior trying to enable and what your organization is trying to do. We did a session a couple of months ago with a big European telecommunications company, and their strategy is pretty simple. Cut costs to the bone. There was their pre-Covid-19 strategy, I'm sure it's even more of their strategy now. Cut costs to the bone. We're gonna be a low-cost competitor. Then they said, Okay, we want you to facilitate a session. We want a Bean storm and we want to think about new behaviors, about letting people dream and think about new, innovative ideas and be expansive. And, of course, the people in the audience you're like, this doesn't make sense. You're telling me to do things that are of our strategy. So, if you do that, it's not gonna work. But if you're clear in language and there's a connection between your strategic intent and what you're asking people to do, that's really all it takes.

Sebastian:   17:22

So, if I take the bean as a metaphor, essentially the strategy has come to the soil, and to take the right soil and the right beat in order to really have something that can actually flourish.

Scott:   17:33

Yeah, I hadn't thought about it that way before, but I think that's a great metaphor. And, you know, you could push it a little bit and say, You want to make sure you've got an environment that's got the right fertilizer to go in the soil, which might mean you've got some things to surround, the things you're trying to do. And DBS's case is an example of that it is their innovation team is an interestingly structured innovation team. In that the innovation team has one and only one rule, that is under no circumstance should they actually innovate. They're not there to launch new products or launch new services. They're there to enable everyone within DBS, they're the equivalent to the fertilizer for the soil. And then you need the right environment around it, which is one where there is the right kind of safety, psychological, safety, mental safety, emotional safety and so on, where it's okay for people to do things that are a little different, to try things, to even screw up sometimes, as long as they screw up in the right sort of way.

Sebastian:   18:27

I'm curious if you're able to talk also about that, because, of course, banking is a very regulated industry, right? And you mentioned they wanted to go from, of course, the bank, like very regulated bank more to 27,000 people startup, which oftentimes startups were also, see under the whole Facebook notion of moving fast and breaking things, in a regular environment, it's very bad to break things. How do you actually square that away?

Scott:   19:00

It's a great question, and it's interesting, too, because Facebook has amended that statement, it's now moving fast and break things with stable systems. So, and I think that's an important caveat is, I think the thing that people sometimes miss about making mistakes and breaking things, and so on is that his circumstance contingent. There are some kinds of failures, some kind of things that you can break totally fine. There are other things that you can't break. You can't break the law, you can't break your back-end systems. You can't break the things that our compliance-related regulations. 

Scott:   19:31

So, I think the key thing that DBS and any organization have to do is just to find the circumstances, in which you can take risks, in which you can do different things, in which it's okay to fail. And then also say, there is something that is what's known in the academic literature as an intelligent failure. This isn't I've taken a stupid risk. This isn't I went and bet big without thinking. This is very smartly like a scientist formed a hypothesis, I defined the most focused experiment that I can and I ran a test. And if it turns out, I just prove the hypothesis and I do it in a resource-effective way, that's nothing but good. Now, if I've got a crazy idea and I go in and invest billions behind it and it doesn't work, that's not good. That's a very bad thing to do. So, again, it's just getting the circumstances right.

Sebastian:   20:17

How should companies think about measuring the effect of more cultural change like that? Oftentimes, people want to somehow tie it back to the bottom line, which becomes very difficult. Do you have any recommendations in that regard?

Scott:   20:32

And this is something that I think a great question again. This is something that I think DBS has done a very good job of, you know. So, I was talking about the Mojo program and I was able to say, as they look at engagement surveys and related things, they could find a proxy. So, in this case, what percent of meetings do you think encourage collaboration? So, they have a before metric, they've gotten after metrics. They can track it. They can see the impact. 

Scott:   20:54

They have used this notion of How much time are we saving time, after all, is money. So, if you're able to estimate that you've saved half-million employees hours, that is a significant cost saving. That's the significant productivity enhancement. And same for Hyderabad, there was the overall engagement score. And then, as you went to a level deeper, you could look at specific questions, that you could use as things that would be at least second-order or leading variables, that would drive to bottom-line impact. So, I think it's important to think about it. I think it's important to recognize that often you will have to look at things that might not be directly linked. It might have to be input into, but by tracking, measuring, and monitoring you then have the data that you have or the data that you can look at to say, Okay, we should do more of this and less of this. It's a step that I think a lot of people mess.

Sebastian:   21:42

And then, in the course of transforming kind of the operations, the office in Hyderabad, where one of the things you mentioned also the dynamic in Singapore and in Hyderabad, order takers/order makers as hierarchical. Were there interventions only focused on the Hyderabad side or did you also actually have any activities in Singapore in order to break up those dynamics?

Scott:   22:07

Great question. And of course, it was on both sides. So, some of this is working through in parallel with people in Singapore, people in Hyderabad. Some of this was just helping the leaders in Singapore recognize, how they were showing up, recognizing what the behaviors that we were seeking to encourage look like, and what they were doing that didn't get those behaviors. And some of it was just the simple act of bringing people together. Now, this is in a time where we were flying people in and they were having meetings face to face in the exact moment that we're in right now. 

Scott:   22:38

This is going to be done in many cases over Zoom or some other conference calling solution. But whatever it is, it's a way where you say we're all one team. We're all working through this problem together, and I think that view that it's not order taker/order maker, but side by side joint problem solving, I think that was a big piece of the answer. It's a little bit of Hawthorne effect, you know, it's a little bit of we're paying attention now, and because of that, things we're going to get better. And that is a material and persistent effect that has proven to be true for now, about 100 years. So you know, paying attention matters.

Sebastian:   23:11

Right, and then just out of curiosity, because you also just referenced as a big current time and some of the Beans are supposed to develop in the past were very focused on actual physical surrounding, especially if you have, like nudges and sort of reminders in the space and so forth. How do you see some of that translating into pure remote settings? Do you have any hypotheses around that?

Scott:   23:34

It's a good question, and I haven't thought about it enough to be able to give a: this is the three bullet point answer. But you know, as I think about a lot of the Beans that we have seen work in the forthcoming book, we have 101 Beans in it. That's, we thought it was a nice number. So, as you start to look at those things, some of them are things, where there is the physical component of people being together. But a lot of it isn't. A lot of it could be done very easily in a digital sort of setting. Let me just give you one very quick example. 

Scott:   24:02

So, DBS has another one called Gandalf Scholarship. Gandalf is one of DBS's mantras, is trying to view its competitors, not as banks like UOB or HSBC, but Google, Amazon, Netflix, Apple, LinkedIn, and Facebook. You put a D in between those you create Gandalf, the Wizard from the Lord of the Rings series. So. Gandalf is a name that matters to them. Gandalf scholarship is something that you can get if you want to learn a new skill. You could get 1000 Singapore dollars to do anything you want. Take a course, do some kind of online thing, whatever, with the only requirement being you teach it back to the organization. 

Scott:   24:38

Now you don't have to be physical to do any of these things. Of course, we know now that there's lots of distance learning you can do. You can record yourself on your computer and post videos, etcetera, etcetera. So, that's another one that DBS has, that could be done very easily in a virtual setting. And the other thing, I would say is, I think one of the things that organizations need, they need Beans and they need them fast right now because everybody is being forced to adopt new behaviors and behavior change is hard. So, the more that you can give people things that enable that behavior, that nudge them to support it and can be a virtual artifact to remind them, screen saver, something that's emailed to them, whatever, the more it can help them with the massive habit change, that the world is undergoing right now.

Sebastian:   25:19

For the Mojo, we do a Zoom background then.

Scott:   25:22

Yeah, exactly. Exactly exactly, simple things. But there are lots of things that you could do like that. And, you know, one of the things has just been struck by so much over the last few weeks. You know what we as humans, are an ingenious creative species, and we figure out ways around problems, and we turn problems into opportunities. And of course, we all have to go through the Kubler Ross phases where there's a grief period and we're going to deny and all that. But, when you accept reality and you start to say, Hey, things could be a lot worse, but we're gonna figure out what we need to do to get through this. You just see this amazing outpouring of creativity all around the world. It's a really powerful thing. 

Christine:   25:58

Cool. So, Scott, thank you so much for the insights. It was new for us also to hear about the measures of transformation at DBS and thank you so much for sharing this with us. 

Scott:   26:08

Always a pleasure.

Christine:   26:09

Thank you for listening to this episode of "Lost in Transformation" with our host, Sebastian from MING Labs. If you enjoy our podcast, please subscribe to our channel and leave us a review on iTunes. Join us next time for another episode of our podcasts.