T Shaped Transformations

I often hear alpha type leaders tell me with pride that they intend to fire those that do not get on board with their plans for transformation. This is not an act of courage and decisiveness but rather a failure in leadership. Very few people come to work with the intent to do poor work or sabotage change efforts. When there is resistance there is a reason. There are real and perceived barriers preventing people embracing the transformation. Barriers that have been put, or left, in place by the same leaders who are so eager to fire the change laggards. It is an essential leadership responsibility to create the right environment that dissolves resistance and nurtures enthusiasm. Sustainable transformations require everyone to feel they are equipped, enabled and empowered. At the same time the program needs to deliver results. This is not an easy leadership task – harder than simply firing the people “getting in the way”.  How to make this happen? Design a program that is T-shaped.

A T shaped transformation has 2 components…

The first is the broad top section of the T. In a T-shaped approach, change programs are designed to engage the breadth of the organisation. It is important to lower the barriers to entry, reward participation over outcome and develop a feeling of contribution to the overall results. At DBS when we started our decade long transformation we created a program of improvement workshops called Process Improvement Events or PIEs. No pre-requisites were required. Training was given as part of the workshop, people were empowered to make change and ideas were implemented immediately. We created an iconic success measure for the program – the customer hour – a measure of customer waiting time whether it be in branches, at ATMs or receiving new credit cards. It was something everyone could contribute to and was a fantastic way of communicating progress. Rather than auditing the outcomes we recognised people for having the courage to participate. Over 2 years we ran 200 workshops reducing overall waiting times by 250 million hours per year – if you go back in time 250 million hours you end up in the stone age – it was a lot of time. Our customers noticed the difference and we went from the bottom of the customer satisfaction scores to the top in the space of 12 months. 

The second part is to go deep. Leaders choose 5 – 10 areas that are most critical and apply management oversight and investment. At DBS we identified the Big 6 – the six most urgent areas for us to fix our customer service. We put dedicated teams in place, top level governance and investment.

This two pronged approach yielded results. We improved the service in each of the Big 6 focus areas. A couple of years after starting we went back and reviewed each of the PIEs to ascertain how many had actually delivered results. We were delighted to find that around 75% had had a significant impact on reducing waiting times. More importantly we had unlocked the passion of the company and we now had an army of people enthusiastic about, and capable of, driving change. We had built the foundation of the success that would follow. The T-shaped approach became the template for all the subsequent transformation programs we ran.  And we never fired anyone for not getting on board.

Leadership Lessons

If you experience resistance from some of your people the chances are that you have not created the right environment.

For a sustained transformation you will need to engage everyone and unlock their passion through a program designed to both engage and deliver results.

Define success and communicate progress by creating iconic measures that everyone can contribute to.

Being Data Driven

One swallow does not make a summer (a fact that I have found to be oh so true since relocating to Edinburgh!) nor does one pie-chart in a powerpoint make you a data driven company. When I became Chief Data Officer at DBS in 2016, I was tasked with making DBS “data driven”.  How hard could it be?  We had several successful transformations under our belts and surely this one would be just a rinse and repeat. As it turned out it took me three years simply to figure out what a data driven company actually was and then getting to be one was the biggest challenge we had ever faced.

Prior to 2016 we had been operating as a “powerpoint driven” company where decisions were taken in meetings by the most senior person in the room based on the content of a slide deck. So when I took on the role I asked many leaders within and outside DBS what they considered a data driven company to be. I was told that data was the new oil or water or even blood. People referenced TV shows and movies – Minority Report anyone? Every software vendor claimed that Artificial Intelligence was embedded in their products – data was clearly becoming the new snake oil. Of course as soon as we announced our intent to be data driven there were claims that we were already data masters – “We are a bank – we use numbers all the time”, “Look at the pie chart in my powerpoint”. We knew we had to do some heavy lifting in terms of addressing data quality, bringing all the bank’s data into a new tech data platform, investing massively in training and attracting the best talent. However we did not have a clear view of what the end state looked like.

Three years down the line it felt like we were in good shape – most of our data was of high quality, referenced with metadata and residing in a leading edge data platform. We had trained huge amounts of people and attracted some great talent. Because we adopted our tried and tested approach of encouraging people to just dive in and have a go, we had over 100 projects underway and were starting to deliver real benefits. However what we really had was just a bunch of projects. We were not running the company day to day using data. Powerpoints still ruled the roost.

Then the epiphany came. We were inspired by the evolution of data use in Formula 1 Motor Racing. Over the past few decades the sport had gone from using signboards at the side of the track to sophisticated instrumentation on the cars that transmit huge amounts of data during the race to allow the pit-wall crew to make real time adjustments to strategy. In between races experimentation and data analysis’s results in continuous incremental improvement. We asked ourselves what would it take to run our business this way.

We realised that to be data driven we needed to completely re-imagine how to run the company. Despite the progress we had made, this final step was going to be the largest and toughest. We needed a new approach so we developed the following 5 steps:

  1. Be ultra specific about what constitutes success of the business. What is the exact outcome measure that needs to optimised. In F1 it is obvious: “Did you win the race?”. In business it can be less clear. Through discussions on outcome measures we highlighted some mis-alignments in our strategies that we were able to iron out.
  2. Identify 3-5 drivers that have the biggest impact on the outcome. I am no expert but I would imagine winning a F1 race is impacted by engine performance, tyre strategy, driver capability, pit stop timings etc. In business there can be a tendency to analyse the outcome – in review meetings leaders tend to drill down on revenues by geography or product rather than focus on what they can influence i.e. the drivers. Furthermore there is scant thinking about the relationship between the drivers and the outcome. If training improves the performance of a sales team, what kind of training works best and by how much? A data driven company seeks to continually improve their understanding of the causal relationships between drivers and outcomes.
  3. Identify opportunities to apply machine learning to improve the drivers’ impact on outcome. Machine learning can beat humans in predicting outcomes given the right data. Therefore developing models that take some of the guesswork out of people’s job makes sense. Who is the best customer to call next? Does this transaction look suspicious?
  4. Relentlessly experiment to test hypotheses. In order to continually optimise, previously held beliefs need to be challenged. A data driven company is an experiment machine and focuses on accelerating the speed of learning by investing in experimentation infrastructure, processes and training. Which leads to the big one….
  5. Change the leadership culture to start asking questions rather than giving answers. The big tech companies who excelled in an experimentation-led approach consistently told us that only 1 in 20 hypotheses are proven to be correct and therefore leaders should expect to be wrong. A HIPPO culture where the HIghest Paid Person’s Opinion always wins results in learning opportunities being blocked. We therefore encouraged leaders to ask 2 questions of their teams. “What experiments are you running next?” and “What did you learn from the last set of experiments?”. Oh and this helps create a culture of psychological safety – an essential ingredient for innovation.

Leadership Lessons

  • Spend an inordinate amount of time aligning leadership understanding of what is meant by “being data driven”.
  • Focus on improving drivers and not acting directly on outcomes.
  • Expect to be wrong and therefore focus on test hypotheses through experimentation.
  • Becoming data driven is a culture shift more than an investment in technology, process and data scientists.

The System Always Wins.

“When a great person takes on a bad system the system always wins”. Frank Voehl. The internal systems and processes of legacy companies are designed to protect the status quo and when left unchanged, present insurmountable barriers to any significant and sustainable transformation. The way investment decisions are made, the way people are hired and rewarded, how resources are allocated even where people physically sit (remember that?) all promote inertia. Since the system always wins, leaders of transformation need to change the system rather than blame the people.  But why is it so hard?

Back in the sixteen century Nicolaus Copernicus challenged the universally held belief that the Earth was the centre of the universe by claiming the Earth, in fact, revolved around the Sun. His ideas were met with ridicule and accusations of blasphemy and only after his death were his ideas accepted. With the benefit of hindsight it is easy to snigger at the ignorance of the people of the time. However it is very difficult to convince anyone that their deeply ingrained beliefs are incorrect. Yet it is often these beliefs that hold us back. I am not sure if we would not have put a man on the moon had we not accepted Copernicus’s heliocentric view.

As a transformation leader it was my job to challenge traditional and ingrained corporate processes that were getting in the way. Over the past decade I have suggested that: 

  • there are better ways other than interviews to select the best talent
  • personal objectives and KPIs drive the wrong behaviour and need to be supplemented with team targets 
  • job grades create unnecessary hierarchies and should be abolished
  • we should not sit together by department but by how the work gets done 
  • we should align the organisation to optimise for customer experience rather than the convenience of the bosses
  • we do not need an annual budget and planning process

Every time I raised these suggestions I was greeted in a way that Copernicus would have recognised. This was naive on my part (I should have learnt from Copernicus who was apparently quite cautious). I learnt that challenging such beliefs head on and getting frustrated was not sensible. It did not yield results and I realised that I needed to change my approach. After all, I also held ingrained beliefs that would be a challenge for anyone else to alter. So over many iterations with the help from my team, we developed a new approach. One that was less confrontational and when adopted, yielded better outcomes. With the exception of one (I will leave you to guess) we were able to at least partially implement the suggestions referred to above. Here are the some of the components of the approach we developed using the hiring process as an example.

Be clear about the purpose and success criteria of the corporate process and list assumptions.  

It is easy to forget the intent of a deeply ingrained process and we seldom check to see if the approach is working. For example the desired outcome of the hiring process is to attract and hire the very best people for the job. There is an assumption that the interview process is the best available way to select the best people.

Determine how to measure the effectiveness of the process

In the case of hiring we looked at the performance measures of new hires (although this in turn can be questioned)

Run an alternative approach 

We designed a hackathon event where IT candidates were invited to join internal developers in creating solutions to real problems over a 48 hour time frame where we could observe the candidates in action as well as assessing their technical capability first hand.

Leadership Lessons

Protect your Copernicuses.  Every company has people with radical ideas. If you do not see them you have not created an environment of psychological safety.  Search them out and encourage their suggestions.

Be open to try new things.  As a leader never dismiss ideas including the radical ones.  Help to unpack suggestions to their outcomes and assumptions. Then experiment with an open mind.

Measure.  Be clear how you are going to measure success.  If you cannot measure you cannot know whether the incumbent process is superior to the challenger.

Three Characteristics of a Truly Purpose Driven Company

Imagine that you discovered someone you liked and trusted was being pleasant to you only to get to your money and had no real interest in your well-being. No doubt you would be outraged and would stay well away from them. Yet this underhand approach is the stated strategy of many companies who claim to be customer obsessed purely because happy customers are loyal and drive profitability. Similarly companies make promises to their employees about great work experience as they know that happy employees lead to happy customers and profits. After all this is what we learnt in business school. More recently companies have started to publicise their efforts in CSR or ESG, backed up by certifications, PR campaigns and well written pieces in annual reviews. Much has been written about purpose and its superpower of invoking trust in customers, engagement of employees and attraction of ethical investors. I have written and spoken about how a purpose driven transformation is more powerful than a fear driven one. However I have come across very few truly purpose-driven companies – companies that, in the words of Oxford Professor Colin Mayer, aim to “provide profitable solutions to the problems of people or planet” rather than define their entire existence in terms of share-holder return whilst happy customers, employees and a sustainable world are just a means to an end.

Many companies claim to be purpose-driven but I have developed 3 tests to help determine whether a company is truly purpose driven.

The three tests

1. Does the company fully understand the problem it is trying to solve?

A purposeful company understands that it exists to profitably solve the problems of people or planet as opposed to solely maximise shareholder return. Therefore a truly purposeful company spends time and effort uncovering what their customers are trying to achieve.

I have spent the majority of my career in the banking industry. It may or may not surprise you that some bankers think that their customers wake up in the morning and say “Today is a great day to do some banking.” Actually the vast majority of people hate doing banking. They want banking to disappear out of their lives while they get on with buying homes, saving for college or investing for retirement. The late great Clayton Christensen developed the “Jobs to Be Done” concept: a framework for identifying and solving the true functional, social and emotion needs of customers. When another Harvard Professor, Theodore Levitt told a power tool company that their customers wanted a hole not a drill he was partially correct. Surely the customers really wanted a picture on the wall or a new shelf – the functional need. But actually it is even more important to also understand the emotional and social need. Perhaps the customer’s mother in law wanted a picture of her grandchild or the customer wanted to show off their sophisticated taste in art.

It takes time and effort to uncover this level of customer need and purposeful leaders allocate significant resources in uncovering fresh insights about how their customers needs are evolving. This may take the form of ethnographic research, data analysis, surveys and focus groups (although I would argue that the last 2 do not yield deep enough insights). So if discussions about new products and services do not centre around how they solve customer needs and what the impact will be on the workforce, suppliers, the community and the planet I would question how purpose-driven the company actually is.

2. Are customer, employee and community outcomes defined as a means to profitability or outcomes in their own right?

A company has a moral obligation to enhance the lives of its customers and employees. It should also consider its role in the communities in which it operates, have empathy for suppliers and aim to have positive impacts on the planet. For purpose-driven organisations, these are outcomes in their own right not mechanisms for profitability. A truly purposeful company will have performance measures and governance in place that show improvement across each of these categories and not just financials. Of course strong financials are needed for long term viability but in a purpose-drive company they are not the sole or defining outcome. A quick look at how investment decisions are made is the tell-tale sign as to the true focus of a company. Most business cases I have seen focus on the financial return and little regard is given to anything else. Also you can observe how the inevitable trade-offs between customer outcomes and short term profits are handled? How are senior management rewarded? Do review meetings include questions about customers, employees, communities etc. And how are the suppliers treated? If these are given cursory attention then clearly the company is not truly purpose driven.

3. Does the company define success as continuous improvementment in attaining its purpose?

In his book “The Infinite Game” Simon Sinek defines infinite companies as those striving to continuously improve how they meet their purpose as opposed to finite companies who measure success in terms of beating their competitors. A truly purposeful company has an infinite approach. It is less concerned with how the competition is doing but focusses on being a better version of itself every day. Such a company continuously experiments to look for better ways of enhance lives of customers and employees. There will be ongoing feedback loops across customers, employees, suppliers and communities aimed at learning how to improve. These improvements are celebrated over pleasing bosses. Watch out if people talk about where the boss is going to sit as they enter a meeting room or if a good meeting is defined as one where the most senior person in the room was happy.

There are few companies that can truthfully claim they fulfill these three tests. However, I am optimistic as many are moving in the right direction. Changes in corporate law and governance coupled with individual company changes in performance management and investment decision-making processes need to be put in place to accelerate the progress towards being purpose driven society.

Leadership Lessons

Companies have a moral duty to positively impact customers, employees, suppliers, communities and the planet

True purpose is rare but when in place unlocks trust, passion and long term profitability

Companies need to put in place governance and success measures beyond financials to ensure they are truly purpose driven

The essential ingredient for a successful transformation

Do your leaders expect their already over-stretched workforces to implement change whilst striving to meet their near term business goals?  If so, it is unrealistic. It sets up transformation for failure. Leaders must make sure they set up and support a dedicated team of transformation specialists whose day job is to convert the company’s vision into an executable program of work and support businesses in implementing the change.  

At DBS CEO, Piyush Gupta described the transformation team as his secret weapon.  He realised he needed a small team of people who had built up a capability in transformation to define executable programs of transformation, align the leaders, train the people and support the businesses in implementing new concepts.  This was my team’s role and we became pretty good at it simply because we built up over a decade of experience.  Many companies see such centralised resources as an overhead. However such a team is essential and if supported by leadership will pay for itself many times over.  Having a transformation team avoids the need to pick up the phone to a favourite and expensive management consultancy every time transformation work is required.  It builds corporate capability to allow new ideas to be adapted to suit the context. It helps provides a sounding board to the executive team as they evolve vision and strategy, it acts as an independent assessment of progress and most importantly provides the necessary resource to work along side business teams as the change is implemented.

I set up DBS’s transformation team up shortly after I joined DBS in 2009.  Initially the “team” was myself and one other person I had hired from my previous company. The two of us ran process improvement events or PIEs, but when Piyush Gupta joined and saw what we were doing, he got right behind the team and we grew the team to around 40 people (DBS was around 25,000 employees at the time).  We chose people from a variety of backgrounds avoiding traditional bankers.  We looked for people who had the courage to stand in the front of a room and get people excited by change.  People who could create psychologically safe environments and unlock passion.  As we became more successful we started to attract amazing talent from around the world as well as some of the best talent from within the company.  Over the 12 years I ran the team, we designed and executed roughly 10 bank-wide transformation programs that collectively delivered DBS’s renowned transformation.  If there had been no team there would not have been the success.

Internally there were inevitable pressures from businesses.  Although we did not charge out the team’s time there were the inevitable comments from businesses about the value of a central team. However when we adopted an approach of supporting the willing volunteers the most, those businesses that were most enthusiastic about the change got the most “free” help and the laggards got the least. This created a very healthy tension.  Piyush never swayed from his support. Once we agreed the approach he actively challenged business and support functions to embrace the change.

Leadership Lessons

  1. To be successful in your transformation you need to provide bandwidth within the company
  2. A central team creates capability, context and capacity
  3. Ongoing executive support for the transformation team is essential

It’s not you it’s me

Transformation differs from traditional strategy implementation in that transformation typically includes an element of cultural change, introduction of new concepts and ways of working.  The role of a transformation leader is to be able to put an executable program of work in place that will enable a company to embrace the new ideas, methods and mindsets. 

It is inevitable in my experience that at some point the transformation leader (usually me on a stage or one of my team in a dept meeting setting) is going to be standing in front of a bunch of seasoned business executives and suggesting that they need to do things differently. Even with great communication, executive sponsorship and sound reasoning, what happens next is entirely predictable. 

There will be objections.  

If there are no objections either people have not understood or you are not being ambitious enough.  Such objections are usually statements defending inertia (or SDIs).  Some examples are :-

  • We have already tried that and it did not work
  • That will never get past compliance (or the regulator)
  • My department is different and the change does not apply to us
  • You are being too idealistic
  • You don’t understand my business

Early on in my career when I heard these SDIs from say, Bob a business leader, my reaction was that “Bob just does not get it” and that Bob is a laggard and not worth the effort. However after over the years it dawned on me that if everyone “got it” straight away then transformation would be easy and I would be out of a job.  The issue was not with Bob but with me – I had not done a good enough job for Bob.

I started to look for strategies on how to deal with SDIs.  Since SDIs were predictable I realised that I should at the very least consider how I should answer each ahead of time.  However, I was ultimately inspired by Chris Voss the ex FBI hostage negotiator who recounts in his book “Never Split the Difference” how there tends to be a list of predictable objections from kidnappers during a negotiation.  Chris describes how he raised them before they can be surfaced by the kidnapper thereby diffusing their impact.  He calls this the “accusation audit”.  By borrowing this idea we developed an SDI audit approach that helped enormously when executed well.  During the communication of a new concept we would say something along the lines of “You may think that this does not apply to you but let me explain why it does” or “Let me explain why this is different from anything else we have tried before”. 

At DBS we never fired a single person for not “getting it”.  We realised that resistance came from the failings of those of us driving the transformation and that we need to continuously improve our approaches. You certainly need a backbone when you are drink transformation. There will be plenty of naysayers along the way. It helps to know that if they did not exist something is wrong.

The One Big Insight

Learning from experiences comes from reflection and many of the insights I gained from leading the transformation team at DBS was as a result of talking to the many business leaders that came to visit. One of the most common questions we got was unsurprisingly about technology. Over the course of 3 years, we fundamentally redesigned over 600 legacy applications thereby dramatically cutting support costs and development times. Specifically we were asked about our IT architecture, our tools and automation techniques. We were always happy to talk through our IT designs and processes but frankly these were the wrong questions. The better question would have been “How did you motivate and equip your team to carry out the transformation?”  Or “How did you give your teams the belief that they could develop world leading technology?”  

Technology does not change itself. Nor do processes or strategies.  This line of thought led me to the realisation that…

“Companies do not change unless the behaviour of their people changes”.

This one and seemingly obvious insight (which took me an embarrassingly long time to unearth) summed up what you need to know to put in place a successful transformation program.

The insight seems so simple yet it is often overlooked.  Yet failing to put in place the right conditions to drive behaviour change is the reason that so many transformations fail.

It is often said that people do not like change. Not true. Following 2 years of travel restrictions most people I speak to our eager to get on a plane and experience new things again. Yet it is true in the work place. Why? Most people tell me that it is due to fear.  Change brings personal risk.  Companies are designed for inertia and no single corporate superhero can over the structural forces in place. It is therefore the role of leadership to create the environment that encourages a drive for improvement. However so very few companies set out on their transformation journeys without considering how they are going to bring their people along.

Many leaders tell me how they need to make the tough decisions on how they need to let the people go who do not get on board. For me this is a failure in leadership as most people want to part of the success yet there is something else in the way. This can be lack of understanding of the company’s direction (more common than you might think), fear of looking stupid in the future world or a feeling that staying with the current state is going to be better for them financially or in terms of status.  All these problems can be overcome by transformation planning. Moreover with the right preparation leaders can unlock the passion of their people, create an army of change agents and accelerate towards their vision.