The Fight Against Corporate Inertia

People do not resist change, companies do.

Companies are designed for inertia. They are made up from standard processes to drive productivity and policies to ensure people do not cross lines. We hire people who are like us and place them in an organisational structures where they sit with people with the same skills. We set higher performance targets each year but the default mechanism to achieving them is to work harder rather than change the way we work. To drive improvement in this environment is to push against the very fabric of the organisation and any brute force attempt to do so is destined for failure. Only by systematically addressing each of these components will a climate for change emerge where people can embrace change and sustained transformation becomes possible. In parallel, leaders need to be the enemy of the status quo and create the expectation that improvement across the company is the norm. There are 3 essential areas for leaders to focus on.

Create the expectation to improve

Over a decade ago, when I was studying lean principles, I travelled to Japan on a study trip to tour to and learn from respected manufacturing plants. I was guided round one of the factories by a sensei (quality guru). At one of the stations he stopped, glanced at some documentation displayed and proceeded to scream at the section supervisor in Japanese. Once he had finished he explained to me very calmly that the supervisor had not updated his standard work for 6 weeks meaning that he had not found any improvements on how the job should get done. He added that the role of leaders is to solve problems and drive improvement. Otherwise why did we need leaders? He expected that each supervisor should update their standard work at least weekly. Whilst I did not support his fear-inducing leadership style, his drive of continuous improvement was a light bulb moment for me. The sensei had created an expectation for improvement. He went on to tell me that the 2 most important questions for a leader to ask were firstly “How are you performing to standard?” in other words: given the current resources and processes are you hitting the expected levels of productivity, quality etc. And secondly “What experiments have you run to move to your target state?” You will only be able to improve if you change the way you work – it is not about working harder and this is best achieved through experimentation.

These two questions may seem very operational in nature but they can and should be adapted to all parts of an organisation. People across the company should be rewarded for improving how the job is done not just performing the job.

Create the bandwidth to change and then move to BAU

Back in 2009, shortly after I joined DBS my team ran a programme aimed at taking customer waiting time out of our processes. DBS was known as Damn Bloody Slow since we were famous for long queues at our branches, ATMs and call centres. My team set up a program of process improvement events (PIEs) which were week-long workshops attended by employees who between them knew the target end-to-end process. They physically walked the process identifying issues and then back in the room ideated improvement ideas and implemented as many as possible in the week. In the first year we ran close to 50 PIEs and we dramatically reduced the customer waiting times, taking an estimated 250 million waiting hours out of our processes. We went from the bottom to the top of the customer satisfaction scores in 12 months. The PIE program could only have happened had there been a dedicated transformation team driving it from the centre. The team designed the approach, scheduled the workshops, provided the training, facilitated the sessions and reported on the progress to the CEO. We were highly successful for a couple of years but as focus moved onto the next transformation and since the people participating in the PIEs had day jobs, the focus began to wane. The improvement workshops were seen as one-off exercises. The expectation for improvement was episodic and not continuous.

We realised that we had to embed the need for improvement into BAU. We pivoted the program after a couple of years to replace the workshops with DMS (DBS Management System). Business reviews were no longer conducted in meeting rooms but on the operations floor at visual management boards. Leaders asked a version of the 2 questions from the Japanese sensei – “What are the issues that are preventing you performing to standard levels of quality, productivity and risk?” and “What experiments are you planning to get to the target improved state?”

With this approach the onus was on the leader to walk the floor, to ask the right questions and create the expectation that driving improvement was part of the day job, not a one-off project.

Create a safe environment to challenge

There are points where even the most empowered team feel that they have hit a brick wall. This typically happens when they run into an ingrained corporate habit or out of date policy? Common comments include “We cannot change, it is against the policy” or “our compliance team will never agree”. For people to be able to overcome such situations, it is important to put in place mechanisms to allow anything to be challenged safely. In the PIE program we ensured that there was a compliance person in the PIE team to address concerns early and be part of the solution. Later we set up a Kiasu committee (Kiasu is a Singapore dialect term meaning fear of missing out or to be overly conservative). Anyone could bring a policy to a Kiasu Committee to be reviewed. The committee was chaired by the Compliance head (who dressed up a like a judge and had an over-sized gavel) and made up of a “jury” comprising senior and junior employees who deliberated whether the policy was “guilty” of being Kiasu. If found guilty the process would be amended. The environment was fun and good-natured. In the first year, around 100 policies were challenged with over half being found “guilty” and amended. Quite often the owners of the policies that were deemed to be “not Kiasu” felt that they could improve and amended their policies anyway.

“Insistence on Improvement” is the first of the 6 essential habits of leading transformation. I will be covering the other 5 in coming weeks.

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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.