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.

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