DBS Bank's impressive lean turnaround in Singapore

At DBS Bank, we were recently trying to find ways to make it easier for children in Singapore to pay for their school meals. One idea we were testing was to give them technology to use instead of cash. When talking to several parents, however, we discovered that they were worried their children might grow up without understanding the value of money. As soon as we realized we were on the wrong track, we adjusted our approach.

It is hard to quantify the amount of waste we avoid simply by talking to our customers. And the truth is that, no matter how much waste can be removed from processes, there will never be a greater form of waste than offering customers a service or product they do not want or need.

Eliminating waste even before producing it, so to speak, is only possible in a company that is deeply committed to understanding customers' needs through observation, data analysis and experimentation. This customer-focused approach has been at the center of DBS Bank's strategy in recent years.

It all started in 2009, when I was hired to begin some process improvement work in one area of the business. At that time, we were all still living through the global financial crisis, and DBS management decided to focus on the Asian part of the business as a way to distance ourselves from what was happening in the West. At that time, Asia was the only part of the world where the banking sector had not imploded. One of the tenets of this strategy was "Asian service", even though at that time we were well below average when it came to customer satisfaction.

In truth, "Asian service" was very far from our reality, but our focus was in the right place. We sought to drive improvement in our customer service, which necessarily meant defining what Asian service looked like. We were given six months, which we spent working with customers, employees and experts. This resulted in 96 ideas about what Asian service really means. In August 2010, the top 50 people at DBS Bank met for two days and distilled these 96 ideas into three concepts: respectful, easy to deal with and dependable - also known as RED (Respectful, Easy to deal, and Dependable). Red is a color that represents success in Asian cultures, and it is also one of our corporate colors. But it is also an adjective, which quickly became part of the company's vocabulary. To my surprise (the many "programs" I had seen over the years had perhaps made me a little cynical), our people loved the concept and embraced it completely.

We wanted more than a slogan on a T-shirt, so we adopted an approach that encompassed both the hardware (the actual process improvement work) and the "heartware", a training program that would help people understand what we wanted our customer service to be like.

Over time, we broke many rules in the book. Take the RED improvement projects, for example: to build understanding and get people excited, we did as many as possible, knowing that we did not have the capacity to support every initiative. But we got people to take part, and, by making mistakes and experimenting, they began what - in hindsight - is the most important element of our lean transformation (although we never use the word "lean"): cultural change.

TRUE INNOVATION? MAKING THE BANK "DISAPPEAR"

This does not mean that we did not make a lot of progress in process improvement. One of the first things we did was to use customer hours as our indicator, essentially a measure of waiting time, to analyze our processes and see how many customer hours we could remove from the system. We ended up removing 250 million hours in two years!

With more than 250 improvement projects under way, we continued our work to make DBS a customer-focused bank. There was a crucial moment when we decided to reduce the time it took to replace a lost credit card from five days to one. We knew that being without a credit card is very hard for people, so we wanted to help them get back to normal as quickly as possible. This time, however, we called the customer instead of simply implementing the solution we thought would work. We phoned a woman who had lost her card and asked: "Would you like to get your credit card back in one day?". She said: "That would be great, but what about my debit card?! I lost my purse in a shopping mall with everything in it!". Suddenly, it was as if a light bulb had come on, and we realized we had misjudged the customer's real need. What an ‘aha’ moment! After that call, we rethought the entire process, changing what came to be known as the "customer journey", and we learned how critical it was to dig deeply into the problems our customers face.

I cannot stress enough how important this insight into understanding what customers really needed was, as it helped us determine our future direction. Nobody wakes up in the morning and thinks: "Today is a great day to do some banking!". I truly believe that the future of this industry is an "invisible bank". If I do not need a credit card to take an Uber, why do I need one to pay for a meal at a restaurant, for example?

This concept of an "invisible bank" is shaping our entire approach to digitalization, which is clearly paying off, considering that in 2016 we were named by Euromoney (the Oscars of banking) the best digital bank in the world. We have a massive digital agenda, but we are digitalizing with the customer's needs always clear in our minds. For example, we recently launched a mobile-only digital bank in India to ensure that people can benefit from its services even in remote areas across the country, where infrastructure is notoriously poor and travel can be quite time-consuming. People no longer need to go to a branch to open an account. Creating this innovative bank was possible because we looked at the customer journey in a transformational way. At the end of the day, to me, this is true innovation - articulating and understanding customers' problems and solving them in a way that has never been done before. Our hackathons and the lean startup tools we use are important for giving people the confidence to innovate, but on their own they stop there.

INSPIRING PEOPLE, CHANGING A CULTURE

We are fortunate to have a very inspiring CEO, who has been with us for eight years and has always been very consistent with the strategy. He has also supported our improvement initiatives very visibly. One way in which leadership showed how strongly they believed in lean thinking was by encouraging people to start as many "RED projects" as they wanted, even though - as I mentioned - they knew many would fail. By allowing them to try, they allowed people to share their ideas, try new things and learn from the experiments they ran. At the beginning of our transformation, we hired a former journalist whose job was to write two stories a week about the change we were trying to bring about. We still take communication extremely seriously and have reached a point where we do not have enough people to write all the stories we have. We have also found that sharing the improvements happening at DBS with the outside world helps us gain traction internally and attracts talent.

As every lean practitioner knows, changing an organization's culture is perhaps the hardest part of a transformation. Our problem, for example, was that, both in Asia and in the banking sector, the HiPPO mindset (highest-paid person's opinion) is very common. Moving away from this kind of thinking has been a top priority for us: it involves removing fear from the workplace and gradually learning to think differently. Today, we are trying to instill in our people the idea that we need experiments to prove our theories.

We draw a lot of inspiration from big tech companies such as Google, Netflix, Linkedin, Facebook and so on. Just as Netflix is often described as an experimentation machine that streams movies, we would like to become an experimentation machine that provides banking services. We want to be a bank that learns continuously, one experiment at a time.

Another important facet of the cultural change we are experiencing is, in fact, real estate. I had no idea how powerful physical space could be as a vehicle for driving cultural change, but it is when people move that new habits can be formed. You cannot simply throw an idea into a corner and expect your people to become creative, and being able to design our workspace around the problem we are trying to solve has proven to be a successful approach for us. Although we are all on the same floor, the layout of our workspace was preventing teams from collaborating. So we decided to change everything: each person now sits in a different place every day, and even I gave up my office and now sit with everyone else. It is the best thing I have ever done! My meetings and e-mails have decreased by 80%, I know what is happening all the time, and people approach me with problems they would not have raised before. It has truly changed my professional life and that of the entire department.

This is the kind of behavioral change we want to achieve at DBS, and it all began with the right approach to leadership and customer needs.