Published 9 August 2024 in Future readiness • 8 min read
What is common sense is not commonly practiced, and best practices are often pursued only by the best companies. The reason is simple: successful companies labor through the slow work, and that requires a lot of people enduring the emotional pain necessary to get through the hump.
In the sweltering heat of Singapore in 2014, Piyush Gupta, the CEO of DBS Bank, felt the walls closing in, not from the tropical humidity but from a chilling realization. His bank had emerged relatively unscathed from the global financial crisis and was in a strong position. But the rapid rise of fintech companies, especially in China, sent shivers down his spine. He watched with growing unease as tech giants like Alibaba made bold forays into financial services in China and increasingly abroad.
At the same time, the bank’s plans to grow by buying other companies were blocked by an increasingly challenging regulatory environment, as evidenced by its failure to acquire Bank Danamon in Indonesia. But the biggest roadblock was the bank’s aging legacy systems. Due to decades of piecemeal upgrades and siloed operations across multiple markets, these systems were not fit for purpose in the digital age. They were slow, cumbersome, and couldn’t handle the fast-paced, ever-changing world of online banking, where customers expect everything to be quick and easy.
As Gupta reflected, “Alibaba scared the living daylights out of us. They were raising money, making payments, and making loans with zero branches and completely electronically. They were reaching millions of people. We knew that the change in our industry was upon us, that the discontinuity had arrived.”
He knew it was time to disrupt the disruptors. Everyone he talked to agreed: DBS must radically transform its core technology infrastructure. The question is not what to do but how to do it right.
A decade later, DBS is the world’s top bank. Our Future-Readiness Indicator (see table above) shows that DBS can deliver across all measures for near-term financial performance while transforming itself and preparing for the future. This is largely because it’s an organization that endures slow work to become fast later.
Gupta was acutely aware of the pressure to move fast at DBS. Every bank, payment company, and insurer understands it must deploy technology broadly to retain customers and automate routine processes. That’s a no-brainer.
But rather than rushing into colossal IT expenditures that many of his counterparts might have favored, Gupta adopted a measured, thoughtful approach. He knew that merely throwing money at new technologies was not the answer. Emphasizing the importance of a solid foundation, he consistently advocated for a thorough understanding and refinement of core processes before implementing any major changes.
His strategy? First, simplify and meticulously document existing processes, making them streamlined and efficient. He then drove the company to embrace Process Improvement Events (PIEs), a methodology designed to fast-track innovation and streamline operations across the bank.
These PIEs were intensive, collaborative sessions involving cross-functional teams within the bank. They focused on identifying critical inefficiencies and reimagining processes to enhance agility. “We agreed that if implementing an idea would improve the customer experience, we should do it. This started to make a difference to the bureaucracy,” Gupta explained.
These events typically spanned five days, during which teams mapped out processes, identified pain points, and redesigned workflows to dramatically improve efficiency and effectiveness.
There were people at the coal face willing to take some chances, so we started building more individual accountability and individual responsibility for doing things.Piyush Gupta
On the first day of a PIE, teams gathered to dissect and understand the bank’s existing processes, laying everything out on the table. The subsequent days were dedicated to brainstorming and proposing improvements, with a strong emphasis on practical, actionable solutions that could be quickly implemented. By the third day, these solutions were presented to decision-makers with the authority to approve changes on the spot, ensuring that momentum wasn’t lost in red tape.
Hundreds of processes were optimized through PIEs, leading to significant improvements, such as reducing customer waiting times, enhancing digital interfaces, and streamlining back-office functions. By harnessing the collective expertise of employees to redesign processes from the ground up, PIEs helped drive the cultural change needed for DBS’s digital transformation.
However, the biggest impact came from encouraging independent thinking, where executives don’t just look at what other peer groups have done but figure out their own next best step based on their current situation. “There were people at the coal face willing to take some chances, so we started building more individual accountability and individual responsibility for doing things,” Gupta noted. “This had a greater impact than the many workshops and town hall meetings we conducted.”
It was the same for all digital interfaces. He knew DBS couldn’t just slap APIs or application programming interfaces on top of outdated systems and call it innovation. DBS had to first go through the foundational process of simplification. The underlying infrastructure needed to be cleaned up first. Only then could DBS start leveraging APIs to create a more flexible, interoperable infrastructure. This approach would then meaningfully enhance the bank’s agility – allowing it to introduce new features rapidly and adjust more fluidly to market demands. It would enable DBS to connect seamlessly with various applications and services, both internal and external.
Straightforward as it sounds, however, the preparation work was slow and laborious. One manager compared the API reconfiguration to “taking apart the engine and putting it back together again, except cleaner, leaner, and more modular.” In this scenario, what is needed is a mindset that values thoroughness over speed – a challenging feat in an industry captivated by rapid innovation. In a report in Harvard Business Publishing (Education), former DBS Chief Information Officer David Gledhill recalled: “We set aside a significant chunk of money to invest every year in building the resilient core. No one could touch this money, and it would never go away. We were just going to get it done.”
Other executives said they wouldn’t sugarcoat this slow, meticulous process and the related building of the required infrastructure. It doesn’t get much fanfare – there is no product launch party – but it’s essential. “It’s like rewiring a house. It’s a lot of slow, fiddly work crawling around in the walls,” one said. “But if you don’t get the wiring right, nothing else will work properly, no matter how fancy your light fixtures are.”
DBS stayed the course. That unwavering commitment to laying a solid foundation enabled its later digital successes and ultimate transformation into the world’s best bank.
The saying goes, “The best time to plant a tree was 20 years ago. The second-best time is now.” But in the fast-paced world of digital banking, where everyone’s chasing the next big thing, patience isn’t just a virtue – it’s a competitive advantage.
I once heard other bankers joke that DBS stood for “Damn Bloody Slow”. But this process proved that slow and steady doesn’t just win the race – it redefines the finish line.Â
Assessing a company’s future isn’t just about looking at today’s bottom line. It’s about understanding how prepared it is for the challenges and opportunities of tomorrow. With the IMD Future Readiness Indicator, we measure companies on their “future readiness” – an assessment of their current performance and their potential for transformation and growth.
So, how do we size up a company? Think of it as a full-body MRI for your business, but instead of diagnosing diseases, we’re predicting future potential. We start with the basics: are its finances healthy, and can it invest in the future? But we also dig deeper. Is it innovative, launching exciting new products and services? Does it have a diverse leadership team with the vision and flexibility to adapt to change? Is it running an efficient and productive operation? And finally, what does the market think? Are investors confident in its prospects? How does it compare to its competitors?
We gather this information from a wide range of reliable sources – from corporate financial reports and market analysis to public databases and even LinkedIn, ensuring we have the most up-to-date and accurate picture possible. This 360-degree approach gives us a comprehensive understanding of a company’s strengths, weaknesses, and potential. After all, it’s not just about who’s winning today but who’s poised to win in the long run. And in the fast-paced world of finance, that’s the only race that truly matters. For further details of the financial services industry ranking in 2024, click here.
Jialu Shan, Lawrence Tempel, and Alexandre Sonderegger contributed to this article.Â
An exploration of mental health in family business and its triggers, symptoms, and implications on the family enterprise ecosystem with tangible next steps to help leaders achieve long-term success. ...
An increasingly complex business environment demands CHROs to be outward-looking, future-focused, and highly collaborative....
2 October 2024 • by Howard H. Yu in Future readiness
Companies desperately in need of a turnaround in fortunes should take inspiration from the successful 2008 rescue mission by the then-new Ford boss Alan Mulally....
Audio available
After the first and second waves of globalization, we are firmly in wave three. See it clearly in this three-question quiz. ...
Explore first person business intelligence from top minds curated for a global executive audience