Industries like banking are notorious for their stringent regulations, which can make introducing change a slow and painful process. Yet, despite the tight controls that regulators place on organisations, they must find a way to remain agile and develop leaders who can keep pace with the ever-changing digital marketplace.
Matt Chapman, CEO of The Chapman Consulting Group discusses how to create digitally minded leaders with Laurence Smith, Managing Director and Head of Human Resources Global Learning and Talent Development for DBS Bank Ltd.
Most of us understand that we are living during a time of explosive innovation. Social media has transformed our daily routines the way Amazon has changed the way we buy and read books. It’s an exciting time to be a consumer. But transferring that excitement to a business mindset–one that embraces change and actively seeks digital solutions–isn’t as easy as you would think.
Start-ups are the best at leveraging this era of digital revolution. They are lean, agile, and are constantly thinking of ways to provide solutions to customers that tear down industry norms. Remember the long queues to withdraw money from the bank teller? Depending on your age, you may not, but 10 years ago you would’ve gotten excited over ATM deposit capabilities, yet now you transfer money between international accounts during your morning commute to work.
As a consumer, you think of these changes in terms of your personal banking experiences, but as a leader, the success and continued existence of your organisation depends on your ability to predict, architect, and deliver these kinds of solutions across all products lines and in all industries. And you need to be able to do all of this now.
The need for the digital mindset
“Industries that undergo such vast innovation in such a short span of time rarely see the incumbent organisations survive, but we are adamant that we will be the one that does,” says Laurence Smith, Managing Director and Head of Human Resources Global Learning and Talent Development for DBS (The Development Bank of Singapore). “To achieve this, we realised that we needed to develop managers who can think digitally and deliver solutions with the agility of a start-up.”
But how do you create a population of leaders with a digital mindset? How do you get those who are comfortable with the industry norms to understand that traditional competitors are no longer their only competitors? And equally importantly, how do you motivate them to action?
“The impetus behind the way we started to think about leadership and talent development at DBS came from two strategic goals of the organisation,” explains Smith. “The first was we wanted to expand in high-growth markets like China, Indonesia, and India where there is this emergence of a middle class and the banking industry offers more attractive returns.”
But there are significant barriers to entry and growth challenges imposed by regulators in these markets, like restrictions on foreign ownership and limitations on the number of branches with foreign owners–not to mention the sheer scale of local banks, some of whom have tens of thousands of branches.
“And secondly there is this radical disruption of innovation in the banking industry, globally, that has necessitated a sharp change in the way we do business and the way we interact with our customers.”
Creating the digital mindset
“People understand digital intellectually, but rarely does it lead to the change in behaviour that’s needed,” says Smith. “So we took our existing leaders and some high potentials from all parts of the bank and paired them with start-ups from around Asia–some within our industry and some not–and conducted a hack-a-thon* to help them come to grips with just how fast the digital world is changing and how our survival depended on their abilities to lead us through this.”
Smith gave the participants 72 hours to create a working app to solve a specific business challenge. “You could see from the looks on their faces that they were nervous. I mean, we had non-technical people who had no programming experience partnered with consultants and start-ups, but in the end they did it.”
While creating a hack-a-thon isn’t the solution for all organisations, it was this radical type of emersion project that drew on the expertise and creativity from all aspects of the bank, including ideas from players outside of the industry, that helped the leadership team at DBS begin the necessary evolution to a digitally minded organisation positioned to maintain its status as an industry leader.
Smith says, “The true ROI on this project wasn’t the six prototypes that were created–one of which is an app launched as part of the digital banking strategy in India–but it was the shift from the traditional banking mindset to a digital one. It’s when we started to think like the start-ups: how enabling technologies can make us smarter, faster, and how we can use big data to innovate and create useful products and services for our customers. That was the real ROI.”
Noticeable Mindset and Culture Shifts
Before hack-a-thon After hack-a-thon Let's discuss this more Let's do it Can this be done? We will create a way 72 hours - not enough time Let's get started now How will we roll this out? Let's focus on one area first
Today’s leaders must be able to
- Lead through empowerment;
- Relinquish control to subject matter experts while retaining architectural design authority; and
- Marry technology and data with experience to produce innovative results that lead to increased customer satisfaction.
HR in the digital era
The value of HR to the organisation will be in its ability to fully understand key business drivers and identify opportunities where it can enable leaders to maintain the same momentum as the external marketplace.
HR and business leaders must become adept at leveraging the multifaceted technological tranformations happening in society as well as across industries to maintain competitive advantages and seek out new ones.
Google #DBSHackaton for the Tweet stream and related news, articles, and pictures. Visit #InnovateWithDBS to learn more.
Message Laurence Smith on LinkedIn for more details.
