Lean in Danske Bank

Copenhagen, 21 August 2014

Presentation for Statoil

1

Agenda

Introduction to Think Simple

Tools and examples

Summing up

2

Think Simple: Step by step journey built on results

today Mission 30% Think Simple

May 2011 Target Operating model

Health Check

August 2011 "Car loan" end-to-end

Lean piloted

January 2012 End-to-end Lean programme launched in

PB, later in BB

Jan 2013 Programme extended to entire group

and multiple change levers

April 2013 ExBo+ decides to move forward full

speed with Think Simple

May 2013 Think Simple Wave 1 launched – work begins in C&I and IT with the first pilots

Sep 2013 Streams report Wave 1 financial impact in

line with expectations

Major execution milestones

Aug-Sep 2013 Streams decide on Wave 2 plan (demand higher than resources)

May 2012 Extensive Lean training

started

2011-2012 Lean methodology developed and

documented

Change and enablement

May 2013 Central progress tracking

starts

2010 Lean in

Operations

Key decisions

Oct 2013 ExBo+ decides on Demand driven

Think Simple and revised scope

Feb-March 2014 Streams decide on Wave3 plan

and kick off new transformations

August 2014 Wave 4kicked off

3

Transforming Danske Bank into a Lean organization

Operational excellence

Improved performance Reduced lead time Efficient use of resources

Service excellence

Increased advisor meetings Daily planning of activities Follow-up

E2E Process excellence

Predictability and quality Shorter time to Yes Reduced processing time

Management programme

Mindset change from the top Training and tools relevant for daily work

4

18 weeks

Group Lean End-2-End transformation Full scale implementation Pre-phase

ExBo (4 p.a)

Fast Track Mgmt Team (~3 weeks)

Project team

Stream SteerCo (ad hoc)

Process Selection

Relevant branches & departments

1

Intro Scope Initial baseline Resource

allocation

3

Reference process Status on gaps

4

Approve target process Bottom-up verification of baseline & potentials

5

Status on pilot First indication of

KPIs

6

Approve roll out Evaluate final pilot results Effect Realization plans Recommendation for roll-out execution Final agreement on KPIs

Analyse & design

Prepare pilot Pilot Refine

Pilot & Refine

As-is process

Reference process

Prepa-ration

Approve implementation

Overall approach: From selection to implementation Transformation of 18 weeks supported by End-2-End consultants

Roll-out/ Continuous improvement

All employee WS Branch kickoffs Celebrate success On site observation, time study and/or time registration

VSM results Pain points

Stop or Go

Target process

2

Number of SteerCo meetings will vary between PB, BB and C&I Streams and depend on the number of ongoing transformations.

5

Improvements for loans and services enable reduction

of lead time, fewer errors and increased efficiency

Improvements on strategic priorities Example: Andelsbolig tool developed

All key data on relevant association for 'Andelsbolig' available – especially whether valid valuation exists

Freed up time Fewer cases with input errors

Reduced time to yes for

Andelsbolig loans

Customer attention Simplicity Efficiency

From 17 to 5 days

From 50% to 16%

22%

E2E Process Excellence

6

Roll out time frame: N/A Immediately after the transformation 1-2 years after transformation

(dep. on IT-dev. and prioritization)

The road from As-is to Target process

As-is

As-is

As-is

As-is

As-is

Country A

Country B

Country C

Country D

Country E

Reference Process

GROUP

Vision Process

GROUP

As-is Reference process Target process Vision process

The As-is process is the current state of the process in each country.

The Vision process is the ideal process design with full IT-automation.

The Country Target processes are the final optimized processes for each country w/o IT. They are adapted versions of the Group Reference process including the countries’ permanent and temporary gaps. Accepted gaps can only be of legal or system character.

The Reference process is the immediate optimized and harmonized process across countries w/o IT. Each country has to investigate if they have gaps of legal, system or organizational character and whether these are closable, temporary or permanent.

Gaps

Gaps

Gaps

Gaps

Gaps

Country A

Country B

Country C

Country D

Country E

Country A

Country B

Country C

Country D

Country E

Country Target Process

Country Target Process

Country Target Process

Country Target Process

Country Target Process

7

Credit-card example ~34% average process time reduction without IT

DK UK Ireland

-59%

-46%

-50%

Norway Sweden Finland

-18% -4%

-28%

Group aligned target

Local developed target

Before

Processing time

E2E Process Excellence

93 of 118 gaps across countries to target process closed without IT changes

8

Operational Excellence project model

Diagnosis and Design 7 weeks

Implementation 11 weeks

Follow up 18 weeks

Analysis- and project track

Preparation of Business Case and Implementation Plan

Statement of effect and prepare action plan for the follow up period

Implementation of activities according to the action plan

Change Management Track

Initial analysis and project A3

Introduction of weekly operations meetings including target measurement and continuous improvements

Introduction for employees (full day event)

Process mapping

Design Blitz 1 Blitz 2 Blitz 3

Continue weekly operations meetings

Continuous improvements and target measurement

Follow up on implementations done during Blitzes

Management track

Regular Management Discussions (minimum bi-weekly) Management introduction

OM2 OM3

Continued dialogue and follow up

OM4 OM5 OM1

Continuous project progress reporting Project Kick off

Project Management and Commu- nication track

SG1 SG2 SG3 SG4

Communi-cation plan

Continuous communication according to the communication plan (including local newsletters)

9

Key numbers in OE transformation Strategic

Focus

24,9%

Better quality, faster delivery and reduced cost

Lower cost with no loss of guaity and

increased delivery

188

Goals obtained in transformation

Operational Excellence in Branch Services has increased

efficiency and simplified processes to benefit customers

Continuous Improvements

• Better management of workload and resources

• Better and more efficient meetings

• Optimised workflow setup yields increased throughput

• Cross-team interaction and long term efficient processes through multi-skilling and training

• Better utilisation of resources = sustainable long term cost reduction with no loss of quality

• Reliable and more stabile delivery at lower cost

Efficiency

Reduced effort

Qualified ideas suggested and

implemented by subject matter

experts

Faster Delivery

~50%

Example based upon staff input and

approved by management

Simplicity

• Staff and Management has better knowledge and overview of processes and daily operations

• Major reduction of over time is reducing stress

• Staff experience a more calm and well structured work day

Customer attention

• On time delivery will increase customer satisfaction

• More reliable delivery of standard products will improve customer experience

)

11

Service Excellence three overall areas

The main objective of Service Excellence is to improve the sales force effectiveness by focus the sales force , improve effi ciency in daily work (make the machine hum) and aligning the organization

Consists of 10 key drivers

Focus the sales force Target setting Incentives

Training & Coaching Performance Mgm't

Make the machine hum Operating rhythm Lead generation

Sales process & rhythm Mgm't information

Align the organization Organization Resourcing & Utilization

Focus the sales force

Align the

organi- zation

Make the machine hum

Service Excellence

Service Excellence model

12

Service Excellence pilot in Business Direct DK showing results

Improvements on strategic priorities

Daily planning

Task allocation

Freed up time

Fewer inter-ruptions from calls per case

Reduced call abandon-ment rate in Level 1

From 8% to 4% From 40% to

~12% 30%

Customer attention Simplicity Efficiency

Examples of solutions developed

Service Excellence

13

Customer oriented processes

Execution and delivery

Managing continuous improvement

Simplification

Manager role in Think Simple

1 2 3 4

Understand and incorporate

customer value in daily work and strategic priorities

Build simplification capabilities and facilitate collaboration and

problem solving

Structured follow-up of management team with

standardised tools

Facilitate, support and motivate

to drive continuous improvement

Focus area for training in H2 2013

Focus area for training in 2014 Focus area for training in 2014

TSMP focuses on shared knowledge and mindset across the

Group

Focus area for training in 2014

14

Agenda

Introduction to Think Simple

Tools and examples

Summing up

15