Case Study 3

SMU513

This case was written by Dr Fermin Diez and Adina Wong at the Singapore Management University. The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Copyright © 2019, Singapore Management University Version: 2019-05-10

MAYBANK: ORGANISATIONAL TRANSFORMATION THROUGH HUMAN RESOURCES

Our corporate mission — humanising financial services from the heart of ASEAN — applies to how we do business, not only externally, but also internally. It is about how we operate as a team and how we treat each other.

- Nora Abd Manaf, Group Chief Human Capital Officer, Maybank Group1 It was January 2018. Nora Abd Manaf, Group Chief Human Capital Officer, Maybank, the largest bank by market capitalisation in Malaysia, thought back on the time in 2008 when she had received a call from Tan Sri Dato’ Sri Wahid, the then Group CEO of Maybank. Wahid had invited her to join the Bank in a key strategy role, to enable its transformation from a strong local bank to a regional player. At that time, Maybank had a proud history of 48 years, and Nora had known that change would not be an easy task. Nevertheless, she accepted the challenge. Wahid and Nora, along with the Group EXCO colleagues, launched a transformation plan for the business and the HR function in two phases, spanning 2008-2015. The transformation encompassed revamping the organisational structure of Maybank to facilitate its regional aspirations. As a regional organisation, more visibility was needed within the organisation to enable cross-synergies. Maybank’s HR strategy also had to transform to facilitate successful regional expansion. Its core values needed to be recast to drive employee confidence and inspire them to achieve the business’ objectives. The Talent Management Framework needed to be reviewed and renewed in order to drive a high-performance culture, underpinned by the right policies and processes. Good performance needed to be recognised, and actions aligned with the Bank’s objectives had to be fairly rewarded. The Bank also had to reposition itself as an employer of choice for talented potential new hires. In 2015, on the back of stellar results achieved in the implementation of the Maybank transformation strategy, the Bank set its sights on maintaining its lead against the new headwinds of digitisation and automation in the industry. Nora was now working to poise the organisation for its foray into the next frontier of artificial intelligence, the gig economy and a new generation of millennial employees. She thought hard about the next steps to be taken in preparing Maybank’s employees for this new and imminent wave of change.

1 “Maybank, Malaysia: 10 Questions for Nora Abd Manaf, Senior Executive Vice President and Head, Group Human Capital”, Willis Towers Watson, August 30, 2011, https://www.towerswatson.com/en/Insights/ , accessed February 2017.

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Maybank Group In early 2018, Maybank was among Asia's leading banking groups and South East Asia’s fourth largest bank by assets, in addition to being the largest in Malaysia by market capitalisation. The Maybank Group had an international network of over 2,200 offices in 20 countries - Malaysia, Singapore, Indonesia, the Philippines, Brunei Darussalam, Vietnam, Cambodia, Thailand, People's Republic of China, Bahrain, Uzbekistan, Myanmar, Laos, Pakistan, India, Saudi Arabia, Great Britain and the United States of America. The Group offered an extensive range of products and services, which included consumer and corporate banking, investment banking, Islamic banking, stock broking, insurance and takaful and asset management. It had over 43,000 employees worldwide. External and Internal Crisis 2008 was a momentous year for Maybank as it celebrated a track record of 48 profitable years, albeit registering declining growth in the more recent years prior to 2008. This was despite the onset of the global financial crisis that had severely impacted many global banks, and a general loss of confidence in the growth potential of the banking sector. Maybank itself, along with other Malaysian banks, was relatively unscathed. Thus, it was not much of a surprise that the Bank’s 2008 annual report mentioned plans to become a ‘leading regional financial services group’, rather than being content to focus on growing domestically.2 The Bank brought in a new CEO that year and a new Chairman in 2009. This new regional push meant that Maybank needed to make acquisitions in a more definitive manner. On 26 March 2008, Maybank announced that it would be acquiring Bank Internasional Indonesia (BII), the sixth largest bank in Indonesia.3 The deal, which concluded in December 2008, had Maybank paying approximately RM4.26 billion (US$1.05 billion)4 to Temasek Holdings’ Fullerton Financial Holdings Pte Ltd and Kookmin Bank for a 55.6% stake in BII5, while purchasing the remaining shares from other shareholders for slightly over RM3 (US$0.74) billion.6 This acquisition would give Maybank a foothold into the fast-growing banking industry in Indonesia, an underpenetrated market and the largest economy in Southeast Asia.7 Indonesia also had the largest Muslim population in the world, and Maybank saw many synergies with being able to grow

2 Maybank Annual Report 2007, http://www.maybank.com/en/investor-relations/reporting-events/reports/annual-reports.page, accessed March 2018. 3 “Maybank Wins Bid to Acquire Bank Internasional Indonesia”, Maybank2u, March 26, 2008, http://www.maybank2u.com.my/...Personal, accessed March 2018. 4 US$ 1 = MYR4.06158 as at 1 January 2018. 5 Bursa Malaysia announcements dated 30 Sept 2008 for final payment to Fullerton, 7 Oct 2008 purchase price for additional 16.26% stake in BII and 2 Dec 2008 for remaining stake in BII as well as deal completion http://www.bursamalaysia.com/market/listed-companies/company-announcement/647677 6 “Maybank Wins Bid to Acquire Bank Internasional Indonesia”, Maybank2u, March 26, 2008, http://www.maybank2u.com.my/...Personal, accessed March 2018. 7 “Maybank in $2.7 Billion Bid to Buy BII of Indonesia”, NYTimes, March 26, 2008, http://www.nytimes.com/2008/03/26/business/worldbusiness/26iht-maybank.1.11429856.html, accessed March 2018. “Maybank's Buy in Indonesian Bank an Important Move Regionally, Says Nor Mohamed”, Bernama Daily Malaysian News, 14May2008, Factiva database via SMU Pyxis, accessed March 2018.

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its Islamic banking business, as many corporates in Malaysia were already doing business in Indonesia (Malaysia was itself a majority Muslim country).8 However, the terms of the deal were viewed with skepticism by onlookers, who found the price tag expensive.9 The day following the announcement of the proposed acquisition of BII, Maybank’s share price fell to its lowest in 3.5 years on concerns over the valuation of the deal (refer to Exhibit 1 for share price chart and financials of Maybank from 2007-13).10 Maybank managed to bring down the price-to-book ratio from an initial high of 4.6x to 4.1x, and subsequently even further through a rights issue.11 In early 2009, Maybank undertook a rights issue, raising roughly RM 6 billion (US$1.48 billion), to fulfill its working capital needs as part of its regionalisation ambition, and as a pre-emptive move to strengthen its capital structure, given market expectations for financial institutions globally to hold higher capital levels. While working on integrating BII as part of the Maybank Group and expanding its regional ambitions, Maybank also acquired Singapore-based stockbroker Kim Eng Holdings in 2011 to the tune of S$1.79 billion (US$1.39 billion12).13 Not only was Kim Eng Holdings a top-five stockbroker in leading ASEAN markets such as Indonesia, Thailand and Singapore, it was a strategic addition to build out Maybank’s regional capabilities in investment banking and the equity markets. The continuance of the acquisition strategy and fortification of new business lines made it even more imperative that the HR function needed to adapt more quickly to the speed and complexity of change. Nora explained, “As in any major acquisition, there will be sentiments from shareholders. However, with the BII acquisition, we believed that it was a strategic move for Maybank to get its footprint into the Indonesian banking market to regionalise our operations.”

When asked if BII bank employees trusted the new management, she replied, “As with any new management takeover, building trust is a key priority. Whilst there is always trepidation, there was appreciation for the value that all stakeholders could reap from this opportunity. This was operationalised through a transformation project team directly accountable to the management team.” She then added, “There was no way to determine if the timing of the acquisition was right as the decision to acquire BII was made prior and we had to proceed with it. We then put in motion a repositioning strategy as well as transformation initiatives. However, ten years into the acquisition, Maybank Indonesia has now become a significant contributor to the Maybank Group. We have seen traction in its financial performance since and we believe the key drivers of this success were a

8 “Maybank Wins Bid to Acquire Bank Internasional Indonesia”, Maybank2u, March 26, 2008, http://www.maybank2u.com.my..., accessed March 2018. 9 “Maybank’s Indonesian Bet Pays Off”, The Edge Report, April 11, 2017, http://www.theedgemarkets.com/article/special-report-maybank%E2%80%99s-indonesian-bet-pays, accessed March 2018. 10 “Maybank Shares Dive after Pricey BII Purchase”, CNBC, March 27, 2008, https://www.cnbc.com/id/23820932, accessed March 2018. 11 Joyce Goh and Anna Taing, “Special Report: Maybank’s Indonesian Bet Pays Off”, The Edge, April 11, 2017, http://www.theedgemarkets.com/article/special-report-maybank’s-indonesian-bet-pays, accessed September 2018. 12 US$1 = S$1.2882 as of January 2011. 13 “Maybank Expands Regional Investment Banking Platform Via Acquisition of Strategic Stake in Kim Eng”, January 6, 2011, Maybank, http://info.maybank2u.com.sg/about-us/news/2011/6jan11.aspx, accessed May 2018.

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sharper focus on leadership and better business planning. The existing management team was very experienced and aligned with Maybank’s culture.” New Leadership, New Direction, New Hires New CEO In May 2008, Tan Sri Dato’ Sri Wahid joined as CEO of Maybank. Trained as an accountant, he had built a reputation as a problem-solver at several Government-linked companies in Malaysia, including the successful turnaround of an indebted infrastructure company.14 He came into Maybank with the expectation that he would help the bank successfully navigate the pressures of the global financial crisis, and maintain Maybank’s lead as the largest bank in Malaysia.15 Wahid observed that when he joined the Bank, it was growing at a mere rate of 5% per annum, compared the average annual rate of 20% of its competitors CIMB, RHB and Public Bank.16 This meant that Maybank could lose its pole position and fall to third place within two years. The focus was on getting the right talent on board to turn the company around. Wahid said,

We don’t want to do the same amount of business with fewer staff but grow the business so everyone is productive. If you have the option to grow the business to a level you can justify the staff you have, then pursue that option.17

Reflecting on the results of the transformation much later, Wahid observed, Within 18 months the business had grown so fast there was no need to retrench staff… Maybank became the most valuable company listed on Bursa Malaysia.18

To ensure that the human capital was capable of carrying out the Bank’s strategy, Wahid first communicated the imminent threat to the Bank’s leadership in the industry, creating a ‘burning platform’ about the urgent need for change in the way business was being done. Second, he hired senior management from outside the bank who would be able to drive the change that was needed to achieve its objectives. One of his first new hires was Nora, who joined as Senior Executive Vice President, Human Capital, in October 2008. Nora joins Maybank Nora herself came in with a broad swath of industry experience. A trained accountant who had studied Human Resource Development at Cornell University, Nora had worked in the

14 Amy Duff, “Profile: Tan Sri Abdul Wahid Omar”, Economia, May 8, 2017, https://economia.icaew.com/features/may-2017/profile- tan-sri-abdul-wahid-omar, accessed March 2018. 15 Ibid. 16 Ibid. 17 Ibid. 18 Ibid.

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telecommunications and semiconductor industries early in her career.19 She then rotated through different HR roles within Asia and in London with Standard Chartered Bank, before taking up Wahid’s offer to join Maybank.20 Nora’s early days at Maybank were not always smooth. As an outsider, she had to convince senior management that as part of the Executive Committee, she could do the job. She recalled,

With 48 years of operating very much with a country focus and then taking on other MNCs who are 100 years ahead of them, Maybank has become the number one bank in Malaysia. This is a proud organisation, and rightly so; it’s earned that right. The organisation and its people would therefore question – who was I to come in and tell them what to do?

Nora had to establish her credibility with her executive committee members before she could put any change recommendations forward. However, she persisted, eventually overcoming resistance to her ideas. She explained how she managed to win the acceptance of her senior management peers,

You have to know your stuff – you can’t wing it. Knowing your stuff means knowing the business of Maybank, and not just the HR component. If you’re supposed to represent the knowledge on human performance and workplace effectiveness and its impact on the business, and if you don’t have it, then you don’t have the right to be at the table.

Group Transformation In July 2009, Wahid announced that Maybank was undertaking a massive programme, LEAP30 (Lead, Execute, Achieve, Progress), that would entail a “group-wide transformation of people, processes and systems” (refer to Exhibit 2 for LEAP30 objectives). LEAP30 was Maybank’s performance improvement programme to achieve the Group’s vision to become a leading regional financial services group by 2015, focusing on three strategic thrusts:21 • Secure Maybank’s position as the undisputed leader in financial services in Malaysia

• Strengthen regional presence through enhancing the quality of operations in seven out of 10 Asean countries Maybank operated in, whilst continuing to look for opportunities in other lucrative growth markets in the region

• Become a talent and execution-focused company

Under the Transformation programme, 30 initiatives were identified in nine areas of the bank, including human capital, finance, operations and the different business lines. Wahid explained,

19 Profile of Puan Nora Abd Manaf, August 24, 2016, http://mcba.my/member/web/bundles/mcba/files/profile-of-puan-nora-abdul- manaf.pdf, accessed March 2018. 20 Crunchbase, “Nora Abd Manaf”, https://www.crunchbase.com/person/nora-abd-manaf, accessed March 2018. 21 Aditi Sharma Kalra, “Banking on a New Way of Working”, Human Resources, August 28, 2015, http://www.humanresourcesonline.net/features/qa-nora-abd-manaf-maybank/, accessed February 2017.

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Through LEAP30, we have begun to realign our operations, re-engineer organisational processes as well as build a high-performance talent pool that will serve as the foundation for sustainable growth in the future.22

Within the first year of implementation, 16 of the 30 identified initiatives of LEAP were under way, and had borne fruit, bringing about RM183 (US$45) million in additional pre-tax profit and cost savings for the bank.23 Humanising Of the 30 transformation programmes, many were focused on People and Performance. Maybank was aware that the day-to-day impact of people and culture carried a lot of weight; therefore, all its people initiatives were guided by its Five People Pillars (refer to Exhibit 3 for the five People Pillars). These People Pillars were also aligned with Maybank’s mission to Humanise Financial Services. Humanising was conceived of in terms of being closer to the communities that the bank operated in, and helping its customers achieve their aspirations. Humanising human capital within the bank would mean making employee development a top priority. Training employees, empowering them, and aligning them with the bank’s vision and mission, would make it easier to execute the business strategy. As Nora explained,

Humanising is about the customer (staff) experience, together with speed and low cost. Humanising is not just a word. You can’t tell people to do unto others when things are not done unto them. We have a number of pillars of humanising from a staff’s standpoint. We check if we are really acting on these five pillars at any time, e.g. respect, fairness and transparency.

Two phases of Transformation LEAP30 was carried out in two phases. Phase I, which was carried out from 2009-10, was dubbed ‘creating the momentum’. It aimed to put in place the organisational structure and lay the ground for building organisational capability by increasing the project execution capabilities and human capital development of the bank.24 In July 2010, the bank reorganised itself into a structure called the ‘House of Maybank’, in order to drive the three key businesses regionally—Community Financial Services, Global Wholesale Banking and Insurance and Takaful.25 The new structure would encourage greater cross-border cooperation to bring about increased cross-selling and bundling of products and services to customers (refer to Exhibit 4 for the House of Maybank organisational structure).

22 Annual report 2009, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 23 Ibid. 24 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 25 Ibid.

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Phase II of the Transformation, which lasted from 2010-15, was called “converging aspirations”, in which the bank’s businesses would individually drive their own initiatives, as well as capture cross- business synergies, to facilitate bank-wide performance.26 The bank projected to have more than 40% of its pre-tax profits derived from operations outside of Malaysia by the end of the Transformation programme in 2015. 27 At the beginning of 2014, Maybank again revamped its structure to strategically enable its regional expansion. The new structure was intended to enable better collaboration across countries and deployment of resources across the region. Human Capital Transformation First steps Overseeing massive change To oversee the implementation of HR initiatives, Nora started two units. The Overall Transformation Office unit tracked milestones that were set at the start of the programme. The Group Human Capital Change management unit was managed directly out of Nora’s office as she felt that the ability to respond with agility and granularity was critical. In her view, decision making and implementation of changes had to be quick when scenarios changed, or reinforcements were needed. Reorganising the HR function In 2008, Nora reorganised Group Human Resources to drive change more effectively within the bank.28 A Centre of Expertise would provide advisory and functional expertise on HR solutions, policies and governance for the bank. Business HR units would provide HR solutions that integrated well with the Bank’s structure, to ensure that business targets were met. A dedicated Shared Services Centre was also set up, which comprised a one-stop centre for consolidated services including payroll, benefits, data management, and a recruitment centre to enhance capabilities in recruiting in an effective and speedy manner. Human capital objectives Nora’s goal was to make Maybank the top quartile employer of choice in the markets in which it was present. Her primary objectives were: to improve Maybank’s capability to attract the right talent, inculcate a high-performance culture, reward and recognise excellent performance, and develop and build a strong leadership pipeline.29 To do so, a HR transformation roadmap was drawn up to ensure a holistic approach to drive workforce transformation in three principal areas – people policies, product and processes; manager and employee interaction; and work environment.30

26 Ibid. 27 Ibid. 28 Annual report 2009, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 29 Ibid. 30 Ibid.

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Implementing Change to Support Business Strategy

Growth for the bank and our employees meant getting all on board to do the right things right, building meaningful relationships with one another and our customers, for all to thrive.

- Nora Abd Manaf

Nora’s People Transformation Plan was mapped out at the end of 2008. 31 It was deliberately formulated to carry out and support the bank strategy and mission, both in terms of spirit and substance. It entailed first a review and admission of HR policies and processes to understand what was not working well, and what needed to be fixed, replaced, or created in order to meet Group objectives and sustain them. Encouraging change in the right direction - Culture Nora was very sure that values and culture were the bedrock for change. Establishing organisational performance improvement could only happen if the foundational values of the organisation were strong and the employees lived by them. The imperative for the Maybank Group was to change, and the change had to start internally. The key attributes of the Maybank culture and values were summarised in the acronym ‘T.I.G.E.R.’ which stood for ‘Teamwork, Integrity, Growth, Excellence and Efficiency, and Relationship Building’. The tiger, Malaysia’s national animal, 32 symbolised strength, grandeur and pride, characteristics that Maybank wanted to be synonymous with—a symbol of pride as the country’s largest bank, and also a company that its customers and employees were proud to associate with. Enabling and empowering Maybankers to deliver value and difference was a priority. Interventions were emplaced to drive the right behaviours across the Group, which included strengthening the performance management system, breaking silos through team effectiveness programmes and coaching, programmes to improve technical, function or product knowledge, succession planning and skills pipelines. HR policies were simplified, those that were outdated were eliminated, while new ones were created to reflect the TIGER values. Changes to the Delegation of Authority (DOA) and Terms of Reference (TOR) were approved by the Board in 2009. These changes gave more autonomy to management to address people-related issues, transforming how work was done in the Group, i.e., reduced turnaround time in processing and approving facilities. Upskilling and capacity-building programmes were also redesigned and implemented to support this transformative phase via a combination of training, on-the-job coaching, learning clinics, Brown Bags and workshops. An enhanced total

31 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 32 Malaysian’s Pride, http://butterfly-insect.com/blog/malaysians-pride/, accessed March 2018.

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rewards framework was implemented to drive high performance and delivery of results. Workshops were introduced and compensation spreadsheets implemented to empower line managers to manage and reward staff accordingly. Greater line manager ownership was key to encourage ownership, engagement and greater growth (refer to Exhibit 5 for the TIGER values).33 Nora explained,

The work culture had to evolve to allow Maybankers to realise their ambitions and excel while ensuring that our TIGER did not change its stripes and that our values continued to be integral to the Maybank way of life, ideals that drive what we do and how we do it.

Communication During the transformation process, constant and clear communication on the Bank’s vision, mission, actions and expectations of employees were a top priority for the Group executive committee (EXCO) and senior management.34 The Group EXCO led mandatory training curricula, which included leaders-teaching-leaders series, conversation and dialogue series, learning interventions, and coaching. The EXCO was also involved in employee engagements, such as quarterly CEO-led group townhalls, and regional and sectorial roadshows, to reinforce ways of working and addressed pain points swiftly. Group EXCO also practiced constant engagements to listen and act on employee feedback and suggestions through multiple forums and platforms. Besides, employees had opportunities to engage with management through many formal and informal sessions, including regular emails from the President & CEO, updates on the employee portal, responding to feedback on the ‘ask senior management site’, teh tarik (tea) sessions, roadshows, C-suite conversation series sessions and visits to the business units. This also included monthly effectiveness measurement indicators, and a yearly employee engagement survey (EES).35 Leadership values Maybank’s leadership talent competencies were newly defined at the onset of the business transformation process and measured against the Group’s set of leadership competencies known as S.E.A.R.C.H. (Strategic Visioning, Engaging and Developing Talent, Spirit of Achievement, Cultivating Relationships, Customer-Centricity and Innovation and Change). It was reviewed and updated again in 2014 to S.E.A.R.C.H. PLUS, which also measured benchmarks like global acumen, navigating complexity, and raising the bar. There was a continual process of updating these competencies to constantly ensure that they were leading (as opposed to lagging) predictors of talent success. Nora explained,

It is our internal “ruler” used for development, coaching, mentoring and succession planning and, equally critical, preparing our employees to be productive and responsible leaders of today and tomorrow.

33 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 34 Ibid. 35 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018.

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Increasing Internal Visibility Dashboards Within the HR function, the policies and practices that had worked well for Maybank as a local player were no longer sufficient or effective given the bank’s ambition to be a regional player. A centralised People Database that enabled better visibility of talent within the Group was created and rolled out in 2009. This was in contrast to the erstwhile, more decentralised model that was highly reliant on manager sponsorship. Complementing this, a monthly People Dashboard (related to the internal Talent Management Framework) was introduced in monthly EXCO and Management meetings in 2009. This provided a standard and consistent discipline of data capture, tracking and reporting of key performance metrics. The HR Shared Service Centre began tracking predictive indicators. This was a conscious decision made to directly steer HR policies to ones that were progress-enabling, and not only about operational mastery. In time, the HR function was regarded in a better light by internal customers, and the improved relationship brought about better work outcomes. Enhanced Talent Management Framework An enhanced version of the integrated and systematic Talent Management Framework (TMF) that was launched in 2009 aimed to ensure the sustainability of Maybank’s talent pool by continuously attracting, developing and retaining the right talent. Apart from ensuring that talent progression was consistently tracked and reviewed through multi-level talent reviews, and that individual development plans were implemented, Nora ensured that the bank’s people policies and practices were aligned with its promise to humanise people management and development. In 2009, a Talent Classification Matrix was introduced into the TMF to enable line managers to classify their employees according to their performance levels and potential. Promising talent, identified by their managers, was then evaluated twice a year by a Sectorial Talent Review Committee, which was chaired by the business sector head and factored into the annual budget process.36 In 2011, to meet the Group’s regional need for talent, the Talent Management System was rolled out. The expanded platform provided a consolidated view of staff skills, achievements and career aspirations, and also helped the bank identify the best qualified individuals for any given position in the region. Employees were evaluated, not only through a Sector Talent Review, but also a Country Talent Review and Group Talent Review process. The increased visibility across countries through the multi-level talent review platform enabled greater number mobility and accelerated development of talent.37 As a result, by 2012, inter-sectoral transfers increased from 9% to 16%.38

36 Annual report 2009, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 37 Annual report 2011, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 38 Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018.

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Succession planning The enhanced talent management process also facilitated succession planning across the bank with more transparency and effectiveness. Maybank’s target to grow their internal talent by filling eight out of every 10 vacancies with internal talent was achieved, with more than 70% of vacancies filled internally in 2013.That year, more than 100 staff were deployed in cross-border assignments and regional projects, a steep rise compared to 54 in 2012 and 11 in 2011.39 Performance Management and Compensation Performance management Besides recruiting top talent in the region, Nora wanted to aptly retain and reward employees, so that they could grow with the Bank. In order to be an employer of choice, Nora reviewed the Bank’s compensation philosophies. This resulted in a performance management process and talent reward system that was rigorous, reflected the bank’s culture and values, and encouraged and reinforced behaviour that was aligned with its objectives.40 In 2012, the Performance Management System and Balanced Scorecard (BSC) were enhanced to empower staff to take more ownership of their careers and have a greater line of sight of their contributions to the Group, while maintaining alignment with the Group’s Key Performance Indicators (KPIs).41 The enhancements included replacing the 5-point scale with Met/Not Met for a maximum of eight KPIs and Core Values rated as Demonstrated/Not Demonstrated without weightage. Performance Management was also more focused on agreed impact between staff and line manager. In order to instil a pay-for-performance, meritocratic culture, Maybank’s total rewards strategy was carefully tied to business strategy to achieve a twofold objective—ensure profitability and value to shareholders and be able to attract, retain and motivate employees to improve their performance and grow their careers at Maybank (refer to Exhibit 6 for the elements of the total rewards strategy).42 The rewards were structured to encompass both monetary and non-monetary incentives. Basic pay was competitively benchmarked against the market, and total compensation included short-term and long-term incentive pay-outs.43 Non-monetary benefits included medical and health benefits, and work experience-related recognition such as long-service awards and career development paths.44 39 Annual report 2013, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 40 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 41 Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 42 Annual report 2014, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 43 Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 44 Annual report 2014, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018.

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Employee Development Training and development of staff was a very high priority for Nora. In 2012, the Group invested RM100 million (US$24.62 million) in learning and development programmes. Staff training expenditure stood at 3.17% of total gross salary, far surpassing Bank Negara Malaysia’s minimum requirement of 2.5%. In 2012, Maybank launched 280 e-learning courses, including 15 new syllabi, were offered with 108,558 enrolments.45 Group Organisational Learning (GOL), also under Group Human Resources, prescribed a ‘70:20:10’ - 70% experiential, 20% relationship-based, and 10% formal learning - philosophy for employee development. Experiential learning included assigning employees to new projects or providing them international exposure. Relationship-based training included mentoring, buddy programmes, and conversations with leaders. Formal learning was through platforms that included the MyCampus online e-learning portal, Maybank Academy (for customised courses, mainly for the SEARCH competencies), and external programmes.46 Employee Welfare

It all comes down to enabling realisations, creating the right climate with progressive policies and interventions that help people work and engage whilst entrusting them to make good on what has been delivered for them. Effectively, all the efforts were about co-creating for a shared future.

- Nora Manaf

On top of shaping the HR processes and policies to motivate employees to perform and align their behaviours with strategy, Nora put in place measures to improve their quality of work life. This was part of her promise to enable employees to manage work and life so that they could perform their roles effectively whilst in the workplace. Recruitment Nora streamlined the recruitment process by transforming the recruitment function into one centralised ‘talent factory’. This was to enable reaching out to and attracting the best talent with a consistent experience.47 In order to find exceptional talent, Nora decided to employ non-traditional recruiting methods: • An award-winning international case competition, Maybank GO Ahead Challenge (MGAC), to

spot diverse, global talent. The uniqueness of the MGAC was that it exposed candidates to real-

45 Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 46 Ibid. 47 Annual report 2010, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018.

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life pressures and expectations of a high-performing organisation, challenging participants in both financial and non-financial disciplines.

• Junior and entry development programmes that included the High Potential-Performer Integrated Programme, the Branch Manager Entry Level Programme and the Global Management Apprentice Programme. The latter was an entry-level programme that offered two-year rotational opportunities and best-in-class learning, and development through on-the-job training and international assignments.

To improve recruitment and external branding of the Group, Maybank invested in schemes and initiatives that re-introduced the Group to the market from an employer perspective. For example, in 2012, Maybank created an Employer Value Proposition (EVP) to express its humanising mission and differentiate itself as an employer of choice. Its ‘GO Ahead’ EVP was both a mantra and statement of intent: Maybank goes beyond keeping promises to exceed expectations. GO Ahead Create, GO Ahead Grow, GO Ahead Lead and GO Ahead Fly.48 The Maybank brand was also rejuvenated within the organisation. In 2011, a Brand Advocacy Initiative was launched to further clarify the identity of the Maybank brand. Employees were guided on how to use humanising as an impetus and rationale for their actions.49 Results of the Transformation and Looking Ahead In 2013, Wahid left his position as Maybank CEO following a surprise offer by the Malaysian Prime Minister to join his cabinet and give a private sector viewpoint on Malaysia’s future economic development.50 Nora stayed, and in her capacity as Group Chief Human Capital Officer and Group EXCO, she continued the effective execution of the Transformation plan she designed from the start. By the end of 2015, the Transformation plan had yielded many positive results for the bank. Financials By 2015, Maybank Group had expanded its footprint to all 10 ASEAN countries. Apart from being the leading Islamic bank in ASEAN and Malaysia, it was also one of the top Islamic banks globally. Greater synergies were forged within its regional network and the company recorded higher revenues from cross-selling of products and solutions to its clients. Revenues for 2015 stood at RM40,556 (US$9,985) million, more than double that of RM18,560.2 (US$4,570) million in 2010. Pre-tax profit was RM 9,152 (US$2,253) for the same year, up 70% from RM5,370.4 (US$1,322) million in 2010.51

48 Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting-events/reports/annual- reports.page?, accessed March 2018. 49 Ibid. 50 Amy Duff, “Profile: Tan Sri Abdul Wahid Omar”, Economia, May 8, 2017, https://economia.icaew.com/features/may-2017/profile- tan-sri-abdul-wahid-omar, accessed March 2018. 51 Annual reports 2010 and 2015, Annual Reports, Maybank, https://www.maybank.com/en/investor-relations/reporting- events/reports/annual-reports.page?, accessed March 2018.

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The bank continued to chalk up improvements in its people’s performance given its disciplined approach from the onset of transformation to raise productivity. Income per employee and profit per employee showed a steadily increasing trend from 2012 (refer to Exhibit 7 for figures). Employee responses Maybank’s staff engagement score had significantly improved since 2008. The results showed that staff understood the rationale for being a truly regional organisation with a favourable rating of 86% in 2014, which further increased to 89% in 2017. As a recruiter, the increasing number of submissions in the MGAC every year attested to the visibility of the Maybank brand. Introduced in 2012, MGAC attracted 1,000 applicants in its first year, rising to 5,000 in 2013, 10,000 in 2014, 23,000 in 2015, over 37,000 in 2016 and, in 2017, 40,000 applicants. Conquering the future On 7 April 2016, Maybank published its 2020 strategic objectives on back of the results of the Transformation programme that was completed in 2015. In it, the new Group President and CEO, Datuk Abdul Farid Alias, declared that one of the bank’s ambitions was to be the ‘digital bank of choice’ for its customers,52

Today, everyone is talking about digitisation and the banking industry is witnessing a breed of digital players encroaching into the traditional banking business. Our customers are also changing the way they interact with us, as they are even more digitally savvy. How aptly and quickly we respond and adapt will determine the fate of the Maybank brand in the future.

For Nora, her role and her task going forward was clear. She explained,

The banking landscape is shrinking in the physical world whilst growing dynamically in the digital world, emphasised by the push in Fintech. For this, it requires us to ready our employees now with the skills and capabilities to operate successfully and ethically in these times. No one will be spared from the disruptions that are around.

Getting the Maybank house in order was just the first step. There was much work to be done to prepare the organisation for the imminent waves of change coming.

52 “Maybank Outlines Its 2020 Strategic Objectives”, Maybank, April 7, 2016, http://www.maybank.com/iwov- resources/corporate_new/document/my/en/pdf/corporate-news-release/2016/AGM2016FINAL.pdf, accessed March 2018.

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EXHIBIT 1: SHARE PRICE CHART AND FINANCIALS OF MAYBANK FROM 2007-17 Maybank share price (in MYR)

S Source: Yahoo! Finance, accessed 15 March 2018. Maybank Income Statement

Source: Malayan Banking Berhad Group, S&PCapitalIQ database, via SMUPyxis, accessed March 2018.

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EXHIBIT 2: LEAP30 INITIATIVES

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Source: Annual report 2009, Annual Reports, Maybank, https://www.maybank.com/en/investor- relations/reporting-events/reports/annual-reports.page?, accessed March 2018.

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EXHIBIT 3: HUMANISING MISSION: FIVE PEOPLE PILLARS

YOU Matter Go Ahead. Grow Diversity & Inclusion

Respect & Dignity Fairness & Transparency

We listen when you speak. Act on feedback. And make time to explain decisions.

You are encouraged, helped, supported and enabled when you want to learn, develop and grow.

You are valued for who you are and what you bring to the team, and we look for your uniqueness and embrace different views.

We show the same respect to anyone, regardless of level, race, age. We are ethical in our dealing. And we have honest, open and trusting conversations with you.

We strive to ensure you are informed. We encourage you to seize opportunities.

Source: Maybank

EXHIBIT 4: HOUSE OF MAYBANK ORGANISATIONAL STRUCTURE

Source: Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor- relations/reporting-events/reports/annual-reports.page?, accessed March 2018.

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EXHIBIT 5: TIGER VALUES

Source: Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor- relations/reporting-events/reports/annual-reports.page?, accessed March 2018.

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EXHIBIT 6: ELEMENTS OF THE TOTAL REWARDS STRATEGY

Source: Annual report 2012, Annual Reports, Maybank, https://www.maybank.com/en/investor- relations/reporting-events/reports/annual-reports.page?, accessed March 2018.

EXHIBIT 7: INCOME PER EMPLOYEE AND PROFIT PER EMPLOYEE 2012-2016

Year/US$ Income per employee Profit before tax per employee

2012 88,024 41,152 2013 95,546 45,713 2014 96,988 47,690 2015 113,777 49,027 2016 124,646 49,518

Source: Maybank

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