Other parts of this series:
- Agility is the strategic imperative for financial services firms
- Financial services needs to speed up efforts in the agility race
- To win in agility, financial services firms need to strengthen stability
- How to rewire financial services for true agility
- How to rewire leadership, governance and funding for true agility
- How to rewire culture, workforce and organisation for true agility
- How to rewire channels, operations and technology for true agility
- Agile in financial services: No silver bullet, no panacea
- Navigating the agility journey in financial services
- Reflections on an agile future in financial services
In the last several blog posts, I have been unpacking our latest report, “Enterprise Agility: The New Strategic Imperative,” and highlighting the key elements financial services firms need to rewire for true agility. These have been about rewiring the whole business to be more fast and stable.
The last factor is about agile change. Agile has its origins in 1948 in a Toyota factory as lean empowered teams solved constraints in car production and in a ski lodge in Utah in 2001 as the agile manifesto for software development was developed. Since then these ideas have spread way beyond manufacturing and IT, to all change.
There is a lot written on agile change and there are dozens of delivery methods, but for simplicity, agile allows organisations to embrace an iterative or continual approach towards change. Between each iteration or continually learning, reprioritisation and planning happens, allowing changes to be delivered in unpredictable and changing environments. Between each iteration, tight multi-disciplinary teams learn together and build their effectiveness. As change focuses on the customer and value is delivered iteratively or continually, momentum is much easier to build and benefits are accelerated.
Our 2017 FS Change Survey revealed that FS change leaders are using significantly more agile change than their peers (60 per cent vs. 37 per cent) and use agile for larger-scaled transformational change. They are also using agile change more effectively and with stronger disciplines, especially as they scale up. As a result, they see better outcomes and benefits; faster delivery; increased collaboration; improved stakeholder involvement; and lower costs and efficiency.
Whereas in the past FS firms have not followed a delivery approach or have been used to linear waterfall and programmatic delivery, we are now beginning to see more banks and insurers tackling more complex, transformational changes using agile. As larger-scale and more complex change is addressed agile needs more delivery discipline – agile should not mean fragile and it is not an excuse to abandon planning or design disciplines for instance. An iterative approach can also lower investment risk (investments are made in tranches, rather than large sunk costs) and deployment risk (as changes are disaggregated away for big bang deployments).
Transformation, by its pure definition, fundamentally changes what the business is, the way it does things and serves customers. Transformational changes are often leaps forward into the unknown, better executed iteratively to handle unpredictability and emergent change on the way. The journey into the unknown sometimes delivers more value through learning than the initial sought-after result. For example, one Accenture client field-tested a ‘big bet’ after a few iterations. While its core concept failed, a previously unknown concept came into view during customer trials. Many transformational changes often carry big changes in customer and colleague behaviours; which, as we know from neuroscience and behavioural economics, are often best tackled as a small series of nudges and habit formations. The risk with executing transformational changes through agile is that changes become incremental rather than transformation–so maintaining strong vision and purpose is vital.
Put simply, a truly agile organisation needs to be exceptional at continual change within the business punctuated by major transformational leaps.
Enterprise agility for FS firms will be a skill they will continue to practice to get better in time. Going from riding a bike for fun to riding professionally needs a lot of discipline and practice, not dissimilar to the movement from small scale agile change to scaled agile.
To learn more, register to download: Enterprise Agility in Financial Services: The New Strategic Imperative and listen and subscribe to our podcast, Talking Agility.