Enterprise agility—the ability to respond rapidly to opportunities and disruption—remains a top-of-mind issue for financial services (FS) leaders across the globe.
Accenture’s recent report explains in detail why enterprise agility is a strategic imperative for FS firms and where they currently rank in the agility race. Here are five statistics, from our Transformation GPS study, that every FS leader should know as they continue their agility journeys in 2019:
1. Truly agile firms are more than twice as likely as the average organization to achieve top-quartile financial performance (55 percent vs. 25 percent).
Truly agile firms also show better long-term performance, about 16 percent growth in earnings before interest, taxes, depreciation and amortization (EBITDA) over 10 years (2007 – 2017), 10 percentage points higher than the rest of the benchmark group. Clearly, enterprise agility delivers significant financial benefits, making it a strategic imperative for FS firms.
2. FS as an industry scores below average for velocity and adaptiveness, one of the two key dimensions of agility.
When it comes to speed (the velocity and adaptiveness) of FS firms, there are four important elements to consider: speed to market, responding rapidly, exploiting opportunities and staying ahead. According to Accenture’s FS Agility Index Study, FS firms fall below the 50th percentile on all of these elements. Insurance scored the lowest (16th percentile), with banking (43rd percentile) and capital markets (48th percentile) faring better.
The overall ‘speed-to-market’ score of the industry is just below average at the 47th percentile; ‘responding rapidly’ came in at the 37th percentile; the ‘exploiting opportunities’ and ‘staying ahead’ scores are much lower, at the 30th and 26th percentiles respectively. This presents a strategic risk for FS firms as faster new entrants challenge incumbents.
3. FS firms have a low foundational-base score.
The dimension of agility that complements velocity and adaptiveness is a strong foundational base – it’s the attribute that contributes stability as organizations undertake rapid change. FS firms score in the 41st percentile for a foundational base, with the three sectors—banking (34th), insurance (42nd) and capital markets (44th)—achieving similar individual ratings.
When it comes to the six factors that make up the foundational base, the FS firms in our study fared relatively well in ‘avoiding politics’ (54th percentile) and ‘living the code’ (46th percentile). However, the study revealed they were lagging behind in ‘competing on cost’ (43rd percentile) and ‘paying competitively’ (38th percentile). Of particular concern in the findings are ‘attracting the best talent’, where FS scored in the 35th percentile and ‘having the time, training and resources to ensure quality service’, in which the industry ranked in the 26th percentile
4. ‘Vision and direction’ has three to four times greater impact on benefits realization than any other factor.
Truly agile firms have more leaders committed to change at all levels of their organization: 94 percent of change leaders reported that their senior leaders provided sponsorship of transformational change programs, while 87 percent of team leaders showed a commitment to the change process (compared to 63 percent in the rest of the industry in both areas).
5. The workforces of change leaders thrive on fast-paced change: 83 percent, compared to 51 percent of their peers.
One of the defining attributes of change leaders in FS is their adaptive workforces. To succeed in agile, FS firms must reimagine work, pivot their workforce and ‘new-skill’ their employees. Accenture’s research shows that 75 percent of employees believe it is important that they develop new skills to work with intelligent technologies, but only 4 percent of organizations are significantly adjusting their training budget to support this.
Understanding these key statistics will help FS leaders shape their course as they tackle enterprise agility within their organizations.