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
As financial services (FS) firms look for ways to rewire their enterprises for true agility, there are several key elements to consider. I talked about the importance of leadership, governance and funding in my last post. In this blog, we’ll examine how culture, workforce and organisation need to be reinvented to achieve and sustain agility.
The critical cultural attributes of an agile enterprise include customer focus, innovation, transparency, collaboration, learning and empowerment. Examples of these behaviours might be:
- Inviting customers to participate in design (vs. assuming we know their needs);
- Allowing time and space for creativity (vs. innovation coming from specialists);
- Sharing successes and failures openly (vs. hoarding information);
- Bringing together a new team for a new challenge (vs. sticking to who we know);
- Reflecting and improving from experience (vs. relying on what we always do);
- Making a decision you own (vs. escalating it to cover your back).
These are not the current ways of working in many banks and insurers. FS change leaders will have to work diligently to nudge these new behaviours, with the right leadership remove organisational barriers and help their firms reinvent their core identities.
When we look at new organisational models for agility they tend to be:
- Organic (agility through self-organising work structures that adapt to demands– e.g. experimentation, self-organising teams);
- Modular (flexibility through building blocks that can be separated and reorganised–e.g. new ventures, digital challengers);
- Augmented (faster and data-driven response through technology, humans and machines enhancing each other rather than rigid automation);
- Liquid (scalability and flex through seamlessly accepting the best capabilities from anywhere – e.g. adaptive workforces, ecosystems, marketplaces);
- Human (unleashing passion, purpose and performance in the workforce, customers and others).
A lot of emphasis has been placed on new organisation structures for agility, but structure and organisation charts are not silver bullets. Organisational structure can inhibit or facilitate enterprise agility. For FS change leaders, the key is to look at it from a more organic perspective, one that considers the enterprise as a whole, living business and not one that just puts up new structures. While some parts of a bank or an insurer—such as marketing, product development and technology—are more suitable to agility, our research indicates that all areas of banks and insurers would benefit from some increased agility, resulting in a simpler, more flexible and modular wider organisation.
Currently FS executives perceive the workforce as a barrier to agility. It is certainly true that as businesses need to adapt and respond rapidly and work needs to change, so do the knowledge, skills, behaviours and mind-sets of people. To succeed this, FS firms must reimagine work, pivot their workforce to new growth models and ‘new skill’ their people. The workforce is more ready to adapt than executives think, but need the right support. Accenture’s recent research shows that 75 per cent of employees believe it is important that they develop new skills to work with intelligent technologies, but only 4 per cent of organisations are significantly adjusting their training budget to support this.
All these workforce changes need to display a human-centred approach. In a world of volatility and disruption, in order to be agile, creative and learn people need to feel included, safe and able to trust leadership. In fact, our research revealed that the greatest inhibitor to of change in the FS industry was ‘fear, anxiety and threat’, one of the most negative scores we have seen against this factor. Trust is the antidote to fear in organisations and leaders need to create a psychologically safe environment with the right space for their people to perform.
In short, agility is most fundamentally a cultural change, making it difficult to develop but also difficult to imitate. Underpinning this change are the organisation and workforce.
“The bicycle is a curious vehicle. Its passenger is its engine,” Olympic cyclist John Howard said. The same is true for firms looking to achieve true agility: the passengers will be the ones powering the journey along.
In my next post, I will tackle channels, operations and technology as key elements of true agility.
To learn more, register to download: Enterprise Agility in Financial Services: The New Strategic Imperative