As one of the brains behind ING Bank’s recent transformation program to “spotify” their organization, here’s Payam Djavdan sharing its key principles and approach.
One of the first goals was achieved with the Less is More-program.
Although Apple offers just about 20 products, compared to Philips with about 2,000 products- if you compare these two companies’ total yearly revenue the results are just the opposite.
So, ING reduced the number of processes from 3,000 to just 200 in three years.
Additionally, at ING, like any other bank, they have different channels to communicate with their customers and sell their products: internet, mobile, face-to-face, etc. Their mission on this project, the Omni-channel, is to put all the channels together so that the customer is able to switch between these channels without any friction.
When they merged with Postbank, they were about 18,500 workers in the Netherlands. After four years, they had 14,500 people left. When ING finished with the Less is More project, there were around 12,500 workers left. In 2014, when they started with the Omni-channel program they set the goal to not being more than 10,000 workers in the Netherlands by 2017. But to do that, they needed to become more agile.
As technology is changing faster and clients are having more options than ever before, the need for agility, availability, and personal service is becoming more urgent. This in return requires speed, less coordination, and more responsibility.
So they started forming squads, which are autonomous and multidisciplinary teams of up to 9 members who are responsible for a customer related mission.
The coordination within a team happens with “chapters”, for instance, the data analytics chapter, customer journey mortgage chapters, and product management process chapters. Every chapter has a Chapter Lead who is in charge of it. The coordination between squads happens in tribes, these are collections of squads with interconnected missions, such as the security & private banking tribe, mortgage services tribe, etc.
The idea to use squads they got from Spotify. In fact, for inspiration they haven’t looked at other banks but looked at what digital innovations, like Google, Netflix, and Spotify are doing.
In December, they went to Spotify in Stockholm to learn more about how they work. Instead of the management or someone from the boards showing up, members from quad teams came.
When ING asked: “How much budget do you have? To whom do you report? How do you do X or Z?”, all they got back as an answer was: “It depends”. All the time!
They also had all these bold statements all over the walls such “Think Big or Go Home” and “Get the Shit Done”.
As the ING team was going back to Amsterdam, they were so impressed by this meeting, that they all wanted to work in the same way at ING. So they decided to copy the idea of Spotify, and they did it in six months.
They put about 3,000 IT and 1,500 business staff (product management, marketing, etc) together to form 350 squads. It took them two months to select 13 tribe leaders out of 80 applicants and after that Chapter Leads and squad members.
Payam compares the change in process that they have made to building a house. Before, they had all painters, all plumbers, and all carpenters coming together and isolatedly working on their task.
With the new system building a house only require one plumber, a painter, and a carpenter that get together on the site and get the job done.
What ING wanted to achieve with this new system of doing things is three-fold:
- Reduce costs – they managed to reduce the number of employees at the head office by 22 percent.
- Time to market – in the past they have done around three to four releases of a mobile banking app in a year. Now the squads have the power to choose what to do from the start to the end of the process.
- Becoming sexy – getting rid of the idea that working in a bank is boring and by doing that attracting the young talent out there. ING feels like they have become a lot more attractive not only to new talent, but also to other banks and companies who ask to come and see how they do it at ING.
Last but not least Payam share three tips to get this done:
- Communicate, communicate, communicate. If you have a communication budget then double it before you start. Only with communication you can attract and involve all the employees.
- Full commitment from the whole board. If the board doesn’t give full commitment, you are left with two options: you are simply stuck with how things are, or you have to wait until the person who doesn’t agree with you leaves.
- Do it fast. If you want to do a pilot first, don’t use it with the goal of showing how it will succeed – just use it for communication purposes.
Succeeding with a pilot is nearly impossible. It’s like deciding to standardize driving on the same side of the road, and England decides to first do a pilot and let truck drivers drive on the right side every Sunday – not going to work.