Global business Agility report: ING 19 January 2022 102

Stefaan Stroo, Global HR Transformation Manager at ING, reflects on the whole mindset change that has spurred the Dutch banking giant to impressive results. 

As financial institutions recognize the need to respond faster to changing customer habits, they have turned to Agile. An Agile way of working equips employees and teams with the methods and processes to fail fast, learn, and bring solutions to the market quicker. For this report and series of interviews, we collaborated with ADAPTOVATE, a leading global transformation consultancy. We spoke with transformation leaders from institutions all over the world. We asked them to describe their successes and challenges in adopting Agile. 

What does the term "Agility" mean at your institution? Does it correspond to a specific function and responsibility or is it a cross-cutting philosophy that structures the transformation of your organization? If the latter, who is ultimately responsible? 

I would say first of all, it’s the latter. We have three different ways of looking at Agile. There is the Agile mindset, the Agile organizational structure, and the Agile processes. At ING, we try to do all three of them, but not across the whole organization. We split up the organization in different parts and some really transformed into an Agile organizational design. The full organization follows certain Agile processes and principles like our quarterly business review and quarterly performance reviews. Then within every department, there is a toolbox that people can choose from based on what they do. So, we have one Agile way of working philosophy across the organization. But then when we put it into pracice, it depends on the type of role and function. 

I think also in terms of lessons learned and it's also the advice we give to to every organization: It's really important to reflect on what do you want to achieve because it's quite easy to say from now on, Let's do a stand up every morning. Let's use Post-its, fine, but how will it help you? What will you achieve by it? So for us, I think the main driver was really our mindset and what we wanted to do and the other slightly odd things are just supporting levers in furthering that mindset.

In your quest for greater agility, which areas are most likely to be transformed? Which areas, on the other hand, do not require immediate transformation, either because they are already "Agile" or because they do not need to be transformed?

The main focus was the delivery organization. We brought business and IT together to reduce our delivery time to market, because in an organization the size of ING, you have so many hurdles. The challenge was to reduce the number of hurdles without compromising on risk and regulatory. To put it into perspective, and this is what banks have been saying since 2010, our biggest competitors are not other banks but are the Googles and Apples, if they decide to enter the banking world. They could eat us alive because they are going to be faster. They have more money so they can do it. I think the only thing holding them back is that the ROI would not be that high and there are a lot of regulatory concerns. But we still have to be ready when these types of competitors are nearby who are not bound by legacy systems. 

Another good thing was how we merged our sales and back office teams into customer loyalty teams. We brought those together so that our call center is where the problem gets solved. You don't just have people making a ticket and then sending it backwards. You have teams there who actually do it together. When you get in touch with the bank, you actually interact with people who can help you. 

In terms of less important, I think about HR, which is my domain. I don't necessarily see a lot of added value except for the mindset change and helping the businesses be successful in implementing additional Agile processes. It works more as a support function.

Among your Agile transformation projects, which ones have been or remain the most difficult to lead? What was the difficulty and what has finally enabled success on these projects? 

I think the biggest challenge during and after any Agile implementation is the mindset of management or senior management because it requires letting go. The whole idea is you trust your teams. You want them to make decisions. But trust isn't built over night and trust also means that people can fail. You have to overcome that. It is difficult for management and also difficult for the employees who are actually allowed to fail. There's a difference between me telling you “It's okay for you to fail” but then, depending on how big the failure is, that's where you could lose your job. 

This shift in thinking is so difficult because restructuring and redesigning teams may be a little complex, but you can make it work eventually. Changing the mindset and really empowering people and teams remains the most challenging aspect of Agile. 

Where we have overcome that challenge is when senior management really walk the walk and talk the talk. Over time, the ability to adapt, adjust, and accept that mistakes will be made has been critical. Where we have had trouble is when management still wants to be in control. I don't want to judge. I'm not saying that the managers are wrong, but for me that's the most critical part. Can you truly adapt your mindset as a senior manager?

How would you describe the benefits of increased agility? Have you been able to measure them? Can you share some figures on how you are able to capture benefits?

It is difficult to capitalize in terms of how many billions of euros we have saved or spent, but most importantly we wanted to reduce time to market for new products and services. That's difficult to measure because every time it's a new product and you don’t have a benchmark. But the impression is that it has improved. Now when we start something, we deliver something.

Customer satisfaction was also important for us. In almost all of our key markets we see an improvement in customer satisfaction. Is it fully linked to Agile? There may be other factors in play but we do see improvement there and that’s important. In terms of employee engagement, when a team has shifted to Agile, we do see an increase across employee satisfaction metrics. 

Overall for the bank, our cost to income ratio has gone down. That was not the main reason for Agile, but as a traditional bank, our cost income ratio wasn't the best in class, but it's really improving because Agile does have a cost impact given you need less management layers and the side effects that come with that. It's not the reason we did it, but it had an impact, particularly in our larger markets where we did get rid of certain management layers. 

In terms of agility, could you provide one or two examples of successful collaborations between departments in your institution, or between your institution and external service providers?

It’s a bit difficult because the whole idea of Agile was to actually bring break down the barriers between departments, for instance operations, IT, and sales. With our Agile transformation, we brought specialists together into one team. They would then work and build something together. I would say that was the biggest success in the retail business.

What organization and incentives have you put in place internally to ensure the success of agility-related projects? Which of these were the most successful?

Our transformation was led from a center of expertise. It was not part of HR, it wasn’t an independent organization. It was steered directly from the CEO who formed an Agile team that led the transformation and worked with each part of the organization to identify what made sense for them. 

One big factor is that our senior management and CEO were very clear from the start. They mentioned Agile in everything, clearly communicating that this is the only way we could go. It became part of our DNA. Let’s assume you worked in the Philippines and maybe weren’t a focus area yet. You still knew that ING was going to be Agile and it would soon be your turn. 

I think that was really important in terms of mindset. If people didn’t buy in, that’s okay. We would shake hands, but we had to go our separate ways. There was no in between. We clearly communicated that to everyone in the organization. The organizational redesign was very effective because we knew we had people that bought in to what we were building and had the right mindset. 

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