Global business Agility report: TBC Bank 09 December 2021

Inga Kelauradze, Agile Transformation Lead at TBC Bank, talks about what they experienced in their holistic Agile transformation in Georgia. 

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.

Why did TBC decide on an Agile transformation? 

It is always crucial for large-scale organizations to properly understand the needs of an Agile transformation. This should not be a decision made under the influence of trends, but understood as the best opportunity to achieve the strategy and goals of the organization. In this case, the key to success is a holistic approach, when the transformation involves the most important sections of the company: structure, people, culture, processes, technology.

In our case, we had to change the way the bank operated and evolve into a digital innovator. In order to do this, we opted for an Agile transformation. So, what did we expect to gain from our Agile transformation?

· Improvement of the customer centric approach. We transformed from a product-centric organization into an organization where customer interests and needs are of primary importance, where we better understand what our customers need and can provide the best products and services.

· Less bureaucracy, more agility. Due to the scale of the organization, cooperation between the divisions and the departments was quite rough, we definitely wanted to reduce bureaucracy and to move from a multi-hierarchical silo structure to a cross-functional Agile structure, which would facilitate reduction of bureaucracy and accelerate the decision-making process. Therefore, instead of multi-hierarchical divisions, there are now 12 tribes, consisting of more than 92 chapters and more than 157 cross-functional teams.

· Improve TTM. High competition in the market and the desire to provide customers with the best products and services in a timely manner made us think about improvement of our time to market (TTM). This is one of the important benefits to be achieved in an Agile transformation. Frequency of introduction of releases and TTM for inhouse systems and even vendors are improved by 2-3 times over a year and a half. TTM improvement has even been reflected in changes introduced. On average, more than 2,000 epic and user stories are introduced per quarter for customers, which is twice the rate of the period before Agile. Of course much important is the value, which was created during this period with new products and features, with the digitalization strategy and IT transformation. Agile helps us to change our mindset from the backlog driven approach to the business value culture, always asking why we are doing something  and what will be the real value for our customers, accordingly we introduced OKR frame for better understanding and measuring the value.

· Employee Happiness. Employees have always been a very important part of our organization and we realize that the success of the company depends directly on their happiness and their contribution in creation of the value. With Agile transformation, we think that their opportunity for development, independence, and responsibility dramatically increases. Additionally, their contribution to the strategy of the company becomes more obvious, which will increase their happiness and ownership on the business results even more. After one year of Agile transformation, our employee high happiness rate increased by 16%.

· Talent attraction. Nowadays it has become very difficult for traditional companies to make the new generation interested in the working environment. Development of technologies and competencies has greatly expanded the frontiers for young and talented people and opened many opportunities. The free, exciting, and evolving environment created by Agile transformation will make the TBC team even more attractive to young and talented people. 

What was the scope of Agile transformation and in what areas does this process continue?

The first stage of the Agile transformation basically covered the business segments and IT areas. We covered the retail, MSME, and IT sections of the organization in full. Of course, there were a lot of difficulties at first. Most people were skeptical about working in cross-functional teams compared to competent groups i.e. traditional departments.

AGILE ENABLES US TO KEEP THE COMPANY ENTREPRENEURIAL AND ADAPTIVE. Consequently, our Agile transformation had its objectives. The way we would evaluate and measure its success was determined in advance.

After summarizing the results of the first stage, it became obvious that we had to continue on this path and soon we added three new directions in the Agile world: a new Risk tribe, a CIB tribe, and a Financial Analysis Expertise Center were created.

Accelerated development and frequent changes required a proper response on the part of operational management of services as well. That is why we soon decided to continue Agile transformation in operations management in the back office.

This is the first case in the region where operations are managed through an Agile approach, taking Agile principles and values into account.

What does Agile mean in operations?

· Switching focus from ticket management to customer needs 

· Small E2E customer loyalty teams

· Increased delegations on team members 

· Automation and digitalization of processes 

According to our predefined KPIs, the first results in operations after the Agile transformation were very impressive:

As a result, more than 300 people from the back office have become part of the Agile structure, where small, cross-functional customer loyalty teams will care for customer satisfaction and introduce a high standard of service.

What have you learned on the path of transformation and what challenges did you have to cope with?

Leadership involvement: Changes of this scale inevitably start at the top, where unity and high involvement of management is crucially important. Leadership must explain the strategy and importance of agility. They must also be an example. We soon created a “Management Squad”, where the open and painful issues provided by the teams became our backlog. We continue working in this format and try to use Agile ceremonies here as well.

Stop perfecting, start doing: The second important moment during our Agile transformation was deciding as soon as possible when to start and not wait for the ideal moment. You are never 100% ready for change. Of course, we were not ready in all directions. However, we figured we should definitely start trying things in the real world in order to better understand what kind of changes were needed and not waste our time on theoretical discussions. We started with 8 tribes. We now have 13 tribes. We started with 386 employees. We now have more than 1000 employees united in our Agile structure now.

Freedom of Choice: Freedom of choice is also of utmost importance, which was one of the main messages for our employees during the Agile transformation, when no one automatically moved to a new position relevant to the old one. It was not easy decision to announce open selection process for all employees (IT and business segments more than 350 people) without any guarantees to get the job again. We organized 2 days Job Fair event giving most important information about new tribes, squads, chapters and business strategies, Tribe leads tried to sell their vacant positions as an most interesting and important place in the bank. Finally we gave to the employees the right to choose the direction towards which they wanted to develop. With this option after endless interviews during 2 weeks, assessing the employees from the new agile perspective, 30% of employees changed direction and started working in a different area.

Of course, the journey of Agile transformation is not easy. We faced challenges that are still with us today. However, they are on the surface and we know how to improve:

· Transparency and clarity in distribution of responsibilities

· Balance between autonomy and alignment 

· Dependency management 

· Lack of automated processes in the development 

How do you improve the operating model in Agile organizations?

The main difficulties occur between finishing the design phase and starting the execution. There is a very high risk of a chaotic reality instead of the beauty depicted from the slides of E2E teams. What helps TBC manage and improve working processes in an Agile organization?

· Very strong internal CoE of Agile coaches 

· Actively listen to the people and adjust if needed – we introduced weekly Friday meetings with CEO, as an opportunity to communicate most important messages related to the agile, openly discuss and get feedback from the employees about challenges and difficulties. 

· An agile health check process. This self-assessment of Agile teams together with an Agile coach helps us understand what kind of challenges they are facing and how we should improve. We discuss Agile health check results together with management and agree on an action plan for development

· Creating transparency on results, strategy, and unresolved dependencies with the QBR process 

· Implement OKR framework and switch the company from a backlog-driven culture to a value-driven organization

BECOMING AGILE IS AN ONGOING JOURNEY AND YOU ARE CONSTANTLY LEARNING ALONG THE WAY. In order to summarize what Agile is for us, first and foremost it means a happy employee. An unconditional key to the company’s success is uninterrupted communication and connection between employees and management, which ensures convergence of visions and improves perception of reality.

However, everything is ahead of us and we expect even better results. It is very important to be able to accurately respond to the needs of our customers with small increments, innovative approaches, and the courage to not be afraid of mistakes. 

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