Agility: Hype? Nice-to-have? Or much more?
One of the biggest misunderstandings in the finance sector
Agility: The key to success in stormy times
It has been stormy times of late for banks and financial service providers. In the past, it often took more than a year for a new product to be developed, tested and launched on the market. Today, in less than a year, completely new banks will emerge, radically adapting to changing customer needs and competing with established players. Companies can look on this with regret—or see it as an opportunity. In stormy times, financial service providers can quickly find themselves in dangerous waters, but can also pick up speed very quickly.
In other words, the market environment is more volatile than ever before. It changes quickly, often and profoundly. New storms can come up suddenly, throwing everything into chaos and disarray. Uncertainty and complexity are increasing continuously. At the same time, the information on which decisions are based is often ambiguous—or even contradictory
“The world around us is changing dramatically, rapidly and radically. Agility is more than just an option—it’s a skill essential for survival.”
Martin Fürst, Senior Manager
What does it take to succeed in a market environment like this? The key is agility. Admittedly, the term is currently on everyone’s lips, and it is often unclear what it means exactly. As a result, associations with—and expectations of—agility are also not clearly defined.
For zeb, agility means the ability of individuals, teams and organizations to act quickly, flexibly and in a customer-centric manner. This ability is associated with typical characteristics of agility: Agile companies put their focus on the customer and consistently integrate the customer into the development of products. Agile companies generate results in short cycles and form cross-functional teams in which employees can act independently within set guidelines. To this end, managers give up power and responsibility, and employees say goodbye to established routines and processes.
Like any ability, agility must be learned. This is a challenge—for several years. But it's worth it, as one of our clients, Peter Klett, Chairman of the Board at Weser-Elbe Sparkasse, explains in an exclusive interview on transforming the savings bank into an agile organization.
We are convinced that an agile company will have the adaptability to adjust to stormy times and make the right decisions. Everyone else, in the medium term, runs the risk of drowning. The results of our European Banking Study this year are an indication of this. Those banks that we identified as digital pioneers in the study were able to increase their operating profit by an average of 5.1 percent between 2013 and 2018. The results for the less digitalized banks—the “Challenger” and “Follower”—fell by 10.1 percent and 9.6 percent, respectively. A closer look at the digital pioneers shows that all of them are also leaders when it comes to agility. No wonder—without agility, they would not have been able to implement digitalization so successfully and in such a targeted manner.
But where does the entire industry stand? For our Agile Readiness Study we interviewed 216 employees of financial service providers. The good news is that many companies have long since recognized the importance of agility. The bad news is that implementation is often still lacking. The interviewees attest that their own organizations have major deficits.
P.S. You can still check your status via our Agile Readiness Check-up here.
“To bring about sustainable change, all dimensions of agility must interact. It is not enough to adapt only individual components.”
Dr. Sophie Strelczyk, Manager
The diamond: The formative dimensions of agility
Agility is multidimensional. It’s of little use if the management wants it, but the employees don’t. Agile management methods do not achieve much within hierarchical structures. Flexible project teams are possible only if the work environment and IT architecture are adapted. Everything is interconnected.
To structure the challenges and translate them into recommendations for action, we have developed a “diamond of agility” based on our consulting practice:
Agility is not a fad that will soon be replaced by a new management method. In a rapidly and radically changing world, high adaptation speed, flexibility and customer-centricity are not a nice-to-have, but rather a matter of survival. Read our latest interview with our expert Martin Kulik on the subject: "How do companies need to change in order to be successful in digital transformation?"
Our Agile Readiness Study shows that financial service providers are still at the very beginning of a profound transformation. Although they have recognized the signs of the times, they still show considerable deficits in all dimensions of agility. Hierarchical structures and processes continue to dominate their organizations.
“When it comes to transformation, every organization must find its own path. The more radical the path, the more important the unrestricted commitment of the leadership becomes.”
Mathias Gans, Senior Manager
That’s why it’s high time to act. Our projects prove that change can succeed—carefully and step by step, or holistically and as quickly as possible. Start your journey to becoming an agile company—and the sooner, the better.