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Agility: Taking the wrong approach could lead to internal rifts

By radically transforming the organization, institutions intend to become quicker, more dynamic and future-proof. 

  • But not every approach achieves these goals
  • What proceeds is that every institution finds its own way
  • And matters step by step 

A narrow window of opportunity

The time available for companies to gain a position on the market is called the window of opportunity. This time frame is becoming shorter and shorter: it took 70 years before the market for televisions was saturated. The window of opportunity closed in less than ten years for the smartphone. Companies that do not respond quickly and flexibly to new customer wishes will watch the window close in their face. But do savings banks now also need to organize themselves into agile teams and sprints like the Spotifys and Googles of the world? When even the successful bank ING-DiBa is set up in squads, tribes and chapters rather than divisions and departments, should savings banks do the same?

To answer this question, we need to know the four key elements of an agile organization. Agility is more than just agile work, which is already fairly widespread; it also involves agile organization and agile strategy. And banks need to understand what happens when they don’t approach agility full on. But first of all, here are the four core elements:

The four elements of agile organization

Customer-centricity comes first and foremost: everything that you do or offer is oriented to customer needs. Many customer advisors will insist that they always do. “We always ask ourselves how we can optimally offer our product to customers.” But therein lies the first misconception: customers are not interested in savings bank products by default. Only through talking to customers can you find out what they want. That works best outdoors on the street. In our projects, we go out with advisors and overcome the fear of the unknown—and we often gain surprising insights. 

These findings are then implemented as quickly as possible. We then arrive at the second core element: flexible structures with a high degree of autonomy. Self-organized, interdisciplinary teams work together on an equal footing, free from power struggles, without killer sentences like “It’s always been done that way” and in short, intensive project phases called Sprints. This avoids slow decision-making processes, which are mainly there to protect employees from making poor decisions so that they only take on as little responsibility as possible. Instead, employees organize themselves and make decisions in small teams. Leadership still exists—but the leadership tasks are temporary and spread across various functions.

This requires a new mindset for all stakeholders. And that is the third core element of an agile organization.  Independence, dedication, enjoyment found in working in a team and a focus on the subject and solutions—it may sound obvious, but these are the most difficult parts of your path to agile organization. Who in their right mind would give up their privileges, status symbols, membership in executive meetings or their say in annual strategic planning? And who would happily take on responsibility for topics which have previously been comfortably delegated upwards? 

In the end, agile organization represents a threat to long-established but hindering routines and privileges. But it is a liberation for anyone looking for fulfillment in their work or who doesn’t want to waste their time in tedious meetings and long coordination processes. Purpose is the fourth core element of agile organization.

Agile, but careful

If you want agility in collaboration, organizational structure and strategic orientation, there are three paths. In the “tinkerer’s garage” model, digital pioneers are given free rein in an “innovation lab” or a “digi lab”; they develop new products and services for savings banks. Sounds exciting for getting going, but too exclusive in the long run. In the “internal division” model, a mostly related department is separated from the traditionally working part. This model hopes that the agile part grows over time and the other part shrinks thanks to automation and digitalization. Alas, it often leads to trench warfare between the “agile forward-looking agile bank” and the “hierarchical bank”. That cannot be the aim.

We recommend the third path: “agile, but careful”. Rather than aggressively turning the organization on its head, changes are introduced incrementally: they are tested and fine-tuned. It is a learning process. All employees are responsible together for facilitating success and identifying problems early on.

Agility diamond

The overarching purpose of the organization is always in focus: “the reason why”. The view of people is characterized by trust in employee skills, a positive feedback culture, further development options and an incentive system that looks at team work. The changed understanding of leadership is shown in trust, which replaces control, or the new role of executives as coaches and mentors and also the consistent self-organization and decision-making power in teams. The organizational structure allows flexible structures and employee allocations, consists of mostly interdisciplinary teams following agile methods. This kind of organization can only function when a modular, continually developed IT supports the work processes and the workspace promotes collaboration and concentration for largely autonomous team work.


 

“Just like any skill, agility must be learned.”

Dr. Markus Thiesmeyer, Managing Director

Admittedly, the term agility is currently on everyone’s lips. But the idea behind it is vital for the survival of financial services providers.

Agility is not a trend that will soon be replaced by a new management method: the ability to adapt and innovate will always remain crucial. Savings banks that rely on strong ties to their workforce and customer loyalty have the ideal prerequisites for agile cooperation. You will be amazed at how much latent potential your team has!