How transformation leads can lean into the complexity of financial services to unlock agility at scale
Stacy Lamb, Financial Services Organisational Agility Expert at PA Consulting
Claudia Pellegrino, PA Business Design Expert at PA Consulting
Financial services firms are key to helping people across society prosper in an uncertain world. When we surveyed 500 leaders from some of the world's largest organisations, we found that top financial performers are 30 per cent more likely to display agile characteristics. But they must also operate in a complex environment that can feel at odds with these characteristics and leaders often feel under ever-growing pressure to navigate this complexity. Complexity comes not only from external regulatory requirements and changing customer expectations, but also from internal hierarchies and structures. Such factors make delivering value at pace uniquely challenging for transformation leaders within large financial services firms.
From helping accelerate the speed of release for projects by 20 per cent for an asset manager, setting up 15 organisational value streams for a leading global bank and helping to align business, change and technology employees for an international insurer – at PA, we’ve seen the opportunity to positively embed agility at scale.
Leaning into the challenges and focusing on creating long-lasting cultural change is key for leaders to overcome the barriers. In our experience, there are three core principles to achieving this:
1. Find a strong sponsor for agile maturity
For transformation leaders, the sense of ‘fighting’ alone against senior stakeholders, each with a different vision of change, is common. Having an executive sponsor for your agile transformation to challenge these hierarchies and divisions, and champion the change, can make a dramatic difference in unlocking the long-lasting cultural change necessary to succeed.
To choose the right sponsor, look for someone who:
- is a senior member of the executive team with a direct role within the transformation
- people respect for their intellectual understanding of change
- will actively promote the organisational agility vision
- champions collaboration, understanding the need to remove barriers and empower teams to deliver.
To make executive sponsorship effective, it’s important to establish a level of trust and respect and recognise the vision and strategic priorities of the sponsor. For example, at PA we are fortunate to have partnered with a number of highly engaged thought leaders within their organisations. We are currently working with an international bank where getting senior buy-in has been one of the key success factors to landing and embedding the organisational change. This is because it allowed us to navigate the internal politics and challenges thanks to the clear mandate received and credibility. It also ensured that middle management’s agenda was aligned to the one of the sponsor, which made cascading the change and the set up of consistent value streams across the organisations achievable.
In our experience, the most successful leaders, are those who are committed to changing the culture of their organisation – we have seen that inclusive leaders are those who create the right environment for their diverse individuals to thrive in, an element which is crucial to land long-lasting change. Engaging the right person will ensure transformation teams don’t get stuck fighting the traditional hierarchies. It will open roads towards enhanced agile maturity and will promote the credibility of the transformation.
2. Define your transformation vision to guide, drive and cascade change
A successful agile transformation depends on a clear vision of the required cultural shift, target operating model and route to success. Such a vision provides clarity over the desired outcomes and the consistency needed to scale, and allows teams the autonomy to deliver.
It’s critical to co-create the vision with executive leadership, using working groups or other collaborative approaches. This is particularly important in the context of large financial services organisations where it can be challenging to align the vast landscape of senior leaders behind a united definition of transformation.
Be careful not to confuse your vision by adopting frameworks that don’t align with it. You can gain clarity over how to move forward and accelerate delivery by adopting pre-existing frameworks, but the link to your organisation’s needs must be clear. So, it’s often best to blend existing standard approaches with bespoke delivery methods.
In a well-known large, international bank which is making wide-ranging improvements in organisational agility, the changes being made are all underpinned by and aligned explicitly to PA's five core dimensions of organisational agility, with each of these giving rise to a more specific set of design principles and practices. These were agreed by a cross-functional working group that was sponsored by the COO, which meant that the transformation leadership proceeded with a set of core and common beliefs, applicable to both Business and Technology.
3. Expect complexity, and organise your team to navigate it
Experience with large, complex agile transformations has taught us how important it is to set up your transformation team with the right behaviours and ways of working. In practical terms, this means ensuring the transformation teams work in the agile way they’re advocating in the rest of the organisation. The team should deliver iteratively, pivoting easily to address external challenges and blockers while showing progress and continuously improving. And there should be empowered owners for key transformation initiatives who can prioritise effectively and take responsibility for decision making.
This style of working can be hard within FS firms as there are often conflicting priorities, resistance to change and a general fear of the unknown. Organising the transformation team around the ‘value’ that the transformation is bringing can help, for example, delivering better products more quickly. Organising your transformation team to operate in an agile way shows the wider organisation it can be done. This helps humanise the change and make it part of the organisation, which begins to nudge the required culture change and removes some of the fear of change.
At a large global bank, they needed to deliver value more quickly to remain competitive in the market, so we set the transformation up in an agile way to show how this works in practice. We centrally designed the change as well as embedding it through teams on the ground. We set this up by creating agile teams that centred around the design elements of the transformation as well as around the different ‘value-pieces’ that the design was delivering (e.g a new governance approach, new tools, new ways of working). To support this setup, we operated in the way we were advocating – working as one transformation team, running to the same sprint cadence and ensuring dependencies and priorities were highlighted ahead of time. We had clear accountability of ownership across the teams and we worked collaboratively, using tooling to support delivery and ultimately this allowed us to deliver transformation outcomes more frequently.
Financial services can embrace organisational agility
The financial services sector is growing and changing at an unprecedented speed. In a recent poll, a huge 66% of respondents reported that they expect some prominent organisations to fail because they are unable to keep up with the pace of change. Transformation leads must treat the shift as a long-term journey, with a clearly defined vision and purpose, so they can set up the organisation for continuous improvement.
The Institute would like to Congratulate Stacy Lamb on her recent shortlisted nomination for a Rising Star Award.
To vote for Stacy visit here