‘We made a very simple decision’: Shayne Elliott
Chief executive explains restructuring of the bank's hierarchies and how the transition is proceeding as ANZ implements the “agile” operational strategies pioneered by businesses such as Google and Facebook.
ANZ is the first of the major banks to challenge its workforce to adopt the scaled agile methodology, with the overhaul starting in Australia and spreading to the New Zealand and Institutional businesses throughout 2018.
Speaking at a recent RFi Group / AB+F roundtable in Melbourne, Elliott said the concept was being embraced within the bank after an awkward start.
“The most Googled term the next day (after the announcement) was ‘agile’. It has become a trendy word and, actually, we’re not going to use that word internally. What we’re calling it is ‘a new way of working’, because agile has got these branded, defined things around it,” he said.
Elliott said it had become clear to him that the lender needed to reshape its strategy, rebalance the portfolio of businesses and exit non-core operations.
“Essentially, we made a very simple decision: the world’s going to get harder, so the only way to win is to pick a few things and do them really, really well. We just can’t afford to do too many things,” he said.
“We picked three: we want to be the best bank for people who want to buy and own a home; the best bank for people who want to start and run a small business; and the best bank for people who move goods and money around the region.
“We’ve got three businesses, that’s what we’re going to do, and everything else we need to get out of.”
Heart of agile
According to Elliott, the question then became: how are we going to win in those three areas?
“A lot of that is not because we have better products or cheaper products. It is about the better customer experience. So how do you improve the customer experience? Well your customers only experience two things with a bank: one is the people, the other one is the technology,” he said.
“So we’ve said we have to be really good at having those two things together. That’s why we’ve invested in some of the people we’ve done and some of the changes. The real way to win here ultimately boils down to speed, which is being really responsive to market changes.
“So when people want something different or when the market changes, you need the ability to respond quickly. Well, the only way you can do that is if you change the way you work.”
Elliott noted that banks work in the time-honoured tradition of the factory / production line, where “bits of paper get handed off around various departments, they go backwards and forwards multiple times, and it’s very sequentially done”.
Traditionally, you make this process faster by moving the paper faster but it’s ultimately still a sequential process.
“Essentially at the heart of agile is an idea that says, like we’ve all experienced when teams work well, is: clarity of purpose, right people in the room with the right tools, and we decide what needs to be done when,” said Elliott.
“So, we didn’t have it in mind when we set out on this, but it kind of fell into our lap a little bit. So while some of my peers are saying, ‘We’re already there’, with all due respect, they are not at the level we are talking about. We are talking about changing the entire company. We started with our Australian division, our biggest business, so it’s going to be massive.”
Turtle necks and jeans
While established businesses around the world and across a range of sectors are striving to emulate the speed, dynamism and customer centricity of digital players, Elliott also acknowledged the influence of ING. In 2015, the Dutch banking group embarked on a similar journey, shifting to an agile model that comprised 350 nine-person “squads” in 13 so-called tribes.
“I happen to be at ING two-and-a-half years ago by complete coincidence when I was running strategy as CFO. It just so happened, the day we were there, we met the team. That night was the big bag, final flip-over, where they implemented this across the Netherlands,” he said.
“They took us through their whole journey of how they did it. It was all interesting, and we’ve kept in touch and watched it. So that was sitting in the back of our minds.”
It also helped to have a head of technology in Gerard Florian who had not worked for a bank until joining ANZ in February.
“I thought it might be a good idea if he spent a bit of time going to see how other banks have dealt with a lot of the challenges. We went to see a whole bunch of banks in Europe, and one of them was ING. We went there to talk about core systems, and we ended up talking … about how agile had gone two years in, the transformation they had seen, and the essential triple payoff they had got, which was: speed to market, better customer engagement and better staff engagement,” said Elliott.
“So we saw this, and it essentially clicked. We’ve been looking for something to bring what we had in mind together and this was it. I think a lot people think it’s a bunch of people running around in turtle necks and jeans. Actually no it’s not. It’s incredibly disciplined, in a different way. It’s actually more accountable, shorter sharper deadlines, more focused on delivery and customer outcomes, but managed in a different way.
“It’s not a big bang; we’ll slowly introduce this across the country we think early next year, around February. We’ve reached the tipping point where we’re kind of there for Australia.”