THE AGILE COMPANY - Agilia Conference€¦ · THE AGILE COMPANY We claim that there are better ways...
Transcript of THE AGILE COMPANY - Agilia Conference€¦ · THE AGILE COMPANY We claim that there are better ways...
THE AGILE COMPANYL E S S O N S F RO M BA N K I N G
Lennart Francke
Göran Nilsson
PRAGUE IN AUGUST 1990
PRAGUE IN AUGUST 1990
P R AG U E I N AU G U S T 1 9 9 0T H E S TAT E OW N E D R E S TAU R A N T S
The small private restaurants were always full. What remained was the
huge state owned ones where we met:
v Waiter – Middle-aged man
v Waitress 1 – Middle-aged woman
v Waitress 2 – Young woman
STOCK HOLM 2016N ORD EA BAN K
v Increased digitalisation• Fewer visits to branches• Fewer branches to visit• More digital branches
v From a personal bank man (PBM) to a “team”• A team of different competencies• You now may talk to anyone in the team or even someone from
another department, depending on your question
STOCK HOLM 2016THE N ORD EA CUSTOM ER
v A customer (C) wants to increase his mortgage loan to buy a car:• C tries to call the PBM but is directed to customer service (CS)• CS cannot help C but says the PBM will call C• PBM calls to say that C cannot increase his mortgage more and
instead recommends a private loan• PBM does no longer handle private loans and asks C to call CS• C calls CS in order to make an application for a private loan
M ANIFESTO FOR THE AG ILE COM PAN Y
We claim that there are better ways to manage organizations acting in a dynamic and uncertain environment, especially if they have highly
qualified and competent employees. We value:
v Focus on customers over owners
v Intrinsic motivation over extrinsic rewards
v Trust over detailed monitoring
v Adaptability over formal planningWhile there is value in the items on the right, over-use of them often
hamper agility. We thus value the items on the left higher.
FOCUS ON CUSTOM ERS
Being a truly customer driven bank means:
v Building long-term relationships with customers
v Occasionally sacrificing short term profitability to satisfy important customer needs
v Restricting product managers’ sales activities
v Avoiding product sales targets
IN TRIN SIC M OTIVATION
Cash bonuses work well with simplistic and repetitive tasks, of which there are several in large banks, i.e. trading and securities sales.
But they don’t go well with:
v Fostering long-term relationshipsv Strategic decision-making
v Risk taking
Intrinsic motivation comes from working with autonomy, pursuing mastery, and sympathising with the firm’s purpose.
TRU ST… AN D M ON ITORIN G
High quality standards are particularly important in sensitive industries, such as finance, social welfare and healthcare. Increased
regulation has to be combined with decentralization.
Three lines of defence:
v First line: management controls and internal control measuresv Second line: Risk Management & Compliance
v Third line: Internal & External Audit
Focus on First line.
ADAPTABILITY
Budgeting and/or rolling forecasts are costly, time-consuming, include gaming, decrease focus on actual facts and competition, and hamper
flexibility.Business people can commit to satisfying customers or to follow a
plan. But not both at the same time.
v Relative targets
v Activity planning
v Trustworthy financial reporting
v Internal market for transfer prices – making the dog wag the tail
THE AG ILE BAN K