Agile Should No Longer Be a Stretch

Bob Marley once said, “You never know how strong you are until being strong is the only choice you have.” This message from the legendary reggae artist rings especially true during these times of crisis and uncertainty.

The coronavirus crisis has forced the entire world into crisis mode and the financial services industry is no exception. While the industry has shown great resilience in dealing with the crisis, firms whose strengths lie in their ability to adapt quickly to changing and disrupted business environments are the ones faring best and delivering the most value to their clients.

Financial services firms that have relied heavily on their agile management principles and practices—from Fintech companies to traditional global institutions—appear to be navigating this crisis far better than their competitors and will, presumably, reap the benefits long after the crisis is over.

Agile management, and its associated principles, is an operating model that enables firms to quickly change tact in step with rapidly changing or unexpected circumstances. Agile management is the opposite of a traditional, siloed, and hierarchical management, where major decisions are made by senior leadership in a closed room and are passed down through the organization to the people tasked with implementing the decisions.

Agile management is all about empowering small multi-disciplinary teams/groups of people with diverse skill sets, allowing them to collaborate in solving complex, often unfamiliar problems where the ability to respond in a timely manner is critical for the success of the initiative. Up until the last 10 years, agile management was seen as a set of project management practices primarily used in software development.

You’ve probably heard your IT colleagues use agile project management terms such as Scrum and Kanban. By its definition alone you would assume many firms would have embraced agile management by now but surprisingly, this is not the case. Surveys conducted in 2018 by Deloitte and McKinsey show that more than 90% of CEOs interviewed aspired to business agility, yet less than 10% had actually accomplished it.

During the coronavirus crisis we have seen examples across both public and private sectors of agile management in practice, from the construction of a 1,000-bed coronavirus Wuhan hospital in just 10 days to the vacuum company Dyson restructuring their manufacturing plant to produce portable ventilators for coronavirus patients in a matter of two weeks.

The ad ran on more than a dozen TV networks including ABC, CBS, CNBC, and ESPN with very positive results. Both the Chime and JP Morgan examples show that an agile approach can be highly effective especially when timing is everything.

So why did it take a pandemic to wake financial services firms up to becoming more agile? Well, many might say technology is the key to a firm’s ability to be agile. However, the technology used by such firms to rapidly pivot their business operations and practices (some better than others) during the crisis has been around for years. So perhaps the answer lies in the mindset of the c-suite.

In KPMG’s 2019 Global CEO Outlook Survey, 67% of CEOs surveyed agreed with the statement “acting with agility is the new currency of business; if we’re too slow we will be bankrupt.”

As stated at the outset here: when you only have one choice, it’s amazing how quickly you make that choice your reality. Coronavirus hit the business world so fast and with such great impact that the c-suite did not have the time to schedule their traditional offsite retreats or hold endless meetings about how best to address the situation.

Financial services firms—generally known as pillars of the ‘top-down’ control model and widely acknowledged as stiff, arthritic organizations—needed to adapt quickly to a completely unknown business environment or face huge losses and, in the most extreme cases, their own demise. This required firms to take the decision-making authority out of the hands of senior leadership and empower small, agile, and cross-functional teams to develop the necessary solutions, to test them, and then take what they learned and feed it back across departments, though not necessarily upwards, before applying solutions.

The firms that have been able to hyper-focus their efforts around customer needs, put decision making in the hands of the people closest to the issue, build an environment that fosters cross-departmental collaboration, and are comfortable with “test and learn” implementations are also the firms that have handled the crisis better. These firms have established a new way of operating, not only during this crisis but also longer-term and probably through future shock waves.

It’s not only a huge leap for senior leadership to relinquish control to the “do-ers,” but absolutely critical if financial services firms are to embrace agile management, both as a business strategy and an operating practice. There is no longer any doubt that these companies need to embrace the new world order, learn to adapt quickly to new demands, and vastly different competitive environments.

Flattening the corporate hierarchy may well join the flattening of the curve.

When the waves of this particular crisis calm to ripples and people are able to return to working at their offices, agile practices will see a huge boost. Teams that naturally flowed together to 'get stuff done' during lockdown will be able to meet in the same room around the same whiteboard, continuing to enhance this environment of collaboration, innovation, and forward-momentum at all levels within the organization. Flattening the corporate hierarchy may well join the flattening of the curve.

It is clear today that CEOs recognize the importance of agile management as a key driver to their firms’ future success and survival. In KPMG’s 2019 Global CEO Outlook Survey, 67% of CEOs (up from 59% in 2018) surveyed agreed with the statement “acting with agility is the new currency of business; if we’re too slow we will be bankrupt.”

But let’s throw a bucket of cold reality water on this and acknowledge that implementing agile strategies and practices is not easy, particularly when a firm has operated in a top-down, clunky, and bureaucratic mode for many years. However, history is likely to show that doing the work to become agile pays off in the end.

The article “Agile at Scale” from the Harvard Business Review May–June 2018 issue and the book The Agile Enterprise: Building and Running Agile Organizations, by Mario E. Moreira, are great resources to learn how to implement agile management throughout your firm.

As you start to implement agile management you will encounter naysayers asking why are we doing this? What is the bottom line? The result? Well, it will actually be the bottom line. Along the way, firms will create greater meaning for their employees and real value for their clients. Win. Win.

Craig Welch, Partner
craig@blackmosspartners.com