Lessons learned from a transformation: Bankwest
- 16 May, 2019 18:07
Bankwest's Andy Weir
A couple of years ago, Bankwest was faced with a challenge that would make or break its business. The Perth-based organisation – which has 1.1 million customers, half of which reside on the East Coast of Australia – discovered that although the rate of customer interactions was rising exponentially, the amount of revenue earned from these was falling.
This was a serious economic threat to its business model.
“As an executive team, we asked ourselves a fundamental question. Did we want to be a bank that did more things digitally to recognise changes [in the market] or did we want to become a digital organisation?” the bank’s chief information officer Andy Weir told attendees at the CIO Summit in Perth.
Bankwest chose the latter.
Taking inspiration from Spotify’s business model, the Bankwest dissolved its technology, products and distribution divisions and set up a ‘tribe, chapter and platform’ model. The five tribes are multi-disciplinary teams, focused on rapid feature delivery and made up of capabilities provided by chapters.
“They are organised day-to-day in a tribe that is focused on delivering outcomes for a specific group of customers. And importantly, everybody within that tribe – experts in their chosen fields – is measured, incentivised and motivated around a specific customer segment,” says Weir.
“Under this model, we have done five business cases in 12 months. Under the old model, we would have done about 50. Effectively, we set goals at a tribe level, allocate people to that tribe and it’s about to the tribe to make investment decisions. At the end of the day, they stand or fall based on their performance targets.”
This cuts out a great deal of bureaucracy, he says.
Each tribe also owns the systems that they operate which is a “beautifully self-reinforcing model,” he says.
“You no longer get a conflict between technology people saying, ‘that system is coming to end of life, you really need to start investing in a shiny, sexy widget.’ The reality is that people are only hurting themselves by not upgrading their systems or improving them. We also get end-to-end process ownership through the process.”
The tribes have to be self-sufficient for this model to work, says Weir.
If the tribe still has dependencies across the rest of the organisation then you are not really solving a lot of the organisational challenges,” he says.
To ensure this doesn’t happen, Bankwest is reengineering its technology stack to enable tribes to extract services from each of its platforms.
“So the only thing holding them back is literally the number of people they can get working on systems at any one time,” Weir adds.
Giving people a sense of purpose
The single most important factor in any transformation is that it has been focused around culture and this has nothing to do with technology, Weir says.
“When we thought about the cultural elements of this transformation we focused on purpose, autonomy, and mastery. If you give people a broader sense of purpose as to why they come to work, you will get higher levels of motivation."
Within BankWest’s tribe model, allocating people and aligning them with a group of customers and delivering is also fundamental, he adds.
The second element, autonomy, means pushing decision making down to the lowest levels of the organisation to enable people to control their own destiny, he says.
“They can make decisions day-to-day on about investments without going anywhere else within the organisation. That is incredibly empowering.”
The last element, mastery, means that people are more motivated when they are allowed to hone their skills and work consistently with the same group of people so they can get ‘slicker and slicker’ at what they do, he says.
What was done well
Bankwest’s speed to market has dropped dramatically and its frequency of deployment has “gone off the richter as well,” says Weir.
The bank’s level of resiliency has also gone up because tribes now own the systems and the IT group is getting a better proportion of spend which can be allocated to refreshing, upgrading and making these systems run quicker, Weir says.
The bank’s culture-shift has also been ‘top-down driven,’” he adds.
“The first thing our managing director did during this transformation was change the executive structure so there couldn’t be any executives working against the model we had created…everybody was personally invested in it.”
Weir said he is amused by organisations that create incubators or innovation labs on the side.
“I personally think that this is doomed to failure because the rest of the organisation frankly conspires to kill it,” he says.
The lessons learned
Bankwest initially announced the move to this new model in July 2017 and the implementation was completed in July last year.
Retrospectively, standing up five tribes (from none) and deploying 12 platforms took way too long, says Weir.
“The reason that we took such a long time was that was we absolutely wanted to do the right thing by our colleagues. We literally turned the organisation inside out, everybody’s role was changed in some way.
“From a HR perspective, there are a lot of important things you have to do to in terms of role classification and documentation and assessments. We went at everything 100 per cent.”
Initially, Weir and his colleagues across the organisation were “high fiving” for two or three months, celebrating their success in moving to a more agile model.
“Then the dawning realisation comes in, [with people asking], ‘my role has changed and what is going to be my role? Will I have a role?’” he says.
“Suddenly there’s a level of anxiety and uncertainty and people plunged into the depths of despair. So if we had our time over again, I would have done it in at least half the time and that would have caused other HR-related challenges but what this would have allowed us to do is rip off the plastic quicker and go forward.
“Interestingly, when we spoke to other organisations in financial services like ING, ABN Amro and Rabobank, they all said that they went really quick but they would go even quicker if they had their time over again. That was a really interesting lesson for us.”
The second lesson was that Bankwest didn’t put enough emphasis on process, says Weir. What is interesting, he says, is that when you clear away bureaucracy and simplify things and put them together, you really see ‘how shit your processes are very quickly.’
“That was an area that we didn’t really contemplate fixing up first. So from a DevOps perspective, we realised pretty quickly when we went live that we’ve got a lot of legacy processes. In fact, the key to our speed to market has not just been the automation, it’s been thinking about how we actually transform and simplify process as much as technology simplification,” says Weir.
Finally, although Bankwest dissolved its organisational silos, it still managed to create new ‘bubbles,’ he says.
“Suddenly, the tribes and some of the chapters because silos so in many respects, you need to be careful what you wish for. While we put a hell of a lot of effort into our organisational change management, we probably should have doubled [our efforts].
"In some respects, some of the leaders that we stuck with were actually never going to make the transition. What we have been doing subsequently is continuing to try and change those behaviours and processes. While this is exactly the right strategy for any organisation to think about it, it’s hands down the hardest thing I have ever done in my professional career.”
Follow Byron Connolly on Twitter: @ByronConnolly