The Inconvenient Truth About Agile

07 May 2019

It’s rare you hear senior execs admit — or almost admit — they’ve made a mistake; witness the not so straight talking from many of the banking sector CEO’s during the Haynes Royal Commission. But stand up Shayne Elliott. His honesty, pragmatism and self-effacing candor must be recognised and applauded. Not just in front of the industry’s equivalent of the Spanish Inquisition, but also ANZ’s shareholders and customers.

The N-WOW Factor

Two years ago ANZ Bank embarked on the most radical and transformative business change ever undertaken in a large corporate in Australia. The resulting transformation programme was described as New Ways of Working (NWOW). With this funky acronym, Shayne and his new Agile guru Maile Carnegie set out their vision to de-construct the bank, simplifying products and processes, destroying fiefdoms, flattening silos and adopting ‘agile working practices’ throughout the ANZ Bank organisation. Ultimately it was all about delivering improved customer experience, heading off the disrupters and neo-banks and streamlining the monoliths that had taken root in the organisation over the past three decades.

What did this entail? Well, at an individual level it meant staff needed to reapply for their job — via a video. Working in ‘tribes’ made up of cross-functional teams. Hold daily ‘stand up’ meetings to agree on what will be delivered individually and collectively each day. Work in close proximity to users and be prepared to share your innermost thoughts regarding the performance of your team on a regular basis. It was confronting, but at the same time liberating.

Flux Reflux

Roll forward 2 years and ANZ has hit the pause button. They’ve just announced their 2019 half-year results, achieving a respectable $3.5bn cash profit for the half year, which is 2% better than the same period last year. But there’s a problem. NWOW is proving way more of a challenge than anyone envisaged.

New Ways of Working, which incorporates Agile principles, has been implemented with around half the Australian workforce at ANZ Bank — some 9000 people - coincidently almost the same number of people have been let go from the organisation since 2016. The programme’s also delivered some notable productivity benefits. It’s simplified processes, improved accuracy, reduced risk and delivered improved customer experiences. And in the technology area particularly, removed a whole swath of cost and complexity in products, processing efficiencies and infrastructure, as more and more workloads are moved to the cloud. ANZ’s IT team has removed $1.5bn of capitalized software off its balance sheet in just 3 years.

But NWOW is no panacea as Shayne Elliott has pointed out:

“It Agile doesn’t work in some areas. It won’t work in contact centres, it won’t work in branches, it won’t work in a dealing room.”

So, it’s been a success in some areas but not others. The pause isn’t because it’s not working, more that ANZ is perhaps suffering a bit of corporate indigestion. The real challenge seems to be the cultural aspects — getting people comfortable with the ambiguity of the new team structure and working methods, communication norms and rituals.

Getting Sh*t Done

ANZ Bank is not alone in recognising the limitations of Agile style processes. In Beyond Agile Lisa Bowen, then head of IT at News Corp in 2017, identified the key to successful adoption of Agile at scale was the ability to recognise how and where it applies and doesn’t assume it will always work in its purest form:

“When we started on our journey towards Agile somebody told me that the enemy of achieving an outcome was methodological purism.” She went on:” You can’t be a perfectionist or a purist if you want to get something done.” What ANZ and News Corp have recognised is that to adopt new ways of working incorporating Agile methods requires determination, discretion and a willingness to be pragmatic. It’s neither the solution to world hunger nor the holy grail for enterprises seeking to reinvent themselves as businesses for the new millennium. ANZ is clearly far from finished with NWOW and Agile. For now, some great learnings for others approaching a similar mission.

By Paul Scott, Portfolio Director.

outcomes

How an incremental approach delivered big bang productivity gains for a major infrastructure business.

Transforming organisational performance / Leveraging emerging technology

    Copyright © Trimantium GrowthOps Limited. All Rights Reserved.