Unlike Spotify, Barclays had not, until recently, made an institutional commitment to Agile management. Like most of the big global banks, Barclays had management practices and processes that were steeply hierarchical and bureaucratic. As in most large organizations today, Barclays had isolated islands of Agile software developers, but this wasn’t consistent across the organization. Nor had Barclays developed the capability to carry out and learn from rapid experiments with its customers.
Yet management could see that some of the bank’s competitors are already acting with that kind of agility. On the international front, large Asian competitors, such as Alibaba and Tencent, are expanding rapidly, with management and data systems oriented to meet their customers’ needs, not their own internal requirements. They are acquiring new customers for just a couple of cents each, while the cost for larger, mainstream financial players like Barclays was a large multiple of that. Meanwhile, digital behemoths like Google, Amazon, and Apple are handling an increasing proportion of the world’s financial transactions that used to be handled by banks. On yet another front, financial sector startups are innovating rapidly and threatening to create the very instant, personalized, frictionless responsiveness that customers increasingly expect. Although these startups are still small, many of them are now valued at more than a billion dollars. A group of some thirty of them formed in just the last few years are worth collectively more than Barclays’ own market capitalization.
In 2014, Barclays started responding to these external threats, recognizing that it needed to adapt its way of working, management practices and systems. To keep pace with what new competitors were offering, the bank recognized that it would only succeed if it was able to offer, like Spotify, easy, quick, convenient, personalized responsiveness at scale. In short, Barclays had to become Agile. In March 2015, Barclays’ operations and technology team announced that becoming Agile was a key strategic initiative. The many islands of Agile within Barclays were invited to come out from the shadows and become the champions of Agile transformation at Barclays.
Two years later, by March 2017, Barclays had made remarkable progress. After a massive program of Agile training and coaching, the equivalent of more than a thousand self-organizing Agile teams — around 15,000 people — were operating, covering every aspect of the business (commercial bank, investment bank, accounts, audits, and compliance) — all focused on delivering more value sooner to customers. While some teams were still in the early stages of mastering Agile management practices, a sizeable portion were already mature and making significant inroads improving Barclays’ performance.
For example, the Agile Loans team devised an online loan application that reduced the time from “initial ask” to “the Barclays response” from twelve days to twenty minutes. The online solution operates almost a thousand times faster than cumbersome paper-based procedures and in-person interactions requiring visits to physical offices.
Agile Onboarding is another example. You might think that a bank like Barclays would have figured out how to make it easy for anyone to become a customer, either as an individual or as a business, through operating a new account, applying for a loan, making a new investment. Yet in practice, the online and in-branch processes for this function were cumbersome. Barclays had recognized the importance of improving the process: Several years before, it had tasked a group of over a hundred developers to create a better online onboarding process, but they had yet to produce a desirable solution. By contrast, when Barclays put together an Agile team of only six developers, they developed a viable onboarding tool in just six months, also resulting in cost savings and improved productivity.
The Agile transformation at Barclays is both top-down and bottom-up. Support and inspiration from the top are critical to legitimizing the Agile way of working and helping to remove impediments to the fundamental changes implicit in Agile. At the staff level, there is a community of Agile practitioners with some 2,500 people, along with around 15,000 practitioners involved in Agile teams. In fact, it was these Agile community members who drafted the bank’s Agile Enterprise transformation proposal in 2014. Barclays’ own Agile advocates said, “Here’s what Agile means for us and here’s how we should do it.” And now Barclays is doing exactly that. Since Agile is perceived as something inspired and supported — not imposed — from on high, the psychological level of buy-in at the working level is strong.
This is an extract from Stephen Denning's The Age of Agile published by AMACOM