By now most banks have come to the realization that digital transformation is not a luxury, but a necessity to survive and grow, and many have started the process. However, increasingly we hear about project failures and less-than-optimal results – sometimes followed by key personnel departures. Could it be that you expect too much from the existing team?
Let’s examine a typical scenario: Bank A’s board gave the green light for a digital transformation project for a key division, perhaps consumer deposits. A presentation was made outlining the direct and indirect technology cost, and it was determined that the CIO (Jane), with the assistance of the VP of Deposit Operations (Jeff), will lead the project – two star performers and veterans of the organization. No further personnel expenses will be needed, because “everything will be automated and soon there may even be surplus personnel,” and “we will be using off-the-shelf software, guided by our core system provider”. The project starts, but very soon it is behind schedule, and after a year there is no meaningful progress. In fact, there is more work than ever, increased expenses and key people are jumping ship, or are pushed off.
What went wrong? The bank bought the best software and systems, and they put their best people on the project. Well, as always, it is not about the technology alone, but also about human knowledge, willingness to change and available time. Often, it is also about a fresh perspective and experience from the outside.
Putting your best people on the project is a good start, but is not enough:
Jane and Jeff became star performers, because they work hard, are efficient, work long hours and are always prepared to take on more. Soon the new project consumed half their time. Their existing jobs, and the project, suffer. Not an ideal situation, and not what anyone expected, or wanted.
Your best employees will often fail, without additional help. There are numerous reasons for that:
· They may already be too busy. How many banks have people sitting around idle?
· By human nature, the message of change is often best accepted if delivered by both an outsider who “has done it before” and the internal champion.
· People are scared to admit that they are not knowledgeable about the new process, its opportunities and risk.
· We “don’t know what we don’t know”. It is hard to prepare for something where we don’t know all the possible outcomes and constantly changing risk. We then typically try and create an environment so risk averse, that even the lowest risk and best customers abandon or fail during the application process.
Adding the best software and systems is not enough either:
No matter how good the new system and process may be, is anyone looking at how it will be leveraged to bring incremental business and push customers to self-help channels, as opposed to merely driving automation? New systems by themselves don’t bring new business or drive existing customers to cheaper self-help channels; it has, and always will be, about customer awareness and marketing.
Has anyone in the team previously worked on a digital transformation project on the scale of what is now required? How are they going to prepare for a new set of risks if they “don’t know what they don’t know”? The new system may have capabilities and present opportunities that were not previously thought of by the existing team, but has already been done successfully somewhere else. Going digital is not only about saving money, but also about unlocking additional value and creating capacity to scale.
The best transformational teams include both existing and new players:
Leaving the process purely to a team of outside consultants or your technology vendor is not the answer either. There must also be strong in-house commitment, resources and capacity to provide the project with the best chance of success. You already have a winning team. Use your existing team, but strengthen the team with some additional key hires with the relevant digital transformation experience. These appointments could be staggered, but at least one hire should be at the beginning of the project, to ensure that existing good practices and future capabilities are combined well. Make sure that the new process flow provides for the opportunity of scalability, and is not just the automation of an existing process.
Digital transformation is about creating scalability and unlocking value for enhanced profits in the future. If your sole objective is cost saving, especially in the short term, the project will most likely fail. The long-term benefits of strengthening and adding to your in-house team will far outweigh the short-term cost. Your chances of project success will increase vastly, and… you will not lose Jane and Jeff.
