ANZ takes leaf out of Google’s book to help steer agile teams

Bank looks to OKR framework for agile dividend

ANZ is beginning to employ a management framework developed by Andrew Groves at Intel and famously employed at Google, as well as at other tech heavyweights including LinkedIn and Twitter, to help promote alignment across its business as it continues its move towards an agile operating model based on semi-autonomous teams.

The bank is looking to OKR – objectives and key results – to “help drive our prioritisation, set a clear vision for the company and then let the squads and the tribes really have the freedom to have that same north star,” general manager, group technology transformation, Robert Marchiori, yesterday told the Agile Australia conference in Sydney.

The bank in 2018 began shifting thousands of employees into teams dubbed ‘squads’ and larger groupings of around 150 people dubbed ‘tribes’ based on common goals or objectives within a particular area of ANZ.

The idea with OKR is to put “rails” in place but then “let the tribes and squads get on with it,” Marchiori said.

ANZ group CEO Shayne Elliott in May 2017 announced the bank’s intention to shift to a Scaled Agile approach. The CEO said the push would begin with the Australia division and the bank’s technology team, with ANZ intending to launch it at scale in early 2018.

“Moving to implement the agile approach at scale in our business is an important evolution in how we run ANZ which will allow us to respond much more quickly to customer needs, create higher staff engagement and make further improvements in efficiency,” Elliott said at the time.

“The use of agile will mean a much less hierarchical ANZ, one built around small, collaborative, self-directed teams focussed on delivering continuous improvement in the customer experience.”

In early May 2018, the CEO said that the bank had shifted more than 3000 employees into teams that organised themselves using agile methodologies, and hoped by the end of the year to have more than 13,000 employees participating in the ‘New Ways of Working’ (NWOW) initiative.

The most recent NWOW headcount figures were released by ANZ in October 2018, with more than 9000 people in agile teams (although that figure included both bank employees and managed services).

NWOW is aimed at transforming ANZ’s people, processes and underlying technology, Marchiori told the conference. Much of the past year has been focused on the bank reorganising itself and “setting up a new operating rhythm” by progressively moving into squads, tribes and chapters and moving away from functional silos.

“We took a very conscious decision to really focus on transforming our people first, because it’s the people that change the process and it’s the people that change the technology,” he said.

Now the bank’s focus is moving to “how do we now leverage that great new organisation that we have to actually change our processes, change our underlying technology,” he said.

“And so that’s really about, in the technology space, we’re really accelerating our work with cloud, our work with automated pipelines, and our work with enabling the squads to be able to do their work and trying to start that reduction of dependencies that we have built up from a very traditional model.”

In the “process and practice” space, an effort is underway to “rewire” ANZ. “We’re really starting to learn that we have to have a lot of new mechanisms to manage our portfolio because we’re very broad and large and how do we really use that,” he said. OKR will help drive prioritisation across the group, he added.

ANZ is not “pausing” NWOW, Marchiori said, and has recently moved more employees to the new model. Moving people into a new organisational structure is only a “quarter of the battle,” however. The bank is now looking at how it can “unwind” existing processes and at portfolio-level direction setting.

“We probably erred to far to the side of ‘let’s do do this all bottom-up’” when NWOW launched, Marchiori said. With transformations it’s “very hard to get it just right at first,” he added. “You’re probably going to end up one way or the other – you’re either going to be still a little too command and control or you’re going to be a little too bottom-up.

“We wanted to really break the back of the older models that we had at ANZ around a kind of big program, really command and control [approach] so we probably swung a little too far in terms of saying to the squads well you have the freedom to do what you want.

“We’ve really been focused now on how do we set that super-clear direction for them and let them get on with their work. And we know we’re starting to be successful because it’s the squads and the tribes that are asking for that direction and we’re providing that.”

A large part of the focus at the moment is on maturing the NWOW model rather than using how many employees are in NWOW as the key value metric, he said.

Making releases ‘boring’

Darien Nurhadi, product owner, digital CX, for the ANZ app, told the conference that the bank had strengthened its “delivery muscle” over the last year to the point where releases are no longer a marathon weekend event but happen regularly during business hours. (“They’re boring,” he quipped. “We don’t have a party any more. There would be way too many parties to attend, I think!”)

“I think the key thing is, when we do deliver stuff and we move the dial on things, how do we know that we’re moving the dial on the right things?” he said. “I think that’s the challenge for us and we’re just starting that journey on, I guess, solving for alignment. How do we solve for alignment but keep the teams autonomous at the same time? I think that’s the key challenge.”

To that end, the recent introduction of OKR has reshaped the backlog of the squad he works on, he said. There is still a lot of work to be done in the area, Nurhadi added.

“The good thing is we’re at least a lot more confident that we will be able to deliver things, rather than ‘We know this is the right thing, but man getting thing out the door is like mission impossible!’”

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