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Rugby set piece or new way of working?

By Nick Topazio ACMA CGMA, Associate Technical Director — Management Accounting, Association of International Certified Professional Accountants

When I saw a job advert recently for a “Scrum Master”, I thought one of the teams competing in the upcoming Rugby Union World Cup was looking to get an additional competitive advantage over their rivals. Upon delving a bit deeper, I realised that this was not about extra agility on the field of play, but more about agile business operations.

The “Scrum” in question is not a way to restart a rugby game but rather part of an agile working environment being adopted by companies as they seek to transform their businesses to address the modern commercial environment and secure future success.

Agile working empowers people to work where, when, and how they choose – with maximum flexibility and minimum constraints – and helps optimise their performance to deliver their best work. Spotify, Netflix, Moonpig and ING Bank (the company recruiting the Scrum Master) have all adapted agile working practices.

In fact, ING Bank based in the Netherlands is an organisation that I have studied especially in terms of their agile transformation. In the summer of 2015, ING embarked on a transformational journey in reaction to a new breed of “digitally-native” competitors — organisations that have always had technology and computers at the very heart of their business model — to better serve their increasingly “digitally-native” customer base that regards technology as an integral and necessary part of their lives.

The transformation was a shift from a traditional hierarchical organisation featuring functional departments such as marketing, IT and product development to an “agile” model inspired by companies such as Spotify and Netflix. “Agile Scrum” is the most-used agile methodology where small multidisciplinary teams break their work into actions that can be completed within fixed duration cycles. The teams track progress in frequent, often daily, stand-up meetings and collaborate to deliver the product/goal within the fixed duration cycle. 

Squads and tribes

ING started by implementing the Agile Scrum methodology in the Netherlands reorganizing over 3,000 staff into about 350 “squads” each made of up to nine members.

The multidisciplinary squads are focused on a specific objective and have end-to-end responsibility and a high degree of autonomy. The activities of the squad are co-ordinated by a product owner who manages the backlog and priorities from a position of squad member rather than leader. As the project evolves, the functional composition of the team can change to best deliver the desired outcomes. When the mission is complete the squad is dissolved.

Squads that have interconnected missions are grouped together into tribes. A tribe lead helps to co-ordinate priorities, budgets and is the interface with other tribe leads to ensure knowledge is shared between tribes. Tribe leaders focus on communicating what problems need to be solved and let squads decide how to solve them.  

Operating across squads and tribes are chapters, which help to develop expertise and knowledge across squads. Chapter leads are responsible for personal development, coaching, staffing and performance management for chapter members.  

The benefits of agile working

In discussion with ING’s sustainability team, the benefits of working in an agile way are clear. Increased employee satisfaction and engagement are evident in the way in which people speak about the transformation in their work patterns. Productivity has improved alongside innovation and speed to market.  An important development that helps to increase the pace of successful innovation is an ethos to identify failing projects quickly before they consume too many resources and too much time.  

The team talks about a significant reduction in red-tape compared to the documentation and administration attached to traditional methods of project management. Gone are the formal project plans, work flow charts and multi-period PERT charts (Program Evaluation Review Technique). They’re all to be replaced by portfolio walls and sticky notes relating to more short-term targets and achievements which foster innovation and closer alignment of the squad to its stated purpose.

ING has measured the success of its move to agile thinking against the McKinsey Organizational Health Index (OHI) and has seen improvement in all areas. Major improvements were witnessed in the Direction, External Orientation and Capabilities categories with a particular strength evident in Innovation & Learning. ING’s overall score of 74 places is amongst the top quartile of organizations in the index, a position it is rightly proud of, but nevertheless determined to improve upon.  

And since ING’s transformation has been recognised externally, Global Finance Magazine has named ING “Best Bank in Europe” for the fifth year in a row. The bank was the magazine’s inaugural “Best Bank in the World” in 2017.  ING is seen to be ahead of the curve in adopting digital technology and a culture of innovation.

Although the Netherlands Rugby Union team failed to qualify for the 2019 World Cup, despite beating Ukraine, Moldova and Switzerland, it is clear that the Scrum is a centre of excellence at ING and a growing source of competitive advantage.