Leading on The Diagonal

Deanna OppenheimerCEO, CameoWorks

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The old way of doing business is

changing.

Bank leaders should consider

changing how they organize and

Let’s talk about…retail banking

changing how they organize and

operate:

… Leading on the Diagonal

Why?

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behaviorsour are changingbehaviorsour are changing

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Communication shift:• Societal changes often lag technology changes

• Now they are catching up

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Digital everywhere

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Innovation Cycles Compressed

1.5Years

iPad 2010

3.5Years

Facebook

2004

12Years

Google

1998

17Years

Internet

1993

27Years

Mobile

1983

38Years

Radio

1958

Time to Reach 50M Active Users

Source: Bain and Company

201020041998199319831958

??Years

Next

generation?

?

7Years

Social media

10Years

Mobile

banking

15Years

Online small

business

banking

20Years

Online

consumer

banking

26Years

ATM

channel

Time to Reach 70% Household Penetration

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Digitalization driven disruptionin Retail Banking

Future:

Digital advice, complex

sales, customer engagement

Digitalization

Phase 2

Phase 3

Source: Bain and Company

Past:

Automation of cash handling, electronic

payments and online transactions

Present:

Ubiquitous connectivity, mobile

transactions, simple sales

Time

Phase 1

Phase 2

Current FrontierILLUSTRATIVE ONLY

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Banks must deliver a digitally enabled

customer experience:

• Through a true omni-channel model

Bain has stated it correctly……

• Through a true omni-channel model

• Enabled by technology

• Funded through productivity

• Delivered through the line

……And that is why we need:

8Source: Bain and Company

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Hierarchy is useful and

necessary but…

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…informal networks

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lead to most strategic change

ExCo

Geographies Products Functional Leaders Business Lines Channels

The diagonal organization

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What does it look like internally?• Give diagonal groups real authority

• Engagement from all members – a ‘get to’ mentality vs.

a ‘have to’ mentality

• Use a market based approach for innovation; think

internal venture fund

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Authentic communication that is

targeted and consistent

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• Information sharing and transparency

• Authenticity means being willing to make yourself vulnerable

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Relentlessly simplify:• Meeting structure

• Accountability

• Processes

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Reduce extraneous metrics

Economic

value

covered by

metrics16

Source: Bain and Company based on client experience

Expect the ‘Hat Trick’

You need at least three

out of five (with the

first being mandatory):• Improved the customer

experience

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experience

• Save costs

• Strengthen controls

• Streamline operations

• Increase revenue

Everybody plays;

sitting on the bench is

not an option

What does it look like externally?

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• Source of innovation includes third parties; effective partnership

with smaller companies is a key capability

• Think diagonally with all stakeholders: regulators, unions,

communities

Results: Strong employee engagement

Net Promoter Score (NPSSM) = % Promoters - % Detractors

How likely would you be to recommend your organization as a place to work to a friend or relative?

*Net Promoter ScoreSM is a metric for employee engagement and measures Promoters (score 9-10 on question) and Detractors (0-6). It is the difference between the percentage of

promoters and the percentage of detractors.

Source: Bain decision and org effectiveness database 2013 (n=225)


Results: Increased decision effectiveness

drives the bottom line

5 YEAR REVENUE

GROWTH

5 YEAR AVERAGE

PROFITABILITY (ROIC)

5 YEAR TOTAL

SHAREHOLDER RETURN

Confidence level = 95% Confidence level = 96%Confidence level = 99%

Note: High decision effectiveness range = top quintile of “decision effectiveness scores”; Low/Mid = all other; Growth 2001-2006

Source: Worldscope; Bain decision and organization effectiveness survey


Re-capping the journey

• Formal heirarchy

• Unrecognized talent and ideas

down in organization

• Diagonal groups for strategic

change

• Cross functional working groups

bring people from all levels

Traditional Approach Diagonal Approach

down in organization

• Complex reporting

• Top-down communication, lost

messages

• Too many meetings

• Company does it all

bring people from all levels

• Simple metrics

• Communication up, down, across

the diagonal; short and sharp

• Implement R.A.C.I (Responsible,

Accountable, Consult, Inform)

• Collaboration and partnerships

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Acknowledgements

All data provided by Bain & Company.

For more on this topic see:

• Decision Driven Organization http://www.bain.com/publications/articles/decision-driven-organization.aspx

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ision-driven-organization.aspx

Contact Info:

• www.cameoworks.com

• [email protected]

• + 1-206-906-9536

Leading on The Diagonal

Business

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