(Tiểu luận) topic agile transformation of raiffeisenbank h

Byimplementing Agile practices and investing in modern IT infrastructure, the bank aimed tocreate a more innovative and dynamic work environment, enhancing its ability to attract andreta

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

==============

EMERGING ISSUES IN MANAGEMENT

TOPIC:

AGILE TRANSFORMATION OF RAIFFEISENBANK

Lecturer: Mr Ngo Quy Nham

Class ID: QTRE304 (GD2-HK2-2023).1

GROUP 7

Nguyễn Ngọc Huyền 2014250204 Phạm Thị Lan Anh 2012250009 Trần Ngọc Thanh Tú 2012250077

Hanoi, June 20th 2023

TABLE OF CONTENTS

A INTRODUCTION

I Summary

II Reason to change

III How did the transformation impact the organizational structure and working style

B CASE ANALYSIS

I PROBLEMS AND CAUSES

1 Problem: Fear from staff

2 Problem: Talent gap

3 Problem: Complicated and lengthy decision making process

4 Problem: Silos in the organization

II SOLUTION

1 Problem 1: Fear from Staff

2 Problem 2: Talent Gap

3 Problem 3: Complicated and lengthy decision making process

4 Problem 4: Silos in the organization

III ACTION PLAN

1 Problem 1: Fear from Staff

2 Problem 2: Talent Gap

3 Problem 3: Complicated and lengthy decision making process

4 Problem 4: Silos in the organization

C CONCLUSION

D REFERENCES

A INTRODUCTION

Summary

Raiffeisenbank, a traditional bank in Russia, underwent a successful Agile transformation led

by CEO Sergey Monin The bank embraced Agile principles, restructured into autonomous teams, and implemented new technology infrastructure They focused on strengthening their employer brand, attracting top talent, and investing in an integrated IT system for optimized recruitment The transformation resulted in tripled IT specialist numbers, recognition as a digital leader, increased customer adoption of digital channels, and financial success Despite the challenges posed by the COVID-19 pandemic and the need for enhanced collaboration, Raiffeisenbank remains committed to refining its organizational structure and delivering value

in the evolving financial landscape

Reason to change

- Increasing customer expectations: The bank faced the challenge of meeting the rising

expectations of customers who were demanding more personalized and convenient digital banking services By adopting Agile practices, Raiffeisenbank aimed to enhance its ability to deliver customer-centric solutions quickly and efficiently

- Competitive landscape: The financial industry is evolving rapidly, with the emergence of

fintech startups and digital disruptors Raiffeisenbank recognized the need to stay competitive and differentiate itself by embracing Agile methodologies, which enable faster innovation, flexibility, and adaptability to market changes

- Internal process improvement: The bank aimed to streamline its internal processes, increase

collaboration, and foster a culture of continuous improvement Agile transformation offered a framework to optimize workflows, break down silos, and encourage cross-functional teams to work together towards common goals

- Attracting and retaining talent: Raiffeisenbank sought to position itself as an attractive

employer for top talent, particularly those with expertise in digital technologies By implementing Agile practices and investing in modern IT infrastructure, the bank aimed to create a more innovative and dynamic work environment, enhancing its ability to attract and retain skilled professionals

How did the transformation impact the organizational structure and working style

- Shifted from a traditional hierarchical structure to a flatter organizational model: The organization moved away from a top-down structure with many layers of management to a more streamlined and decentralized model, promoting a more agile decision-making process

autonomy and authority to make decisions, while the number of management layers was reduced, leading to more direct communication and faster decision-making

- Formed cross-functional teams to promote collaboration and end-to-end product development: Teams were composed of members from different functional areas, fostering collaboration, knowledge-sharing, and ensuring a holistic approach to product development and delivery

- Encouraged a culture of teamwork and knowledge-sharing across departments: The organization emphasized the importance of teamwork and created opportunities for employees to share their expertise and learn from one another, breaking down silos and promoting a culture of collaboration

- Iterative and Incremental Work: Agile methodologies introduced a shift from traditional waterfall project management to iterative and incremental work cycles Projects were divided into smaller, manageable tasks or sprints, allowing for faster delivery of value to customers This iterative approach enabled teams to receive continuous feedback, adapt to changing requirements, and make improvements along the way

- Flexibility and Adaptability: The Agile transformation brought about a greater emphasis on flexibility and adaptability within the organization Teams were empowered to respond quickly to market changes, customer needs, and emerging opportunities This agility helped Raiffeisenbank stay competitive in a rapidly evolving financial industry

B CASE ANALYSIS

PROBLEMS AND CAUSES

1 Problem: Fear from staff

Analysis

The problem occurs because of the following reasons:

Breaking routine: People do not want to give up their comfort zone and daily routine that

provide predictability

● “At the time the transformation was launched, the bank had been abiding by the values of "comfortable entrepreneurship" and servant leadership for several years”

● "It was difficult for them to part with the idea that IT is some kind of independent organization”

● “The CIO of Raiffeisenbank, Andrey Popov found himself in charge of the employees who did not see themselves in the new roles”

Direct costs: People tend to block actions that result in higher direct costs or lower benefits

than the existing situation, threatening their autonomy, job security, and career opportunities

● “Many departments were disbanded and their leaders lost their formal positions”

● “To assume the new role of a product owner, an employee had to defeat internal and external candidates in an open competition”

their privileged status”

Consequences

● Not everyone was happy about this, and people started to leave As a result, there was a serious shortage of product owners, tech leads, scrum masters, and especially, developers

2 Problem: Talent gap

Analysis

Talent gap at Raiffeisen Bank was caused by:

Capacity of some current staff is not suitable for the new business model

● The bank has been around for more than 120 years and operates on a traditional model instead of a digital bank, so the employees are recruited with the qualities of a large bank with separate physical operations and IT departments Therefore, some people cannot keep up with technological changes because of the lack of technological capacity

Capable of adapting to digital transformation, but the training program is not suitable

● As mentioned in the case

.” Just normal training is not enough to fully equip them in their new roles Only learning through books without practice will be ambiguous and awkward when encountering strange problems

Consequences

● Inefficient execution: “people had agreed with the changes in words but in actions continued to operate in the old paradigm.”

● Staff’s dissatisfaction: employees are demotivated, dissatisfied, and low organizational commitment: Efforts but not seeing results make employees frustrated and lower expectations

3 Problem: Complicated and lengthy decision making process

Analysis

Complicated and lengthy decision making process was caused by:

● As mentioned in the case, “Product owners were hesitant to act decisively after joining the teams in fear of losing valuable experts.” Disjointed collaboration

in the team is the main cause of this Product owners lack confidence because they are novice with their new responsibilities and are ambiguous about how their teammates behave

● Autonomy increases in a team As mentioned in the case, “

This sometimes reduces productivity at work, especially in projects that need to take action quickly and decisively

4 Problem: Silos in the organization

Silos in the organization were caused by:

Disunity and Low interest in common goal of company

● In the case of Raiffeisenbank, it appears that the LeSS team members have developed strong identification with their job and team, rather than the organization as a whole This may be due to the delegation of voice rights being limited to the team level, rather than across the organization As a result, the team members feel more connected to their immediate colleagues and work, rather than the broader company

Consequences

● The disunity and lack of shared interest in the company's goals created further challenges In an attempt to involve more individuals in the project, the board approached the mobile notifications team, equipped with the necessary skills, to assist

their colleagues However, they encountered unexpected resistance, as other

employees were reluctant to set aside their own tasks, which they deemed as important Consequently, each team remained focused on their specific products,

with varying degrees of reluctance and understanding regarding the shared tasks at hand

SOLUTION

Problem 1: Fear from Staff

Training: This is an important process in most change initiatives because employees need

new knowledge and skills to fit the organization’s evolving requirements Training helps employees break old routines and adopt new role patterns There are some possible training processes that Raiffeisenbank can adopt such as Action learning or Coaching

In reality, they used Coaching, to be specific, inviting external coaches to help the teams understand and accept these events and develop new skills or adapt their previous behavior patterns to benefit from the new system However, we see that they need to apply this Coaching method more thoroughly and seriously to convey clearly the overall objective of the organization and the reason why they have to change the way they operate because during this process, many employees still did not see how serious the transformation was

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Besides, they can also use Action learning simultaneously with Coaching for better results.

Stress Management: Organizational change is a stressful experience for many people

because it threatens self-esteem and creates uncertainty about the future Communication, learning, and employee involvement can reduce some of these stressors However, research indicates that companies also need to introduce stress management practices to help employees cope with the changes In particular, stress management minimizes resistance by removing some of the direct costs and fear of the unknown of the change process Stress also saps energy, so minimizing stress potentially increases employee motivation to support the change process

Integrative Negotiation (Win-win solution): A form of influence that involves the promise

of benefits or resources in exchange for the target person’s compliance with the influencer’s request This strategy potentially activates those who would otherwise lose out from the change However, it tends to merely gain compliance rather than commitment to the change effort, so it might not be effective in the long term

Problem 2: Talent Gap

● Re-establish a new performance evaluation system & rebuild new recruiting & selecting system

The redesign of the employee evaluation system helps to evaluate employee performance based on new criteria This makes the implementation of the strategy based on the new business model more accurate and rigorous Those who are qualified and have potential for development will be retained and invested in training and coaching, while those who have no potential will have to leave to make room for those with more potential for development This ensures efficient use of resources to produce good results

● Applying mentorship programs & sharing spaces

The atmosphere at mentorship and sharing space is more relaxed and less formal than training and coaching sessions with experts, so employees can freely express their problems to colleagues like friends helping each other Moreover, having a mentoring program and sharing sessions in place keeps learning consistent, so everyone is always growing

Problem 3: Complicated and lengthy decision making process

● Clarify expected goals for product owners

The core idea is focusing on business outcomes, not the work The clearer the goal, the easier

it is to avoid unnecessary discussions Besides, the pressure of time and output makes product

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limited time.

● Empower product owners by fostering team collaboration and knowledge sharing

The emotional connection in the team comes naturally, helping everyone understand each other's working styles, thoughts, personalities, and needs better This cohesion will help product owners communicate better with people in the team, avoiding misunderstandings Moreover, knowledge sharing helps equip professional knowledge to be more confident when entering a new team This will help build confidence and encourage taking action based on shared knowledge

Problem 4: Silos in the organization

● Disunity and low interest in common goal of company

+) From an organizational innovation and change perspective, there are several recommendations that Sergey Monin, the CEO of Raiffeisen Bank, could consider to address the issue of low interest in the overall development of the company by its employees

To unite employees around a single objective and highlight the value of collaboration, Monin

should experiment with team composition, titles, and performance measures.

+) Start an agile transformation of the company's culture, focusing on fostering a sense of purpose and values that are shared across various product sectors.

III ACTION PLAN

1 Problem 1: Fear from Staff

Training:

1) Understand the participants/employees (using surveys, observation, meetings, etc): Employees who resist to change often belong to the following groups:

● Employees who are highly invested in the current way of doing work

● People who created the current way of doing work that will be changed

● Employees who expect more work as a result of the change

● Those who advocated a particular alternative, (e.g., they wanted Option B, but Option

A was selected)

● People who have been very successful and rewarded in the current way of doing work 2) Conduct appropriate training session for each group of employees above

For example, for those who are in the 1st group, what they need to know can be how digital transformation outperforms the traditional way of working and how it benefits them; for those who are in the 2nd group, what they need to know can be how they can adapt their previous behavior patterns to benefit from the new system, etc

thoughts and solicit their suggestions as their engagement in the design and implementation of the change

Expected outcomes:

1) The rationale, the goals, and the steps of the change initiative are clearly and consistently communicated

2) Employees understand the purpose, the benefits, or the process of the change

3) Ensure employees feel valued, respected, and be part of the solution, rather than victims or obstacles of the change

Stress Management:

1) Understand the employees (using surveys, observation, meetings, etc), find out their sources of stress

2) Ensure availability of mental health resources:

● Create a mental health resource center onsite

● Ensure that employees have confidential access to mental health services

● Foster a culture that does not stigmatize mental health

● Include mental health awareness in the onboarding process

3) Create a supportive work environment

Expected outcomes:

1) Minimize the level of employees’ fear, anxiety, anger or sadness

2) Ensure employees be more engaged in their work and focused on their responsibilities

3) Increase work productivity

Integrative Negotiation:

1) Prepare where, when, with whom, and under what time constraints the negotiations will take place

2) Exchange information: Employees should be allowed to share their underlying interests and concerns uninterrupted, including what they aim to receive at the end of the negotiation and why they feel the way they do

3) Clarify: If employees disagree with something the organization/department representatives are saying, the two sides should discuss that disagreement in calm terms (active listening and calm feedback; controlled body language) to reach a point

of understanding

4) Conclude and implement: Once an acceptable solution has been agreed upon, both sides should thank each other for the discussion, then they should outline the expectations of each party and ensure that the compromise will be implemented effectively with written contracts and follow-up supervision