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Why is change so hard?

There are lots of reasons and almost all of them are driven by human behaviours. The tech part, whilst it will have it’s own challenges is not that difficult, but unless there is wholesale agreement to change intransigent mind-sets and long ingrained working practices, most transformation programmes are destined to fail.

In my opinion there are two key reasons why financial services firms, and banks in particular, find it so hard to change. One of the biggest problems banks have is that very often an individual’s status is validated by the size of their team and how many people report directly to them. Given the availability of modern technologies, which enables people to achieve so much more with less and the establishment of new, highly efficient working practices, it is staggering to see that this outdated status quo is still the norm in many firms! It means nothing, and contributes even less to the business value they deliver. Sadly, the ‘mine is bigger-than-yours’ attitude still prevails.

I strongly believe this approach is the root cause of many of the challenges most of the larger financial firms continue to grapple with. And is further exacerbated by the supporting ecosystem: lots of people (many offshore) supplied by huge firms fuelled by the need to feed their ferociously hungry money making machines. Back in the day, this was a perfectly acceptable approach when the solution to every problem involved armies of people, but things have changed. Nowadays, if you truly want to achieve real efficiencies and show quantifiable cost savings you have to tackle the volume problem. But time and time again it has been proven this is almost impossible to do while managers continue to be measured by the size of their teams, not the effectiveness of their delivery.

Failure can manifest itself in two ways: “small and quick” and “big and slow”. In many cases, small and quick failure is actually a very positive outcome, providing one learns from it and moves on. More importantly, it helps prevent big and slow failure, which is expensive and difficult to unpick. However, unfortunately in most banks, any type of failure is still seen as disastrous and a sign of weakness. In turn this promotes “waterfall” thinking: where people are driven to believe they have to demonstrate every possible eventuality has been considered and explored before moving forward. Typically this creates time intensive, large scale programmes with lots of up-front analysis and very little up-front delivery, if any. Sadly most programmes that are run in this way often fail. So while the fear of small, quick failure remains a constant, slow failure of most projects is much more likely.

Embracing ‘failure’ is key to the success of all modern technology driven programmes, and I would argue to modern business success too. Trying new things in a controlled environment and learning is the key to creating an agile, fit for purpose business that satisfies the needs of the new age customer and the modern workforce. Right now, it’s hard to see how organisations with a culture of fear of failure and change can ever grow or thrive in the constantly evolving new world economy. I guess the answer is maybe they won’t…

 

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