Transformation through Partnership in Poland David Mullins Strategic Change Unit AIB Group AIB Group Overview Ireland’s largest bank and financial services organisation with an asset base of.
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Transformation through Partnership in Poland David Mullins Strategic Change Unit AIB Group AIB Group Overview Ireland’s largest bank and financial services organisation with an asset base of €85.7bn Over 1,000 offices, over 31,000 staff & over 5 million customers world-wide Core Retail / Commercial Banking operations in: • Ireland • UK • Poland - Poland: Macro Economic conditions Poland Poland will benefit from EU structural and cohesion funds - rising living standards for all Good Educational standard Economic discipline - Maastricht Criteria Movement to a stable low interest rate environment A positive environment toward foreign direct investment A country familiar with change and a people prepared to embrace it Macroeconomic conditions expected to improve 2000 5.0% GDP Growth 2001 2002 2003 F 2004F 0.0% -1.0% 4.0% -2.0% 3.0% -3.0% 2.0% -4.0% -5.0% 1.0% -6.0% Central Budget Deficit 0.0% 2000 2001 2002 2003 F 2004F PLN 4.5 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% NBP Intervention Rate EUR / PLN 4.0 3.5 3.0 2.5 2.0 2000 2001 2002 2003 F 2004F 2000 2001 2002 2003 F 2004F AIB’s development in Poland 1992/97 AIB International Consultants “twinning” with Wielkopolski Bank Kredytowy (WBK) 1994 Explore Equity Investment potential in Central Europe - Poland selected 1994 Initial Shareholding in WBK 1999 Purchase of 80% of Bank Zachodni 2001 Merger of WBK & BZ 2001 Bank Zachodni WBK floated on WSE Investment rationale in Poland... Population Scale - 10 x size of Ireland Favourable geographic position in Central Europe Leverage trade links to existing geographies Scope for rapid development of financial services industry Competent & supportive local management Long Term twinning arrangement Close cultural fit The Principles of Reform Beyond Twinning That transformation would be done through Polish Management. That the transformation/ reform process would be owned by AIB and not outsourced That professional management techniques would be applied to the management of change. Twinning “Two in Box” Development of AIB Change and Project Management Methodology Certification of AIB and local management in the approach “Beginning with the End in Mind” AIB Investment to date in Poland... PLN Mln WBK BZ 434 2,635 Total Investment 3,069 The Tranformation Agenda The Challenge The Change Challenge Implement a de-centralised IT system model to a centralised system across 450 branches and 10,000 people Develop a single business model a s a basis for an eventual merger. Undertake merger of Bank Zachodni and WBK Shift the organisation from back office activities to customer facing activities Re-orient the culture of the organisation away from transaction to Customer facing behaviour. Restructure the organisation and head office to support the new business model. Change Capacity Degree of Change •Reduce total number of Projects both IT and Change •Challenge Non B1 focused projects Capacity Demand Risk of superficial application BZ WBK •Identify Win/ Win Projects •Integrate Projects into B1 Timeline BZ WBK B1 Time Transformation Objective To create rapidly a top class customer-centric efficient branch banking business supporting a single product set and operating processes in the new merged bank. This will serve to position the bank for increased profitability and growth. B1 BZ Merger BZ WBK WBK Integrated Change Journey „AS IS” BZ „TO BE” ONE, COMMON BUSINESS MODEL WBK Two different starting points in change journey for BZ and WBK. Two different levels of change required to reach Branch Model. Two different levels of capability and experience. Technical Change Journey WBK FRiOR ARiMR 224 222 225 SI-BANKKI SWIFT INTERNATIONAL MIG-DZ KIR 242 167 120 121 162 220 223 NEW TYTUS 181 WEBIS 173 BO3 175 227 WSPB4 MIS MKF MIS credit module KGB 239 CSI 238 CONV. 144 BANKMASTER 174 IRBIS 51,54 1, 25, 26 115 114,141 CSR 109 180 255 110 166 ARKA 48 129 172 169 165 206 64 MIS Workload VAP VISA EDIT PACKAGE 133 25 1 26 23 30 24 201 108 109 5 139 140 193 32 CBP 250 262 248 137 199 200 205 204 SORBNET 112 CEKE GUS (statistic) AIB ARiMR SI-BANK-KI BRIR MIG-DZ GINB WEBIS ZUS PŁATNIK Bank employess payroll NEW TYTUS 111 internet banking Z500 212 NEW MIS International payments GSM banking 210 156 General Ledger phone banking 211 PRIME 263 Branch68,125 FRiOR-BK WSPB4 NBP national Headquarters BRIR SYBIR 213 kred-wal SWIFT internationa l ELIXIR 176209 148 188 106 KIR - Central ATM ATM GBH BPH CU DB 147 CBD 204 NOSTRO 80 TRIDENT/ Hypercom (POS) 136 198 197 207 208 202203 CREDIT DESK MIS CBD WBK24 CEKE.exe 249 EUROPAY euro-module 135 134 CORTEX 194 153,205 ICB MIS Strategic Customers Module 128 184 1 KREDO 264 85 154 MIS biuletin 4 60 RBAN 214 215 132 AMS 226 FRiOR-BF Money Loundry App. PPI Admin MAESTRO MIS RZB 118 119 15 16 17 18 19,266 243,244 257,258 1,23,24 1,25,26 1,23,24 1,25,26 108 221 104 Treasury dpt. (SPIK Analiza lokat) FILAR IDEA 245 189 253 ELIXIR 256 12, 13, 14 267 143 52 241 20, 21, 22,259,260 SEZAM Card cntr 33 1,23,24 KOBRA 105 49 230 252 142 SEZAMIX 113 kred-wal CUR dpt 246 SUN 130 IT dpt. 191 98 251 217 POLCARD PRIME 47,55 159,161,164 145 79 Centrum Kart PRESS 218 DKF 240 B2 81 219 Ballance sheet&income statement module 186 171 Customer 74 58 187 SI-BANK-KI 73 SEZAM Scanning MIS budgeting 185 177 PW2 SWIFT_C KI00 ABIO ST400 SLINK Scanning MIS 190 170 UNIPRZELEW 42 216 126,127,183 178 SKARBIEC BRIR SYBIR-O GUS (statistic) Headquarters 179 ELIXIR 158 AIB NBP national SORBNET 168 CEKE .4ge 43 2 Treasury system 63 232 Fixed Assets POLCARD VISA B03 131 92,99,100 Z500 101,102,103, 93 62 61 146 SI-BANK-KI 123 90,91,106 78 6 34 163 122 124 157 94 95 96 152 228 83,84 GBH 117,150 3,16,149,116 87,88,89,261 SEZAM EUROPAY ELIXIR 82 138 CREDIT DESK SYBIR-O SI-BANK-KI Money Laundry DB POS CORTEX ATM 7,8,9 71,196,265 10,11,70,195 231 Stock Exchange Reginal Branch(for Post service) 28 SYBIR-O 66 SEZAM 66 69 27 29 72 PIN PAD (SIK) 233 237 236 ICBS UNIPRZELEW 41 35,37,39 e-banking CBH Minibank (homebanking) 36,38,40 NBP regional (S-35) 234 FFITEST 77 Post Gdansk 67 RATY 76 SEZAM CBH 235 Integrated supporting systems Minibank RUP Customer 155 Poczta Polska Converted Branch UNIPRZELEW PLATNIK BZ KIR BRIR SYBIR-0 ARS / RATY,FFITEST ICBS Terminal BGK PLATNIK BRIR Government AIB 119 ELIXIR-C WEBIS SPR_WAL DIS ATLAS Headquarters SYNON FRIOR_BF FRIOR_BK REUTERS FACTORING 93 4 125 40 BAKIS-C 137 RABA-C RAPAIB 151 BAKIS-O 94 94 transakcje na bonach skarbovych PROMAKPOWIERNIK WALUTY 95 BAKIS-O PLACE 111 TRIARCH 139 RABA-O SPEKC PLUSO -DRB 95 128 181 PADWA W 27 27 7 97 COBRA BZTABELA 138 130 116 BILANS 175 176 ROZL_MAG (MAGAZYN) 180 28 28 123 FASTWIRE RABA-O 120 KRACCN NOTY_ZOR 127 PADWA 121 78 110 27 118 POLCARD BRAD DEBAK 81 160 85 67 ZORBA 2000 plus DRB 94 183 BONY 23 84 SKWRM_E 3 OBLIG 1 112 109 NOTY 104 PLUSO_C ASYGNATA 92 43 42 6 28 20 EUROPAY euro-module RESZ_C RESZ_B SETTL 5 83 ZORBA SETTL 170 171 171 6 KRED DO-DRB 33 UTRACC 74 LONOR INOB DRAB 184 MONREZ 76 21 KRESTU EWIN LOKAP OBUD_C 170 KURC_C 171 PRIME 90 ZORBA AUTO 136 STABLODC RANK ARIMR BILW 98 LUKAS BANK ZOB2000C 39 113 101 21 124 135 187 BAKIS-O 161 MONREZ 115 210 Branch 133 ARIMR-Z 116 95 OBUD 114 PLUSO_O 20 27 161 43 STABLODN 117 EWIN 154 211 ZOB2000 SPEK RESZ_O 131 200 RBAN BILANS-O ZORBA 2000 plus 96 108 140 99 42 103 RABA-O 132 KRED SEKW KURC_O BILW 212 126 SETTL 7 ATM 204,205 208 206,207 153 152 209 SEKW_C 188 UTRAC 35 SI-BANKI*KI SETTL MONREZ-C 160 75 PROMAK - Dom Maklerski CORTEX 43 42 170 SORBNET 202 203 ZORBA CORTEX 100 171 170 179 43 SETTL 182 RBAN MAJATEK TRWALY 107 109 42 77 ELIXIR-O 185 186 VAP VISA access point MIG_DZ ZORBA 2000 plus BKC POS 34 78 177 70,201 122 10 2 71,73,82,213 141 72,172 173 83 6 ELIXIR-O ADRESAT 85 KRACN CZEKI 174 79 163 118 22 84 NetBANK2 PLACE Client PC PLATNIK KONWZAS Rejestr zastrzeżeń bankowych PROTECTOR 164 10 119 NBP regional Zakład Energetyczny, other institutions sending Direct Debits 165 RUP ARS Branch Teller PIN PAD (SIK) GINB NBP SWIFT Network 178 internet banking GSM banking batch interface to external application Access app (MIS) PLATNIK 75 182 Terminal phone banking pc-banking The Strategic Context Year 2000 Year 2001 Year 2002 and later SPONSORSHIP Strategic (AIB Group, Poland Division) Decision to get a centralised system using FISERV package Achievement of Strategic Objectives Solution design, shaped by Divisions (Master Plan, BAG, B1 staff) Operational (Bank Divisions, B1) Execution Solution implementation at Divisions Solution built and tested (B1) B1 Stage 1 B1 Stage 2 + Parallel Run B1 Pilot B1 Mass Rollout The Key Challenge 1) Issues/ Challenges to be addressed by B1 B1 Program 2) Challenges in the Coordination of Change with 2 Organisations Challenges for both Banks BZ WBK Change Complexity Project E Project A Project D Project B Project C The Programme Identity • To work together to be One Bank To achieve the number one position for excellence in Polish Financial Services. The Core Approach Change Strategy Solution Ownership Transition Human Experience Lessons Learned S-curve experience Change Strategy Supply Demand + Macro Micro Navigation Challenges Scope and scale of the Change Technical Human Structural “Scope Creep” Too much change already underway in the Organisation. Lack of integrated planning No developed strategy Local decentralised and organic approach to transformation Developing the pace of the change to map onto the market and organisational requirements Navigation Identification of the Transformation as a Change Management Challenge rather than a technology change. Development of Change Vision for the programme Implementation of AIB Project and Change Management Methodology through Polish Certification of Polish staff on “best practice”. Development of a Project Portfolio Engagement of senior and middle management in developing the “Integrated Change Journey” Development of “Journey Visuals” to address language barriers. Implementation of multi language planning function. Integration of Change • Large number of initiatives • Insufficient clarity as to objective, scope, timeline, interdependencies • Uncoordinated content and timing Change • Agree strategy and close details of ‘To-Be’ state to provide reference point for all change • Reduce number of initiatives (Quick Check, grouping) • Stop, modify and initiate projects to align change in banks with B1 • ‘Contract’ change projects with B1 Capacity to absorb change BZ B1 BZ WBK WBK Integrated Change Journey • Cohesive change plan across B1, BZ & WBK • Rigorous management of projects in terms of: content, timing and delivery • CM units to ‘programme manage’ change Leadership Challenges Well educated management but little experience of complex interdependent change programmes. Communication to a multi national interdisciplinary team Team comprised of Hungarian, Czech, Polish, Irish, Portuguese, Indian, American. Development of a cohesive management team from two different organisations Regional and cultural differences between the staff of both banks. Developing the management cadre to overcome experience gaps. Stamina to deal with the “overhead” of a multi language environment Leadership Implementation of results rather than activity based management system. Introduction of open results based structure. Removal of offices and associated position based benefits Introduction of quarterly based incentive scheme based on values and behaviours Development of multi lingual planning and communications office Set up of B1 organisation as template/ role model for the future organisation. No distinction made between local and AIB staff Continuous communication based on a stakeholder analysis. Most communication done through local management Regular visits from AIB senior management Enablement Challenges No common vocabulary for change and project management. Inconsistent approach to management processes. No experience in leading and managing large scale change No clear development plan for staff Enablement Implementation of “best practice” management processes Change Governance Risk Management Processes Meeting Processes based on results orientation. Development of Change portfolio management Provision of External consultants based on AIB’s “2 in a box” model. Provision of classes in English and Polish for programme members. Development of multi lingual enablement function to facilitate communication able to operate in 6 languages. Continuous emphasis of the “AIB Way” of doing things Ownership Challenges Significantly different cultures in both banks. The perception of both banks of each other was not conducive to team work Original fear of the change and the impact on job security. Our most recent acquisition had a poor history of weak management Lack of experience coupled with enthusiasm had led to failed attempts at change. Ownership Development of a strong sense of urgency through extensive communication Development of a change network comprising some 500 people Development of Interdisciplinary team Emotional identification with Project values, Project logo and values Development of strong values and recognition Flat open organisation structure Communication The objective of the communication is to build commitment of various stakeholder groups at a correct pace. A different mix of communication techniques and timing will be applied, depending on the target audience and the desired level of their commitment. Level of Commitment: INTERNALIZED B1 Members INSTITUTIONALIZED HO Employees / Senior Mgmt Branch Employees ADOPTED INSTALLED Customers and External Audience POSITIVE PERCEPTION UNDERSTANDING AWARENESS CONTACT Stage 1 Stage 2 Stage 3 Stage 4 The Change Journey Managing the Journey of Change Navigation Stakeholder Management Risk Management • Change Planning • Success Measurement • Benefits Management • Cost Management • Change Initiative Integration • Business Case Building • • Change Drivers Ennoblement Executive Team Development • Leadership Development • Conflict Resolution • Vision / Agenda Creation • Marketing the Change Journey • Executives as Sponsors • Executive Coaching / Counselling • Event Creation • Redesigned Processes Organization Design • Training and Performance Support • Communications • Career Design • Competency Development • Appraisal and Rewards • Job Design Pain Management Coaching for New Roles • Encouragement of Creativity • Establishment of SelfManaged Teams • Trained Change Agents • Empowered Experts • Best Practices Capitalization • Involve affected • • • • Leadership Macro Performing Organization Ownership Micro “Supply” “Demand” The Change Journey Ownership Navigation Leadership Leadership Navigation Enablement Enablement Programme Lifecycle