WEBVTT 1 00:00:05.904 --> 00:00:08.270 Michael, thank you for sitting down with us 2 00:00:08.270 --> 00:00:09.640 and sharing your story. 3 00:00:09.640 --> 00:00:11.200 Thank you for having me, and I'm really 4 00:00:11.200 --> 00:00:12.840 looking forward to our conversation. 5 00:00:12.840 --> 00:00:14.690 Michael, you launched a major 6 00:00:14.690 --> 00:00:16.467 customer-journey-at-scale transformation at Alfa-Bank 7 00:00:16.467 --> 00:00:19.471 about two years ago. Could you share 8 00:00:19.471 --> 00:00:21.565 what was the scale of that transformation, 9 00:00:21.565 --> 00:00:23.479 and what were the results? 10 00:00:23.479 --> 00:00:26.560 I'm glad to share the story. We started 11 00:00:26.560 --> 00:00:29.437 a little bit over two years ago. At the moment 12 00:00:29.437 --> 00:00:33.220 the entire bank only runs on customer journeys, 13 00:00:33.220 --> 00:00:36.141 so both in retail and in corporate. 14 00:00:36.141 --> 00:00:39.943 In retail, we have seven different customer journeys, 15 00:00:39.943 --> 00:00:43.251 and in our SME business four different customer journeys. 16 00:00:43.251 --> 00:00:47.107 I could tell probably countless stories, but one of the 17 00:00:47.107 --> 00:00:50.797 vivid ones - the very first journey we launched and which 18 00:00:50.797 --> 00:00:54.509 propelled the speed of change into all the other products - 19 00:00:54.509 --> 00:00:59.509 was in credit cards, and the team has done amazing results. 20 00:00:59.513 --> 00:01:03.661 In nine months, basically they almost tripled the sales 21 00:01:03.661 --> 00:01:07.078 while reducing the acquisition cost in half. 22 00:01:07.078 --> 00:01:09.123 So, Michael, from your experience, 23 00:01:09.123 --> 00:01:11.460 what is the difference between organizing 24 00:01:11.460 --> 00:01:15.260 work by customer journey from organizing work 25 00:01:15.260 --> 00:01:16.620 in the traditional setup? 26 00:01:16.620 --> 00:01:18.410 I would say the key difference 27 00:01:18.410 --> 00:01:21.490 is that in the traditional way of organization, 28 00:01:21.490 --> 00:01:26.152 it creates a lot of silos, so it's created by departments. 29 00:01:26.152 --> 00:01:30.720 Every department has their goals, their KPIs - clearly - 30 00:01:30.720 --> 00:01:34.940 and to find the common goal, to find the unified 31 00:01:34.940 --> 00:01:36.817 set of KPIs, is always very challenging, 32 00:01:36.817 --> 00:01:39.849 and that creates a lot of issues of communication, 33 00:01:39.849 --> 00:01:41.710 et cetera. Customer journeys 34 00:01:41.710 --> 00:01:44.890 help bridge all of that, having the single goal, 35 00:01:44.890 --> 00:01:48.330 having the single set of KPIs across 36 00:01:48.330 --> 00:01:51.570 all of the journey owners, in a way, 37 00:01:51.570 --> 00:01:53.190 and all of the departments that are involved. 38 00:01:53.190 --> 00:01:55.360 So, how many people are in these customer journey teams? 39 00:01:55.360 --> 00:02:00.063 Across these 11 journeys, we have around 1,100 people. 40 00:02:00.063 --> 00:02:03.442 So some journeys have as little as 60 people, 41 00:02:03.442 --> 00:02:06.514 and the biggest journey has almost 200 people. 42 00:02:06.514 --> 00:02:09.760 But it's actually a very large part of the organization. 43 00:02:09.760 --> 00:02:12.190 What's interesting is that we were 44 00:02:12.190 --> 00:02:14.834 able to reduce about 25% of the staff 45 00:02:14.834 --> 00:02:18.369 because the work became so transparent. 46 00:02:18.369 --> 00:02:21.196 Because every single department, in a traditional way, 47 00:02:21.196 --> 00:02:25.520 had their own ideas and projects, and many of them 48 00:02:25.520 --> 00:02:28.550 may have overlapped; many of them created other gaps. 49 00:02:28.550 --> 00:02:32.706 And a lot of it was work that was not necessarily strategic. 50 00:02:32.706 --> 00:02:35.711 What I like about the customer-journey process 51 00:02:35.711 --> 00:02:38.610 is that before, and you asked me a question 52 00:02:38.610 --> 00:02:39.786 about traditional way of working, 53 00:02:39.786 --> 00:02:42.706 we had these quarterly reviews. 54 00:02:42.706 --> 00:02:46.333 And it was a show. You always talk about good stuff. 55 00:02:46.333 --> 00:02:48.444 You never have time to talk about bad stuff. 56 00:02:48.444 --> 00:02:52.816 And in the customer journey process, every single two weeks 57 00:02:52.816 --> 00:02:55.440 the entire team presents results. 58 00:02:55.440 --> 00:02:57.270 They are presented over an hour and a half, 59 00:02:57.270 --> 00:02:58.495 which gives enough time to talk 60 00:02:58.495 --> 00:03:01.100 about all of things that happened and didn't happen, 61 00:03:01.100 --> 00:03:02.296 and do it constantly. 62 00:03:02.296 --> 00:03:04.767 That's interesting, you started with 63 00:03:04.767 --> 00:03:08.250 one journey, two journeys, and you expanded to 11 journeys 64 00:03:08.250 --> 00:03:11.840 over time, so it's almost a customer-journey-at-scale 65 00:03:11.840 --> 00:03:14.047 transformation, but what you're describing 66 00:03:14.047 --> 00:03:17.196 is also an agile-at-scale transformation. 67 00:03:17.196 --> 00:03:20.253 How do these two things intersect at Alfa-Bank? 68 00:03:20.253 --> 00:03:24.200 Agile, of course, has a lot of the elements 69 00:03:24.200 --> 00:03:26.649 that are used in customer journeys. 70 00:03:26.649 --> 00:03:30.592 But in my interpretation, our IT teams 71 00:03:30.592 --> 00:03:33.815 have been working in agile for years, 72 00:03:33.815 --> 00:03:38.807 but it never necessarily created the impact that we see now. 73 00:03:38.807 --> 00:03:41.420 And the main difference is the 74 00:03:41.420 --> 00:03:43.503 customer journey looks holistically 75 00:03:43.503 --> 00:03:46.440 at the entire customer experience, rather 76 00:03:46.440 --> 00:03:49.669 than just a way of working with some changes 77 00:03:49.669 --> 00:03:54.669 and being able to iteratively make mistakes or progress. 78 00:03:54.669 --> 00:03:58.031 It's all about holistically 79 00:03:58.031 --> 00:04:00.430 looking at the entire experience and then 80 00:04:00.430 --> 00:04:03.750 choosing the effort where you want to work in the agile way. 81 00:04:03.750 --> 00:04:05.390 And when you create 82 00:04:05.390 --> 00:04:08.385 these 100-person journey teams, it's clear 83 00:04:08.385 --> 00:04:10.550 from your description that they're coming 84 00:04:10.550 --> 00:04:13.412 from multiple silos of the bank, and you're creating 85 00:04:13.412 --> 00:04:15.880 a cross-functional journey team. 86 00:04:15.880 --> 00:04:18.015 How easy or difficult was that? 87 00:04:18.015 --> 00:04:19.290 How did you do that? 88 00:04:19.290 --> 00:04:20.671 You probably nailed it on the head. 89 00:04:20.671 --> 00:04:21.504 (laughing) Okay. 90 00:04:21.504 --> 00:04:23.440 That's probably the biggest challenge. 91 00:04:23.440 --> 00:04:26.682 Starting these journeys, and of course, scaling them. 92 00:04:26.682 --> 00:04:30.242 And I basically say it's three key P's, 93 00:04:30.242 --> 00:04:32.633 and they're all about, people, people, people. 94 00:04:32.633 --> 00:04:35.710 So, number one, people, is actually 95 00:04:35.710 --> 00:04:37.860 convincing the department heads 96 00:04:37.860 --> 00:04:41.610 to give up their resources to put in these journeys, 97 00:04:41.610 --> 00:04:45.150 where they don't directly, administratively, 98 00:04:45.150 --> 00:04:48.280 and functionally tell them what to do. The journey does. 99 00:04:48.280 --> 00:04:51.130 That's the very first element of challenge. 100 00:04:51.130 --> 00:04:53.130 The second P, once again, is about people. 101 00:04:53.130 --> 00:04:57.354 The people that are inside of these groups - 102 00:04:57.354 --> 00:05:01.645 they have very different routines how they work. 103 00:05:01.645 --> 00:05:04.984 Some of them could be very effective, some may not, 104 00:05:04.984 --> 00:05:08.129 and to inspire them to work in this way 105 00:05:08.129 --> 00:05:11.334 is also a big challenge. And the third challenge, 106 00:05:11.334 --> 00:05:15.941 and once again, with people, as you go along with these 107 00:05:15.941 --> 00:05:19.810 journeys, you actually find that even though 108 00:05:19.810 --> 00:05:22.978 many team members may be inspired, 109 00:05:22.978 --> 00:05:24.962 or they want to work in this environment, 110 00:05:24.962 --> 00:05:28.160 they're just not capable to work there. They could 111 00:05:28.160 --> 00:05:30.320 be very effective in other places but not 112 00:05:30.320 --> 00:05:31.320 in this particular environment. 113 00:05:31.320 --> 00:05:33.730 So, in our experience, we had to rotate 114 00:05:33.730 --> 00:05:37.620 over a third of all of the team in order 115 00:05:37.620 --> 00:05:39.923 to then structure the teams that would be 116 00:05:39.923 --> 00:05:43.863 very, very, effective working with the deadlines, 117 00:05:43.863 --> 00:05:47.370 working with the new routines, working with the new tools, 118 00:05:47.370 --> 00:05:52.340 having a very different set of culture. 119 00:05:52.340 --> 00:05:55.470 There are challenges all across. 120 00:05:55.470 --> 00:05:58.440 But did you also have to do any hard changes 121 00:05:58.440 --> 00:05:59.931 in terms of performance management 122 00:05:59.931 --> 00:06:02.872 and other enablers to make this happen? 123 00:06:02.872 --> 00:06:05.175 Oh, yeah, of course. 124 00:06:05.175 --> 00:06:09.085 The first one, the main cultural aspect of this: 125 00:06:09.085 --> 00:06:12.005 just two years ago, every single department 126 00:06:12.005 --> 00:06:16.125 had their own set of KPIs. 127 00:06:16.125 --> 00:06:20.500 And now the team has one set of KPIs, the entire team. 128 00:06:20.500 --> 00:06:23.912 So there is no one who could be very successful in that team 129 00:06:23.912 --> 00:06:27.590 or unsuccessful. Either the entire team brings success 130 00:06:27.590 --> 00:06:30.770 and everyone benefits from it, or the entire team 131 00:06:30.770 --> 00:06:33.440 doesn't get to the result and no one benefits from it. 132 00:06:33.440 --> 00:06:35.210 So, from the cultural perspective, 133 00:06:35.210 --> 00:06:37.690 from the way we allocate resources, the way 134 00:06:37.690 --> 00:06:42.050 they interact with each other, became transformational. 135 00:06:42.050 --> 00:06:44.771 One of the things that I noticed sometimes 136 00:06:44.771 --> 00:06:47.394 when we talk about journey transformations 137 00:06:47.394 --> 00:06:50.270 is: Where is the additional investment? 138 00:06:50.270 --> 00:06:52.010 Where are the additional dollars? 139 00:06:52.010 --> 00:06:55.170 Did you invest a lot of additional dollars 140 00:06:55.170 --> 00:06:56.860 into this program, or did you use 141 00:06:56.860 --> 00:07:01.230 your existing budgets and people to manage this program? 142 00:07:01.230 --> 00:07:02.986 In the beginning, we invested a lot more. 143 00:07:02.986 --> 00:07:06.988 But I would say, overall, if I look at two years back, 144 00:07:06.988 --> 00:07:11.380 I'd say we're spending more or less 145 00:07:11.380 --> 00:07:16.237 the same in terms of capex but getting a lot more value. 146 00:07:16.237 --> 00:07:19.040 In terms of people, as I said, we're able 147 00:07:19.040 --> 00:07:21.297 to actually reduce the number of people 148 00:07:21.297 --> 00:07:22.807 that work with the changes, 149 00:07:22.807 --> 00:07:24.370 and doing it in a much smarter way. 150 00:07:24.370 --> 00:07:28.420 Overall, it's definitely P&L and ROI positive. 151 00:07:28.420 --> 00:07:30.441 It looks like you've enjoyed this ride a lot. 152 00:07:30.441 --> 00:07:31.274 Yeah. 153 00:07:31.274 --> 00:07:34.910 What were some fun moments of this journey? 154 00:07:34.910 --> 00:07:37.643 Well, number one, 155 00:07:37.643 --> 00:07:39.751 I have to say growth is fun. 156 00:07:39.751 --> 00:07:42.926 Growth creates a lot of excitement. 157 00:07:42.926 --> 00:07:47.920 Growth creates a lot of innovation and new opportunities. 158 00:07:47.920 --> 00:07:52.415 From our perspective, in launching these customer journeys, 159 00:07:52.415 --> 00:07:55.017 the first fun was about, "Hey, let's 160 00:07:55.017 --> 00:07:57.033 try to do things in a new way." 161 00:07:57.033 --> 00:08:00.424 Let's actually try to enjoy, and how do 162 00:08:00.424 --> 00:08:04.130 we attract the top talent that doesn't 163 00:08:04.130 --> 00:08:07.129 want to work in a typical environment, 164 00:08:07.129 --> 00:08:10.458 in these quarterly reviews? How can we make it 165 00:08:10.458 --> 00:08:12.503 a lot more agile? 166 00:08:12.503 --> 00:08:16.023 How do we make it a lot more iterative, more engaging? 167 00:08:16.023 --> 00:08:20.290 So, this was a way for us to dramatically 168 00:08:20.290 --> 00:08:23.250 increase speed, and dramatically increase 169 00:08:23.250 --> 00:08:24.535 the excitement about change. 170 00:08:24.535 --> 00:08:27.818 What role did BCG play in this transformation? 171 00:08:27.818 --> 00:08:31.590 How did our teams collaborate with your teams? 172 00:08:31.590 --> 00:08:32.583 It had different phases. 173 00:08:32.583 --> 00:08:37.200 So, first, it was all about creating for us 174 00:08:37.200 --> 00:08:40.490 the concept and actually customizing 175 00:08:40.490 --> 00:08:44.800 to our environment. What works in Australia or in India 176 00:08:44.800 --> 00:08:46.970 may not work in Russia. And they've 177 00:08:46.970 --> 00:08:49.380 done a very good job of actually giving 178 00:08:49.380 --> 00:08:51.799 us the right set of methodologies, 179 00:08:51.799 --> 00:08:56.796 setting up the right routines, setting up the right metrics. 180 00:08:56.796 --> 00:09:01.437 Then the second part was all about using tools. 181 00:09:01.437 --> 00:09:04.360 How do we look at research? How do we look at data? 182 00:09:04.360 --> 00:09:06.810 How do we look at diagnosing processes? 183 00:09:06.810 --> 00:09:09.080 How do we prioritize, et cetera? 184 00:09:09.080 --> 00:09:11.496 It was a really, really instrumental 185 00:09:11.496 --> 00:09:13.762 part of the engagement. But I'd 186 00:09:13.762 --> 00:09:17.040 say the third element, which was probably 187 00:09:17.040 --> 00:09:20.918 the most important for us, and for me. 188 00:09:20.918 --> 00:09:24.484 I never felt that we had 189 00:09:24.484 --> 00:09:28.092 our team in the bank and BCG 190 00:09:28.092 --> 00:09:31.270 as a separate entity, just advising us. 191 00:09:31.270 --> 00:09:34.468 So, it still really is BCG, 192 00:09:34.468 --> 00:09:37.420 and actually the last names, that worked with us, 193 00:09:37.420 --> 00:09:38.280 because at the end of the day, 194 00:09:38.280 --> 00:09:39.530 I believe it's all about the people. 195 00:09:39.530 --> 00:09:41.790 It's not the brand on its own. 196 00:09:41.790 --> 00:09:44.562 The people that work with us from BCG 197 00:09:44.562 --> 00:09:49.066 have really become the integral part of the team. 198 00:09:49.066 --> 00:09:52.834 First of all, they share the same success we share, 199 00:09:52.834 --> 00:09:55.906 or don't; I think that's from a motivation perspective 200 00:09:55.906 --> 00:09:57.911 as well. And then the way we work together, 201 00:09:57.911 --> 00:10:01.740 they're really part of the daily work, daily routine. 202 00:10:01.740 --> 00:10:03.270 They have the same type of stuff 203 00:10:03.270 --> 00:10:04.887 we're trying to do. 204 00:10:04.887 --> 00:10:06.770 So, really hand in hand. 205 00:10:06.770 --> 00:10:08.620 Thank you so much, Michael, for sitting 206 00:10:08.620 --> 00:10:10.990 down with us and sharing your story. It's fantastic, 207 00:10:10.990 --> 00:10:12.471 and congratulations on the fantastic results. 208 00:10:12.471 --> 00:10:13.304 Thank you. Thank you so much. 209 00:10:13.304 --> 00:10:15.177 Thanks for your support. Thank you.