-: Michael, thank you for sitting down with us
and sharing your story.
-: Thank you for having me, and I'm really
looking forward to our conversation.
-: Michael, you launched a major
customer-journey-at-scale transformation at Alfa-Bank
about two years ago. Could you share
what was the scale of that transformation,
and what were the results?
-: I'm glad to share the story. We started
a little bit over two years ago. At the moment
the entire bank only runs on customer journeys,
so both in retail and in corporate.
In retail, we have seven different customer journeys,
and in our SME business four different customer journeys.
I could tell probably countless stories, but one of the
vivid ones - the very first journey we launched and which
propelled the speed of change into all the other products -
was in credit cards, and the team has done amazing results.
In nine months, basically they almost tripled the sales
while reducing the acquisition cost in half.
-: So, Michael, from your experience,
what is the difference between organizing
work by customer journey from organizing work
in the traditional setup?
-: I would say the key difference
is that in the traditional way of organization,
it creates a lot of silos, so it's created by departments.
Every department has their goals, their KPIs - clearly -
and to find the common goal, to find the unified
set of KPIs, is always very challenging,
and that creates a lot of issues of communication,
et cetera. Customer journeys
help bridge all of that, having the single goal,
having the single set of KPIs across
all of the journey owners, in a way,
and all of the departments that are involved.
-: So, how many people are in these customer journey teams?
Across these 11 journeys, we have around 1,100 people.
So some journeys have as little as 60 people,
and the biggest journey has almost 200 people.
But it's actually a very large part of the organization.
What's interesting is that we were
able to reduce about 25% of the staff
because the work became so transparent.
Because every single department, in a traditional way,
had their own ideas and projects, and many of them
may have overlapped; many of them created other gaps.
And a lot of it was work that was not necessarily strategic.
What I like about the customer-journey process
is that before, and you asked me a question
about traditional way of working,
we had these quarterly reviews.
And it was a show. You always talk about good stuff.
You never have time to talk about bad stuff.
And in the customer journey process, every single two weeks
the entire team presents results.
They are presented over an hour and a half,
which gives enough time to talk
about all of things that happened and didn't happen,
and do it constantly.
-: That's interesting, you started with
one journey, two journeys, and you expanded to 11 journeys
over time, so it's almost a customer-journey-at-scale
transformation, but what you're describing
is also an agile-at-scale transformation.
How do these two things intersect at Alfa-Bank?
Agile, of course, has a lot of the elements
that are used in customer journeys.
But in my interpretation, our IT teams
have been working in agile for years,
but it never necessarily created the impact that we see now.
And the main difference is the
customer journey looks holistically
at the entire customer experience, rather
than just a way of working with some changes
and being able to iteratively make mistakes or progress.
It's all about holistically
looking at the entire experience and then
choosing the effort where you want to work in the agile way.
-: And when you create
these 100-person journey teams, it's clear
from your description that they're coming
from multiple silos of the bank, and you're creating
a cross-functional journey team.
How easy or difficult was that?
How did you do that?
-: You probably nailed it on the head.
-: (laughing) Okay.
-: That's probably the biggest challenge.
Starting these journeys, and of course, scaling them.
And I basically say it's three key P's,
and they're all about, people, people, people.
So, number one, people, is actually
convincing the department heads
to give up their resources to put in these journeys,
where they don't directly, administratively,
and functionally tell them what to do. The journey does.
That's the very first element of challenge.
The second P, once again, is about people.
The people that are inside of these groups -
they have very different routines how they work.
Some of them could be very effective, some may not,
and to inspire them to work in this way
is also a big challenge. And the third challenge,
and once again, with people, as you go along with these
journeys, you actually find that even though
many team members may be inspired,
or they want to work in this environment,
they're just not capable to work there. They could
be very effective in other places but not
in this particular environment.
So, in our experience, we had to rotate
over a third of all of the team in order
to then structure the teams that would be
very, very, effective working with the deadlines,
working with the new routines, working with the new tools,
having a very different set of culture.
There are challenges all across.
-: But did you also have to do any hard changes
in terms of performance management
and other enablers to make this happen?
-: Oh, yeah, of course.
The first one, the main cultural aspect of this:
just two years ago, every single department
had their own set of KPIs.
And now the team has one set of KPIs, the entire team.
So there is no one who could be very successful in that team
or unsuccessful. Either the entire team brings success
and everyone benefits from it, or the entire team
doesn't get to the result and no one benefits from it.
So, from the cultural perspective,
from the way we allocate resources, the way
they interact with each other, became transformational.
-: One of the things that I noticed sometimes
when we talk about journey transformations
is: Where is the additional investment?
Where are the additional dollars?
Did you invest a lot of additional dollars
into this program, or did you use
your existing budgets and people to manage this program?
-: In the beginning, we invested a lot more.
But I would say, overall, if I look at two years back,
I'd say we're spending more or less
the same in terms of capex but getting a lot more value.
In terms of people, as I said, we're able
to actually reduce the number of people
that work with the changes,
and doing it in a much smarter way.
Overall, it's definitely P&L and ROI positive.
-: It looks like you've enjoyed this ride a lot.
-: Yeah.
-: What were some fun moments of this journey?
Well, number one,
I have to say growth is fun.
Growth creates a lot of excitement.
Growth creates a lot of innovation and new opportunities.
From our perspective, in launching these customer journeys,
the first fun was about, "Hey, let's
try to do things in a new way."
Let's actually try to enjoy, and how do
we attract the top talent that doesn't
want to work in a typical environment,
in these quarterly reviews? How can we make it
a lot more agile?
How do we make it a lot more iterative, more engaging?
So, this was a way for us to dramatically
increase speed, and dramatically increase
the excitement about change.
-: What role did BCG play in this transformation?
How did our teams collaborate with your teams?
-: It had different phases.
So, first, it was all about creating for us
the concept and actually customizing
to our environment. What works in Australia or in India
may not work in Russia. And they've
done a very good job of actually giving
us the right set of methodologies,
setting up the right routines, setting up the right metrics.
Then the second part was all about using tools.
How do we look at research? How do we look at data?
How do we look at diagnosing processes?
How do we prioritize, et cetera?
It was a really, really instrumental
part of the engagement. But I'd
say the third element, which was probably
the most important for us, and for me.
I never felt that we had
our team in the bank and BCG
as a separate entity, just advising us.
So, it still really is BCG,
and actually the last names, that worked with us,
because at the end of the day,
I believe it's all about the people.
It's not the brand on its own.
The people that work with us from BCG
have really become the integral part of the team.
First of all, they share the same success we share,
or don't; I think that's from a motivation perspective
as well. And then the way we work together,
they're really part of the daily work, daily routine.
They have the same type of stuff
we're trying to do.
So, really hand in hand.
-: Thank you so much, Michael, for sitting
down with us and sharing your story. It's fantastic,
and congratulations on the fantastic results.
Thank you. -: Thank you so much.
-: Thanks for your support. -: Thank you.