On A Mission: Nationwide Building Society Presentation (London 2020)

Nationwide is in the midst of an organisation-wide pivot, realigning from a largely functional organisation to one fully aligned to our ‘Member’ needs. We’re calling these our ‘Missions’. You heard from Nationwide last year and how we have focussed on digital transformation. This year hear how this wider organisational change is happening, all underpinned by much stronger Agile and DevOps practices, and Ways of Working cultural shift. Patrick Eltridge (Chief Operating Officer) and Janet Chapman (Mission Leader) will bring this transformation to life including the industry imperatives for this change and how we are progressing. We also want to hear from talented individuals who share Nationwide’s values and ambitions, and who bring the skills and capabilities required to make this transition happen!


Janet Chapman

Mission Leader, Nationwide Building Society


Patrick Eltridge

Chief Operating Officer, Nationwide Building Society



Our first talk on this morning of day two is from the nationwide building society. The world's largest organization of his kind Patrick is responsible for all technology, operations, payments and data. And Jen is one of the three mission leaders. They will talk about their work and enabling an industry of driven by their CEO, how a successful working relationship develops between business and technology, the traits they look for in their leaders and how nationwide has responded to the COVID 19 health and economic crisis. I am so excited about this presentation for a number of reasons. First, Patrick and Janet are among the most senior people to have presented at DevOps enterprise summit, as they are both part of the top executive team. I think this is so important because it shows that the challenge is being discussed and solved here in this community cannot just be delegated away to just those technology people. It must be owned and fully integrated into the business. The other thing that I'm so delighted by is that Janet in her previous role was her chief auditor. As you may know, some of my favorite people on the planet are auditors. Please welcome Patrick and Janet.


Hi everyone. I'm Patrick. Last year at this event, we focused on our digital transformation, but this year standing on the shoulders of some of that prior work, we're here to share a bigger bolder society by transformation. So we're a larger older organization facing a range of challenges in these difficult times and for the past year and right through the COVID-19 crisis, we are pursuing a significant lift in flow. Pace of decision-making and agility in the business. Uh, business environment has been changing quickly for many years, but with the emergence of new digitally savvy competitors, a highly active set of regulators driving to improve competition and disrupt the incumbents and an economic environment with the lowest interest rates in literally 3000 years, leading to a significant compression of interest margins and therefore significant income pressure. And through all of that, the expectations of our members and all future possible customers have been growing as they embraced 24 by seven, anywhere, anytime banking, I've been calling it a hyper fluid and hyper competitive environment.


Over the past few years, we've been developing some agile practices, mainly in the it delivery space and mainly around change activities. The benefits have been measurable, but limited today we're in the middle of an organization wide pivot to realigning from a functional organization to one fully aligned to member needs all underpinned by much stronger agile and practices to bring, run and train activities together. And the long lived and multi-skilled teams, we call this our member mission operating model, and it's designed and implemented according to our ways of working business agility principles, which we've articulated with the help of John Smith and his team at Deloitte. We, uh, 16 million members of the world's largest building society. And as such, we're not a bank, but a mutual society that exists for the benefit of its members for 136 years. We've been focused on providing homes and building stronger kind of communities. Our profits go to the sustainability of our balance sheet and building operational capability and social purpose, and also passing on better savings and lending rates to our members. So we want to give you a little bit background on both of us and our journey to date before we get going. Janet,


Thanks, Patrick. I've got quite essential services and I've always really loved making stuff happen. Now that might sound a bit odd for someone who spent 20 years in internal auditor, but really that is a job that's about running short bursts of work that gather information about how things are working and then using it to draw conclusions and drive improvements. How you do that is just as important as what you do. And in my three years, as chief internal auditor at nationwide, I found agile really helped us with the efficiency of our work, but more importantly, increasing engagement with the people around the society. I'm now leading similar kinds of change in how we deliver service to our members at the times when they really need the most from us, Patrick,


My path with that child started in 2003 and a startup. And my first CIO role, we'd only been going a couple of years, but we were already in trouble with our traditional rational unified development process, getting slower. And buggier with each release, I came across Jeff DeLuca and feature driven development, and it completely transformed us since then. I've been learning about the complex and challenging journey of seeking the agility in larger organizations. And I'm still learning so enough about us. Let's let's turn to when nationwide finds itself today and where we think it needs to go.


So, as Patrick mentioned, where a society of 16 million members, that means we have a relationship with one in five of the population of the UK. One in every 10 pounds, Sage in the UK is with us. And when first part-time time buyers come to quantify a home, one in six of them will come to get a mortgage from nationwide. We also have 10% of the current accounts in the UK, and we've consistently the most switch to brand over the past several years. Our job is to be, be a home for your savings while you're saving for your home. Now, our members own us. We've got no shareholders and we don't pay dividends. But instead, as Patrick mentioned, we return value to our members through our pricing. And most importantly, we're known for our service and we are the UK most trusted financial brand. That's something that's incredibly important to us. And we paid very close attention to it. Our members trust is our most valuable asset. And part of building that trust is getting it right when we need to serve our members needs, oh, no, we're not actually a bank. We have been voted best banking brand by which a consumer advocacy magazine for the last three years. And we're very proud of that.


Now we're in a very strong position in our market, but we've no we've got absolutely no room for complacency. We've got a very simple if very large business and the competition around this is absolutely fierce. We've got four large competitors in the mortgage market from the UK banks. And there is also in every, every it's every market, a lot of challenges with great products and great tech entering the current account market. Now we've been around for 136 years, and we've got every intention of being around for at least another 136. You don't hang out for that long without adapting. And if you look over our first 136 years, things have changed quite a bit. And nationwide has got a good track record of innovating in developing products that meet members changing needs. So we were the first UK bank, uh, institution to offer a current account with interest.


And as we've adapted into the changing world technology world, we introduced the first UK internet bank, but it's not only what we do needs to change to reflect the changing world, but we need to change how we operate. We're an organization that's developed structures and processes that have served us really well, but they tend to involve moving change to quench lead through functions. We deliver well and reliably, but slowly we need to get to start from finish more quickly and to surprise and delight our members, not only with the quality of our products and services, but the speed at which they're delivered.


So why do we struggle with pace and flow as Janet just described? Nope. We've seen that multifunctional teams with a shared purpose can get things done much more efficiently. So why is that? Well, as you, as you all know, from the way work typically gets done in most large organizations today, it's the result of years of evolution, right? Specialist functions gathered into departments, work passing between them know with cues of all sorts right throughout the organization. So currently when we process a mortgage application, for example, it gets broken into parts amongst all the functional teams. We all do our bits and then we reassemble the outcome, test it, to see what we got wrong, and then to see if it meets the needs of the member and then fix it when it doesn't. And when we want to improve performance or reduce costs, we seek to improve the efficiency or reduce the capacity of the teams of individual specialists.


What that way of working doesn't do is optimize the flow of work to our members from beginning to end, right across and through all of those teams across the society. So what do I mean by optimizing the flow? This is where we first make it really easy for the member to tell us what they want, the way they want to tell us. And then we bring all of the people and the tools that are required to make that need together into a single team. So they can all see all of the work and organize themselves in a way that smooth the path for the work and optimize the delivery of the work in a safe, controlled, and sustainable manner. And if a bottleneck does appear, they just add people or change the process to remove the bottleneck. They don't just add a queuing mechanism as a first response to that.


As this approach matures, we find that throughput improves dramatically and ops digits risk and quality improve, and importantly costs fall away. If done well, you can get much more work done and more value delivered from the same people. Or you can get the same work done with far fewer people. You have the trucks, I've seen some amazing outcomes from it. Customers getting much better outcomes, employees enjoying that work far more. It's a tough journey to go on. And it requires everyone's commitment because it cuts right across a number of approaches that we've spent many years refining, but at this stage, continuing to do what we've been doing. I will not take us forward in the environment that we've described that it's time for a change. So the good news is that we've already identified exactly what our most important member needs are. And these are our member missions.


We've appointed leaders, including Janet and we've identified many of the members of the mission leadership things, where we're well down the path of giving the missions, their own shadow, balance sheets, and evolving the governance structures also. And very importantly, we've made the most of our current COVID crisis to mobilize and accelerate the standing up the missions even before they're fully formed. The even better news is that we have in many ways already started working this way at the start of COVID lockdown. Uh, our call centers were quickly swamped to, to staff absences. Uh, we needed to enable contact center colleagues to work from home and for branch colleagues to take member calls, to relieve pressure. Uh, we've been talking about doing that for years, but it would have taken about nine months and cost in excess of 10 million pounds. So it never got done with an urgent need to reduce call center volumes.


We got everyone around the same virtual table and they figured it out in real time. How to enable an agent to work from home that took about four days. Then we wondered if we could direct calls to the branch network. Someone said, we can't because we can't do call recording. So we only directed calls that didn't have a regulatory need for corporate reporting, which helped a bit, again, that took about four days. Then after the weekend, we solved the call recording for branches to another four days afterwards, I asked the team how many corners we cut? How many policies we breached? How many security holes we now have to plug them? I looked at me and said, well, no, we had all the specialists we needed to do it properly right there. We stuck to the policies it's secure. It's fine.


So when everyone you need is aligned on the most important task at the same time, you get real pace and real collaboration on solving problems. That in essence is what a mission is to us. We're aligning the people from the functional teams into these missions and their underlying value streams. We're evolving governance and financial management to support local decision making and continuous funding, persistent teams we're integrating run and change activities into these long lift teams to enable continuous improvement of the work. And we're applying systems thinking to identify a number of faded amount from these funders. I think of agile as our means and dev as our target. This is very much a work in progress, and we're consciously allowing the issues and opportunities to emerge as we work to implement this. W we're not following a template of approach. You will know this already, but I must emphasize that it is the most.


It is most important for people to go on this journey of learning and unloading often with coaches, but not having the answers habits by some central team of experts. Choosing the mission leaders was an absolutely critical part of this. And I've observed from past experiences that starting with choosing the leaders in a transformation like this is absolutely critical because they have to describe the call to action that they need to attract the right people into the teams. They need to be able to paint a very clear picture of the journey and the challenges ahead. So when we looked for a mission leaders, we were obviously looking for a bunch of characteristics such as learning adaptability, no sort of fixed mindsets. We're also looking for people who are sort of instinctive servant leaders with a very clear coaching mindset and an enabling mindset. And obviously not people who evidenced command and control leadership.


And of course being the society that we've talked about and a mutual, we have a very strong values based identity and having people who would be a constructive part of that value set and also understand the role of a neutral in wider society is a really powerful accelerant to that. Um, uh, and in choosing, uh, Janet and, uh, Rachel and Paul, you know, we've got outstanding leaders who embody all of those characteristics and, uh, and our natural magnets for talent and capability in the organization. And they give people the confidence to go through this journey, uh, while there's still a measure of, of ambiguity, uh, in, in how it's all going to work. And so far I'd have to say, it's, it's going brilliantly well, and the team that we've assembled there are, uh, incredibly energetic in, in leaning in to paint a very clear picture of what success looks like for everybody that's falling out of the mission teams.


Well, of course I have to say, I hope I embody all of the things that Patrick just described, um, as quite a tall order to live up to. Um, as I was thinking about whether this was a girl or a role for me, um, I was very excited by a lot of the things that Patrick just described. Um, and the fact that it actually drew on a lot of the background that I developed as an auditor, where you get a fantastic and, and view of an organization. There are a few people in the organization who get to see everything that happens across an entire organization. And that's something I'm able to bring to bear into, into what we do, um, as a, as a mission leader. But I think one of the most important characteristics that I, I want to bring to this role is that I see my job as a facilitator, somebody who helps other people get done, what needs to get done, um, and that it's by building relationships and building channels and capabilities and allowing people to do what they're really good at that we will get to the objectives that we want.


And so that's what I'm trying very, very hard to bring to the role today.


And I have to say also on that closing that point, uh, the track record of behaviors that, you know, Janet accepted in building, what I would have to describe only as the by of scarily officials or the department I've ever worked with in 30 years, um, played a large part in this. Um, so that was an incredibly effective and visible adoption of our child working in a business team. And this genital describe, we have some particular challenges ahead of us.


We have to finish a sentence quite rightly, very highly regulated. We look after your money, that's a huge responsibility. And one that we take very seriously, it means that we have a lot of rules to comply with. Um, with many of the ways we we've many ways have developed to ensure that we progress carefully, um, through all of the steps that we need to comply with all those rules, as the change, as we changed the way that we work, we need to be absolutely sure that we don't undo any of that regulatory compliance or fail to meet those needs in the future. But there's another very specific aspect of the way that we're regulated, um, in the UK, which is a particular requirement of our regulators, that we can point to a single point of accountability in our leadership. Uh, it's called the senior manager reasoning, senior manager's regime, and it has specific accountabilities attached to specific roles and expectations that people holding them. So those functions can explain exactly how and why decisions were made. That gives us something to think through very carefully, as we transition into our mission model, that was a possibility we could dilute some of the expected focus and accountability, and it's something that we're stepping through very carefully to make sure we don't lose that focus as we empower teams and distribute some of the decision-making further amongst those, um, those self-organizing and self powered teams.


Yeah. And we've got some very specific challenges with our environments to now, over the years, we outsourced a lot of that technical work and platform support, and we are now hiring and rebuilding a full stack engineering practice. And yes, you all need to know a lot about that. Cause we're hiring over a thousand, uh, engineering practitioners and we're building a new technology hub here in London, in Holton. Uh, we were not early to adopt public cloud and we've only now recently started deploying new workload there. Now having built a cloud center of excellence from scratch this past year, uh, we have a complex systems architecture and the beginnings of a modern web services and API ecosystem. Uh, and Hey, that new building and open in the middle of London. Yeah. Timing is everything, isn't it.


So we've laid out some of the principles here of, uh, that we found hold true for us at nationwide. When you, when we think about how we're going to make ways of working work for us, you have may found that there are others that are more relevant to your organization. And that's absolutely okay. As the great Groucho Marx said, those are my principles. And if you don't like them, well, I've got others. What's really important is that you understand your own context and work without my own experience, I'm really enthusiasm for changing. Our ways of working was really born out of my experience. Um, sponsoring a change to agile, uh, change, uh, to agile. As we ran our audits nationwide, it was a really great experiment. And I really mean it was an experiment. I learned a huge amount about how to lead through change, how changing the way you engage with the work can change the way you feel about the work and how much you can achieve when you've got the confidence to allow others to lead.


We decided not to have, um, consultants come in and tell us how we should do agile. We decided we could do a good job ourselves, and you'll have a chance to hear from Ellie Taylor later, who, uh, led that that whole enterprise and really showed us how far you can go with the right engagement, empowerment, and support. One of the things we learned very quickly in developing agile for audit is that context is really important. Auditor's love process. They thrive on it and there can be quite a serious and sensible bunch who liked things to be described in language. That really makes sense for them. We found a lot of agile turnout terminologies with just a really big turnoff for our auditors, and it was becoming a real barrier to adoption. So we changed the language, stay true to the principles, but put it in words that meant more to folks and allowed things to go more smoothly.


Now, in our recent experience in standing up the moments that matter the missions were really discovering that power of empowerment and the power of having the right people in the room at the right moment in time, as Patrick explained, we've had to do a lot to adapt and change very quickly to meet our rapidly changing member needs when the pandemic hit and the new ways of working the flow we're creating really, really helped. Um, when the UK went into lockdown about three months ago, it was clear that people would need a lot of support while they weren't able to go to work. They needed the security that there'll be safe in their homes, and to do that, they needed to get in touch with us and make payments, arrange arrangements. In many cases now on a normal non pandemic day, we might get a couple of hundred calls.


Um, as, as locked down started, we had 55,000 members calling in in the first few days and we needed an online solution really, really quickly. So using our mission structure, we pulled together the right people who could make the decisions quickly. And our technology organization was absolutely magnificent in delivering an online journey in four days, making us the first amongst our peers to have that and really making life easier, uh, at a difficult and worrying time for our members of our colleagues. I've also got a representative from Patrick's organization who sits on my leadership team. He's our CIO, and he's a critical member of the team. He facilitates and coordinates across the whole of the it organization and managing the flow of work and coordinating all of the backlog. I, we wouldn't be able to do what we're doing without that particular capability right in the room with us.


So we're evolving to the Berkeley from, uh, get it right first time and fixed scope and milestone mindset to a culture of experimentation and incremental delivery informed by outcomes and chaos. And we are rewriting our governance frameworks, and the way we continuously standing teams, radical projects, we're rebuilding our measures and metrics around the better value, sooner, safer, happier framework. This will be a key lever to change our culture, and this should go down well with the society because in 1943, our motto was sympathy, simplicity, and speed. Probably the hardest part from my perspective is staying true to the invite over and flex principle. Now, when I already know that this can work and we have a certain urgency about,


Well, you know, change is really hard in most organizations and nationwide, it's no difference. Um, but we've got a really long history of adapting and thriving. Um, and we have the great advantage of being guided by really clear purpose. Um, at the moment we need to be hyper responsive and we've seen what we've seen ourselves being able to do over the last three months has been an incredible catalyst for the kind of change that we need to make permanent and part of the way that we operate from here on out.


Yeah. Thanks channel and ask for the help we're looking for. As I mentioned before, we are hiring, you know, we, uh, have had too much outsourcing over the years and this technical skills we're left with mainly reflect, uh, heritage organization. And we do have a nice build out of a digital organization with an engineering sense, but we need to go much deeper and broader and wider. We're looking to build out a delivery organization in excess of a thousand people, uh, in that, uh, brilliant new building that I described earlier that we've, um, recently sourced and hold them in London. And we must be just about the only financial, uh, organization in the country. That's actually opening a new building at this point, relative post COVID lockdown work from home world, but we know that this is still going to be in the central part of that proposition going forward.


And we will need this brilliant new collaboration space, uh, in many, many ways coming forward. We're also probably the only financial services organization in the UK that doesn't already have an over density of technology staff in London, because we are headquartered in Swindon, uh, outside of London today at a few other small areas. And we're the largest employers in those areas and have largely saturated them. And we're looking to build up a much broader and deeper engineering practice in London. And so we're looking for cloud engineers, uh, you know, specializing in open shift, uh, with the full range of AWS and Azure services experience. Uh, containerization is going to be really important for us because it's sort of workloads we're putting into public cloud. We're looking for DevOps pipeline engineers, uh, with Jenkins Ansible, puppet, chef experience, et cetera. We're looking for test engineers, particularly those experienced in test driven development and automation, uh, social driven testing, et cetera.


And we're looking for software engineers in Java, JavaScript, Python C-sharp C plus plus for some applications as well. And of course, full stack developers, um, who can execute effectively in react frameworks and other tool sets like that. I would get right down into the, the cloud engineering, uh, depths, and also be able to build an effective API ecosystems frameworks. Um, as we move into things like open banking in a much more exciting way, tell us where we're at time. Um, in closing, I'd say that I wanted to be honest about all the challenges we will have to overcome on this journey. It won't be easy and it won't feel natural to a lot of people, but I also believe we have some strong winded ourselves to now our team in nationwide is absolutely passionate and committed to the needs of the members, even if we're not yet fully organized to reflect that.


And our status as a mutual affords us the space to do the right thing in the right way for the longterm sustainability of the society and the communities with support. We also know that we have to develop a modern approach to neutrality. Now it's not just about being nice. It's about creating a highly energized and focused working environment, giving people clear purpose, enabling them to add value with pace and agility. And there's no doubt that this is a critical moment in time for nationwide to do this. My deep, thanks to you, Janet, for joining me today,


It's been an absolute pleasure, Patrick, and we're looking to the future. We're balancing our inpatients to get this done with our patients to get it right. And thanks everyone for listening.