00:00:14

I hope you have been having an amazing day one so far. So the next speaker is Brody McDonald, general manager of the pace operating model at ASB, the second large, a S B the second largest bank in New Zealand. She leads their operating model transformation and reports to their executive team. She will be co-presenting with Jane Fitzgerald, our partner at Deloitte about their four year journey together from the very inception of this effort to the current time and the amazing places it has taken them. I love this presentation because they speak so eloquently about their desire to create the conditions and mindsets that favor, pace over perfection, being customer obsessed, trust and transparency and empowerment over control, like their presentation earlier this morning from the team at Virgin media, oh two, I so much love the testimonials that Brody and Jane share that provide external evidence that important people value and appreciate the work they are doing. So here is Brody and Jane,

00:01:18

Thanks so much for Jane your I'm Brody McDonalds. Thank Kia. I'm Jane Fitzgerald, and we're really excited to share our journey today around the pace program that we've been working on for the last four years, as Jane said, we're coming to you today from New Zealand or, uh, we're a small island in the south Pacific with approximately a population of about 5 million. Our borders have been closed for the last two years though. So it's been really hard to access our beautiful shores. Um, and we're really excited to share the journey beyond our shores so that we can start to share our story. So I guess a little bit about who a SP is. We are a full service bank here in museum, so we cover everything from retail services, private banking, wealth insurance, business, and C. So we've got about 5,000 people who work here as part of our ASB T who are supporting our customers to accelerate their financial progress.

00:02:17

We've been around for 175 years. And in fact, this year in June, we're celebrating our hundred 50, 75th year of serving our communities. So it's something we are really proud about is our culture of innovation and challenge. Some of the things that we've recently launched include clever, a digital mobile mini box for, uh, children to be able to save. And one of the things that set us apart at the very beginning is that we are the first to launch online mobile banking world. So after 175 years of serving your customers, we're really looking about what next, how can we continue to keep our customers one step ahead, the world that we are working in the world, that our customers are trying to accelerate. It's changing. We've got new entrance to the New Zealand market. So we are seeing big tech FinTech. We're seeing, um, Google come down, we've got cave and we've got customers that are starting to look at services and fragmented service act.

00:03:20

We've got some amazing innovation, uh, happening globally. And we know that in New Zealand that will come to us soon as well. So really what we're trying to do is think about the environment that we're operating in the way that we can continue to deliver our strategy, that will help our customers stay one step ahead of any change in environment that can away. So what was our answer to that? Our answer together with Deloitte and ASB was a rule around pace. So how do we help people accelerate customer experience? It was how do we move people to focus on customer, come together in cross functional teams and deliver great experiences that we, we needed to do to be able to face up to the challenge that Brody talked to it's really important. And it was a key message that, um, me as the transformation lead, but many others had to reiterate a lot at the start of the, the work together was pace was never intended to be a program.

00:04:18

It didn't have a defined start and it didn't have an, yet, this was an evolution of the operating model and the way of working for ASB. And there's something we used a lot a slogan, which we talk about, which is we were changing our BAU, not our DNA. D the DNA of the bank was really ingrained. The culture had been super successful over the 175 years. And we wanted to put that at the heart of this new way of working, but actually the practices that we had were not being, uh, useful to us and the way that we worked. So there was multiple handoffs between departments. There were unspecified or lack of customer intimacy with some of the products and services that were getting brought to market. There was friction with some of our risk and regulatory teams, as well as added demand on that.

00:05:08

Um, those areas that the pink just couldn't keep pace with. So pace was all about creating a sustainable rhythm and cadence for the organization to be able to shift into the next year. Um, so I think that the messaging is really key, but also it was never meant to be a one methodology. So we were really focused on how do we have a pragmatic and practical application of agile lean DevOps and human centered design into ASB to make sure that they could make this their own. Um, and I think that that's something that we worked really hard on, bro. Um, and, you know, we focused on other things like mindsets, which gave us the commonality and the way of working that everyone could understand rather than tool sets. So I think one of the things that James kind of touched is as part of that, um, keeping the things that make our D um, unique here at ASB, we were building on previous implementations and experiments that we'd had across.

00:06:08

We're really fortunate that our digital tribes have been doing amazing work over the last five, 10 years. Been looking at ways that they can deliver value for customers. So they safer, we hit a crack in our technology teams about doing the same, how do we bring squats and cross-functional teams together to be able to deliver for our customers? We hit a new executive team that came on board with our CEO, Victoria Short, and they were really interested, engaged, and curious about how we could continue to do things better. So one of the things that we did was we, we looked at some of the best in the world. So we've seen presentations at global DevOps conferences before about the ways of working that different organizations had set about and the way that they've implemented them and their companies. We took all of the things that we had seen that worked here at home, as well as what's working internationally.

00:07:00

And as Jane said, created a way of working, that was unique for a, B, we kicked off our pace journey, uh, with a transformation tribe. So we worked in the same way that we were expecting the teams to go on and continue to work with going forward. And I think that's one of the proudest moments is that we our own throughout the entire journey. Yeah. And maybe if I bring to live some of that journey. So, um, the transformation tribe was a, a partnership between Deloitte and ASB. And one of the things that Brody started with around the purpose of ASB being accelerating the financial progress of all new Zealanders, we were really deliberate about building capacity and capability in the New Zealand market for talent. So the transformation tribe was envisage as a way for us to help teach upscale and build the capability so that actually the bank could then take that talent as well as Deloitte, as we took that talent and grew our, our enterprise agility practice across the New Zealand market.

00:08:02

I think some of those tools as well, that you were talking about in terms of the ways of grouping, you know, we've experienced human center design, and we've worked with them in a while. So here at ASB, but really the opportunity for us to learn some of the skill sets, agile ways of working, um, and bring those together to create a way of working. That's unique for us is really part of what I think stood out across our journey, my team, the instance, um, here at ASP, I have ways of working coaches. So they bring together H C D lean agile and project management, change management, and those skills to help our teams our strategy better. So I think it's always really interesting. Everyone always goes to what's the model. So we could talk a little bit about actually the type of changes that we've, um, introduced into ASB and what's working really well.

00:08:53

And some of those success stories, Brady, um, essentially there are five tribes and they are customer outcome related tribes. Uh, and then there are eight platforms that support those tribes as well as a number of practices. And the practices are really the home of craft in the bank. So think marketing risk, uh, product, those are the, the homes or practices. The change though was much more holistic than that. This wasn't about an organization design lens that we took to it. It was organization design to help promote, reduce the handoffs, but it was also the people side of change. And that was critical from the very beginning. So maybe at the, should I talk about the start of the journey? Um, the start of the journey, uh, kicked with leadership alignment. So we essentially got the new executive team together and we started talking about what could be one of the things we really wanted to do was center this change around how can we execute our strategy and be better, sooner and safe for our customers and our people.

00:10:02

So we talk about better for our customers. We're looking at things like our NPS. So what is the net promoters score? How do customers feel about the products and services that we have? And what we're trying to do is we are measuring in our tribes, our customer facing teams, to understand when we launch products, is that having a positive impact and what could we do to continue that journey? We think about our people in the same way we use an E N P score. So our employee net promoter score, and at ASB, we're in the top 10% of all financial services institutions globally for that score, our people recommend our products and services and recommend ASB as a place to work alongside better for customers and better for our people. We also talk about delivering value sooner. So that's not necessarily about speed to market.

00:10:54

It's not about getting more through the pipe quicker, but it's about making sure that we are regularly delivering value for our customers. So taking the opportunity to do quarterly releases, taking the opportunity to seek how do we continue to evolve and make sure that there is working at tangible product and service in the end of our customers sooner than before. Another thing for us in financial services. And one of the things I think we grappled with at the start of our agile journey, we own a service to our government, to our regulator and to our customers to keep them safe. And we are looking after billions of dollars of customer money. And so making sure that everything we do is safer in terms of the approach we take internally, but at the end of the day, protecting our customers, that's a really important part of our balance scorecard.

00:11:45

So throughout the journey we've been thinking about better, sooner, safer as our mantra for how we measure our success here at ASB. Yeah. And I think it would be really nice Brody if we could share a little bit of the kinda key wins, um, that we can talk to around better, sooner, or safer, and how it's actually resulted in significant change and delivery of outcomes for the bank. So I think one of the things I'm most proud about, um, connected to our purpose, um, we have an area inside our bank called financial wellbeing. So we know that helping customers every day, rainy day in one day and supporting them their financial goals is a really important part of how we, the guidance and to help S one of the first pioneers that we stood up was called my financial wellbeing. And the aim was through that side to see if we could test and get something to market.

00:12:38

Um, we've worked through, um, a number of different products and services and support offerings for our customers, but through COVID one of the biggest things we worked really closely with our, uh, teams on was launching what we call support finder. It's part of our a and part of our banking service for all of our customers, to be able to see what government benefits they might have available to them. It's been up and running now for 12 months through COVID and really, really pleasing to see that our customers have been able to access over 10 million of additional benefits. So this is money that was available to them, but they didn't know that they could get. And so through a really simple questionnaire and then a direct link through to our government service websites, we were able to support our customers to get the financial benefits that they needed when it made most.

00:13:29

So that for me is a way to say, how do we put our customers at the heart of what we are doing? How do we connect our people to the purpose? How do we deliver value and a way that helps our customers when they need it sooner and in a way that is safe for everybody here. So that's one of the examples of what I'm really, really pleased with being able to do. I think for me, um, the better for our people was another really core part of what we were doing. And the mindsets that gene introduced at the beginning Brody can talk to a little bit more about how those are, are used and come to life in the ASB kind of daily operations. But, um, the sign for me was when actually it was the pace operating model, wasn't the whole bank, it was 1500 people of the 5,000.

00:14:14

And actually the rest of the bank then said, Hey, we wanna get in on this. We wanna be part of it. And so the journey became a bit of a snowball effect, and now the mindsets are a key part of the culture for all people at ASB. So we set about, um, we've always had really strong values here at ASB. And so when we think about our values, we think about those as the heart. But when we think about our mindsets, those are the head. And it's a combination of both the, those things that are helping our teams make really great decisions. So we knew that stepping into this new way of working, we were going to have to adjust our mindset. And some of the things you see up on the screen will be familiar to many who are, uh, I guess, regular readers at the agile manifesto.

00:14:56

We talk about customer obsessed. So making sure as Jane said, everything we do comes back to customer. The reason we are here is to support those customers with guidance, advice. We talk about pace over. Perfect. So that's not about whizzing through and just delivering without the perfection, but striking the balance between speed and perfection about pace and seeing what's the right pace job. You know, it's about checking in to see, um, is it quick and dirty email, good enough? Or actually, do you need a slide deck that goes with that and helping our teams to start to balance those two things in their way of delivery, learn it all over? No, all massive, massive thing for us stepping into a new way of working. Um, the biggest thing for us in that is that we will not know all the answers. And particularly when we set about delivering the pace way of working, there are things that are gonna work and there are things that aren't going to work and we'll touch on some of those later, but finding a way to learn through that journey, admit when you dunno everything and seek to understand more was a really important part for us.

00:16:02

Empowerment over control is probably the fourth one that I'll touch on. So for our leaders in particular, this was a different way of thinking about how they have progressed. Historically, we have had a hierarchy. We've had people that have been able to direct teams of, uh, individuals that are working below them in a way that helps to deliver to our strategy. Part of our pace, ways of working was about empowering the person closest to the customer, closest to the decision to make the, and actually our leaders became very much those that are clearing away, the great UN blockers and the Scriptor of glitter is what we talk about. You know, they're there to remove impediments for their own team and to give them the context and the celebration that they need, that they're on the right track last, but certainly not less trust and transparency as we went about setting up these mindsets.

00:16:56

One of the other things we were looking at is our tool sets. So how in a virtual environment, do you create transparency in the work that we are doing? We've chosen to pick a system that enables all of our teams to connect and see the work they're able to link to each other and have transparency of dates, delivery, and dependencies that they could happen. Um, so those five mindsets I guess, have really become chief for us. So as Jane said, whilst they started in paces, they're actually now part of our, a Bula and we use them on a regular basis to reward, recognize, and celebrate great behavior. So we've introduced better for our customers, better for our people. Now I wanted to bring to life a little bit around sooner and Brody talked about it when she mentioned empowerment over control and the importance of that mindset, actually a key part of this was how do we get the leaders on board?

00:17:48

So it was a new executive team that we've already talked about, a relatively new CEO, and we needed to make sure that they were behind us every step of the way. So what we did is that we set up a group called pace six, that was the six key leaders of the executive team who had the most at stake. So they had the most members of the team that would be impacted by this change, or they were the most interested and keen and passionate. And we brought them together on a three times a week basis. So a lot, um, and for any transformation or change leader, you know, that being able to keep pace with that type of, um, cadence is pretty difficult, but they were there not just to come in and make decisions. They were there to support sometimes with a bit of emotional support and they were there to help us test ideas.

00:18:35

So it wasn't just a bring us fully formed decision making guidelines. It was a bring us some concepts and ideas and we'll thrash them out and help you build your thinking. Pace. Six was, um, critical to us getting the wins on the board early in the, in the life cycle of the transformation. What happened though? And it's really interesting when I reflect is that others opted in. So we started to see another person and then another person. And we ended up with nine people in our pace pace nine group. And that was really them seeing that the decisions were getting made. And if they wanted to be part of it, they had transparency of what the decisions were, but if they wanted to be part of it, they needed to opt in. So what they did is they started coming along and they started partaking in the discussion, getting their thoughts in there and helping us get a more holistic answer to the things that we were discussing.

00:19:29

It was a really, um, a really good way of getting momentum quickly and going with the people that were supportive, but then also being really open and willing to bring others on the journey with us as we progressed. And maybe if I then flip into what's the biggest learning, or one of the most difficult moments for me in the 18 month journey that I had, um, it was when we were in a, a group retro retrospective with the tribe. So about 50 people in a room sharing the reflections on the previous quarter, the pace six team came in and they shared that. We'd been number two in the prioritization list of all of the projects at ASB. And they'd been in a ELT session and we'd shifted from number two to number 26, the whole mood of the room dropped. As you can imagine, we were the second most important priority.

00:20:21

And now we are 26. You mean it was, um, it was a low point for sure. It took us one week and we got back up to number two. Now, how did we do that with a lot of hard work and a lot of conversations, but the key message that resonated with the executive team was we can't afford to not do this work. This is the work that helps us deliver the next 10 priorities in the program. So yes, I can understand. Number one, that was a regulatory driven milestone that the bank needed to deliver to keep safe, but everything else we weren't gonna be able to achieve if we didn't focus on our way of working. So pace was the enabler. And I think that's really shown through still now in the way that we think about the pace program. So evolution of it today, to how we run it is really paces our way that we execute our strategy at ASB.

00:21:14

So it underpins our way of working and all of our projects be that customer experience, regulatory, anything we do here, we can do what our Lifeways at work. And it's something that we're quite proud of, I guess, the journey that it's now just part of what we do and part of our DNA. Yeah. Yeah. And then, should we talk about safer let's? So, I mean, I'll probably give a little bit of, of safer in terms of how we execute it and how we helped the bank actually shift into the new ways of working. And maybe Brody can talk a little bit about safer and how it comes out today in the new way of working. Um, for us, we were moving to this new way of working. It was pre COVID. So that wasn't a thing yet. Um, and what we were saying is we needed to make first significant moves.

00:21:58

So we wanted to experiment, but we didn't want to say that we were trialing this. We didn't wanna be rolling back our changes because we believed that what we were doing was the right thing for the bank, how we did it, the tweaks we might need to make to the mindsets, to the tool sets to the skill sets. Those were all up for negotiation and change. But the fact that we were moving was not up for negotiation. So what we did is we launched two pioneer tribes. Uh, there was about a three or four month, uh, break in between those. And we learned, so we focused on what were the retrospectives? What could we learn? How could we change the employee experience of moving into one of these tribes? How could we help our leaders better as we transition them into new roles? How could we support the rest of the organization to be able to understand the change so that they could support these tribes as they started to establish themselves.

00:22:52

And that led us to keep and keep, uh, changing and evolving the way that we stood up the tribes as they continued to continue to scale through the rest of the bank. And I think that was a, that was a key, um, success criteria for me when I look back and I think about, you know, we ended up standing up five tribes and eight platforms, but the experience continued to improve throughout. Yeah. And I think one of the things that we learned through those first pioneer tribes is that some of the processes that we had inside ASP weren't necessarily fit. So finding ways that we could get our controls and our governance to fit both models. So ensuring that we were safe, but also ensuring that we were able to do those things in a way that worked and kept speed. Um, one of the big deliverables that came out of our program, I guess, is our, um, new delivery framework here at a spade.

00:23:42

So through that we have six key control points that our teams work to. Um, they've got standard delivery documents that come through each part of that process, but it helps make sure as we go along, we have got a, and are able to account for the work they're doing and make sure that it is in adherence to our protocols and policies here at, as we look at the sense of this helps us to build in compliance by design. So making sure that the process that people follow is step by step, takes them through. And that there's nothing that they're gonna get hang up on or miss out on by not knowing what the process is. So it's a really exciting part of what we've been able to do in change and way that we work here at ASB. And I think that maybe the final point around, um, safer is actually the, the aligned cadence across the bank.

00:24:31

Yep. So we move to increments where everybody is on the same increment, and that has created the ability for us to have prioritization discussions across the tribes and the platforms and the rest of the bank in a really aligned and synchronized way. And it sounds simple, but something like that I think has probably delivered the most value. So I think aligning to those increments has given us the chance to have those transparent conversations between the teams, one of the gotchas, I guess, and one of the learnings. And one of the things that we are still working on today is how do we align our funding model to this new quarterly approach? So at the moment, we are looking at persistent funding and understanding how we can get team based funding into our processes for next package year. So I guess we are continuing to evolve as we learn more about how we can support our own teams space.

00:25:20

Yeah. And I wonder if we talk about the biggest learning in terms of the winding down of our first pioneer tribe Brody. So we were on different sides of the fence through this, um, experience. I was in the transformation side of the coin and Brody was in the first pioneer tribe. But, um, essentially when I talked about experiments, we actually ended up deciding that the first pioneer tribe that we set up was not a long lived purpose. So the purpose was long lived, but the delivery vehicle needed to be federated across the whole bank. It was everyone's responsibility for financial wellbeing. And so we had to say, start six months into their journey. Actually, guys, we are going to wind down the tribe. We're going to invest in financial wellbeing for everybody. And we're going to have five instead of six tribes as we move forward.

00:26:09

Um, it was a pretty hard message. It's a balance to be able to keep the, the communication to story, tell that financial wellbeing was critical. It's also to say that pace and the way of working was still critical and we still believed in it, but we were bold enough to be able to say, actually, a tribe, isn't the right delivery vehicle for this stream of work. And I think what we saw when we stood up that first pioneer tribe of my financial wellbeing is that the squats that we had inside that tribe, we were able to move those people that had put the end up that were willing to go with us on the journey, into the other tribes. They were able to bring me ways of working their experience from having been in this way for six months. And actually, I think that's been really successful because it's brought those people from that first part of the journey.

00:26:56

And it brought a whole lot of experience into teams that otherwise were taking in their first step in that space. As Jane said, financial wellbeing is the responsibility of all of our tribes here at a B. And so by taking the step to move from one centralized team to a decentralized way of delivering that, I think it goes alongside our learner all over now, it all, and, um, continuing to experiment at groups. So one of the things, when we said about designing pace was we had the chance to learn from one of our sister organizations, Ben quest, over in Perth, Australia. So they had taken this journey about two years before, also with Deloitte looking at their ways of working, we were able to see what worked there and what we were able to bring into that New Zealand context. One of the most exciting things.

00:27:44

And one of the things I'm really proud about now is actually our parent organization, Commonwealth bank of Australia, based out of Sydney is looking at the same pace journey. They're seeing a lot of the same things in their environment and are taking some of the work that we've done here in New Zealand, on our mindset, skill set and tool set. And we're collaborating with per, with bank west, with Sydney, with CBA, and really starting to develop our own way of working that we can share. We're looking at things that are unique for our context and keeping those, but where we can scaling the things that have really worked across our businesses. One of the other things I think is really big proof point of, uh, the success of pace here at aids being, um, every month I get the chance to go to our forward. There've been an amazing group of stakeholders through the whole journey, and we've taken them on the journey from how we develop pace, how we are rolling it out, how it's going, and now we're talking to be remarked for that, how we, so we have a ate value showcase, which we take through a showcase, real live working products and services that our teams have built.

00:28:48

Our CXOs, our tribe leads. Our practice members are the ones have fronting our build, which output, which gives them a chance to celebrate and recognize the work that they've been doing in delivering for our customers. So it's a really nice way to see the tangible outcomes has created. So where are we now? I look after the pace operating model here at a, so our way of save. So save, there've got three parts of my team. So I've got a team that looks after the operating model itself. So we are finding the impediments to delivery, to flow and working to remove those. So as we touched on earlier, persistent funding is one that we're looking at right now, finding a way to be able to ensure that our funding mechanisms matches our delivery mechanism. I've also got capability and culture for some of our anchor roles.

00:29:35

Our product owners is part of our Mo called customer experience owners. They see sellers a key for us in delivering value to our customers. So we wanna make sure that we are growing and supporting these people. So we have built a program around them to help teach them skills that they need for their role today, as well as the skills that they're gonna need for the future and this model. But we also have our ways of working teams. So my coaches, they support an HCD, lean and agile ways of working across our platforms and across our tribes. So these parts of our model continue to evolve and, and help everybody continue to out the way to work. And I think it's worth just touching on why we're here. Um, we started by saying we're a small island in the south Pacific. And part of our, um, part of our, why we're here is that we wanted to share the story beyond our shores.

00:30:28

Some of the, the work that our teams have delivered is world class. We want them to realize that and understand that. I think, um, there are some areas that Brody's hinted at that we are still really keen on learning and sharing. So persistent funding is definitely one. Um, but really we just wanted to give our teams the chance to see themselves in an international setting and reflect on the work that they've done over the past four years, which we think is pretty amazing. Yeah. So really it's just a chance to celebrate where we are to share and really to be able to learn and continue to with everybody else. So hope it's interesting and hope, little more into the.