When web and mobile technologies disrupted the banking industry, consumers became more and more aware of what they could do for themselves. They quickly embraced what Ralph Hamers, CEO of the global banking group ING, calls “banking on the go.”

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By 2014 about 40% of all interactions with ING retail customers were coming in through mobile apps. (Now the figure is closer to 60%—and branch visits and calls to contact centers have dropped below 1%.) Even then mobile customers expected easy access to up-to-date information whenever and wherever they logged in. For instance, someone who started a loan transaction during the train ride home from work wanted to be able to continue it on a desktop that night. “Our customers were spending most of their online time on platforms like Facebook and Netflix,” says Hamers. “Those set the standard for user experience.”

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That meant ING needed to become nimbler and more user-focused to serve its 30 million–plus customers across the world at every point in their financial journeys. So Hamers worked with Nick Jue, then the CEO of ING’s Netherlands group, to launch a pilot transformation in the headquarters of ING’s largest unit, its Dutch retail operations. The first step was to help other senior leaders and the board envision a new agile, team-based system for deploying, developing, and assessing talent. (ING had already adopted agile and scrum methodologies in its Dutch IT unit, but those ways of working were new to other parts of the organization.) Hamers and his leadership team then met with people at tech companies they admired, learning how their talent systems enabled better customer service. By the spring of 2015 the headquarters of ING Netherlands, home to some 3,500 full-time employees, had replaced most of its traditional structure with a fluid, agile organization composed of tribes, squads, and chapters.

Thirteen tribes were created to address specific domains, such as mortgage services, securities, and private banking. Each tribe contains up to 150 people. (Employees in sales, service, and support functions work outside this structure—in smaller customer-loyalty teams, for instance—but they collaborate with the tribes.) And each has a lead who establishes priorities, allocates budgets, and ensures that knowledge and insights are shared both within and across tribes.

The tribe lead has one other critical responsibility: to create, with input from tribe members, self-steering squads of nine or fewer people to address specific customer needs by delivering and maintaining new products and services. These squads are cross-disciplinary—typically, a mix of marketing specialists, data analysts, user-experience designers, IT engineers, and product specialists. One squad member is designated the “product owner,” responsible for coordinating activities and setting priorities. The squad stays together as long as is required to meet the customer need from start to finish—whether it is, for example, improving user experience on the mobile app or building a particular feature. Some tasks are completed in two weeks; others might take 18 months. Sometimes the squads disband and the members join other ones. Most often, however, squads that are working well stay together and move on to address other customer needs.

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By working in such small units and with colleagues from various disciplines, squad members can quickly resolve issues that might previously have bounced from department to department. Information sharing is encouraged through mechanisms such as scrums and daily stand-ups—the kinds of gatherings you’d find at a tech start-up. Seeing a project through from start to finish gives each squad a sense of ownership and connection to the customer.

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Implementing an agile talent system doesn’t mean embracing chaos. In fact, a system that’s well designed observes clearly defined rules and safeguards to ensure institutional stability. Every tribe, for example, has a couple of agile coaches to help squads and individuals collaborate effectively in an environment where employees are encouraged to solve problems on the ground rather than pass them on to someone else. Although you might think adapting would be most difficult for long-term bank employees, that’s not so, according to ING Netherlands CIO Peter Jacobs. Many of them “adapted even more quickly and more readily than the younger generation,” he says, perhaps because their expertise now has more impact than in the past, when so many sign-offs were required.

Working in small, cross-functional units, squads can resolve issues quickly.

Then there are the chapters, which coordinate members of the same discipline—data analytics, say, or systems processes—who are scattered among squads. Chapter leads are responsible for tracking and sharing best practices and for such things as professional development and performance reviews. Think of chapters as a way of retaining the helpful parts of traditional management even while dispensing with time-consuming handoffs and bureaucracy.

Regular assessments are built into the system. Every two weeks squads review their work. Says Hamers, “They get to decide how they will continue to improve the product for our customers, or if they want to ‘fail fast.’” (Learning from failure is applauded.) Squads also do a thorough self-assessment after completing any engagement, and tribes perform quarterly business reviews (QBRs), looking at their biggest successes and failures, reviewing their most important learnings, and articulating goals for the next three months.

These safeguards help counter what Vincent van den Boogert, the current CEO of ING Netherlands (and part of the team that launched the new organizational structure), sees as the two biggest challenges of a squad-based system. One is the possibility that self-empowered squads responding primarily to the needs of customers might embark on changes that aren’t in sync with company strategy. The QBRs mitigate that risk. The second challenge is somewhat counterintuitive. Self-evaluating squads are sometimes content with the incremental improvements they make every two weeks. The QBRs help in that regard, too, because top management uses them to formulate and reinforce stretch goals.

More than two years in, Hamers considers the talent experiment a big success. Customer satisfaction and employee engagement are both up, and ING is quicker to market with new products. So the bank has started to roll out this new way of working to the roughly 40,000 employees outside its home country. For Hamers, the change can’t come soon enough. The apps for each of ING’s 13 retail markets vary in appearance, design, and function. Hamers wants to make things much simpler so that any customer, anywhere, will encounter the same ING. “Tech companies have one platform across the globe,” he says. “No matter where you use Netflix, Facebook, or Google, you get the same service. ING must do the same. That is the only way we will bring all our customers along into the future of banking.”

A version of this article appeared in the March–April 2018 issue (pp.59–61) of Harvard Business Review.
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