People create and sustain change. Spurred by their experience during the COVID-19 crisis, more and more companies are shifting their people model to one that values skills-based mobility and contributions instead of location-based work and standard functional expectations. Takeda gave up some ownership potential by doing so but accelerated its ability to deliver on its mission. CEOs are actively taking advantage of this particularly malleable moment, where new ideas are becoming the foundation of new ways of doing business, to reinvent their companies in ways that simply make more sense for today’s—and tomorrow’s—economy. The bank’s ambition is great: it expects that this transformation will drive a 10 to 15 percent productivity surge, cut two or three layers of management, and significantly improve time to market. Press enter to select and open the results on a new page. Remote work itself is the tip of the iceberg. The company quickly pulled in retail staff to help with calls. But by forcing them into new, more urgent modes of work, the pandemic has given many companies a glimpse of how they might operate better, faster, and more adaptably in the future. The clearest evidence of the pandemic’s impact on business has been remote working, the dislocation of people that occurred at virtually every company. McKinsey sees a second wave of automation and AI emerging in the next few years, in which machines will do up to 10 to 25 percent of work across bank functions, increasing capacity and freeing employees to focus on higher-value tasks and projects. Leaders reacted by shifting to what we call “survival minimum” mode. ... however, mask the wide variation of performance at the individual bank level. The bank targeted the ten most important journeys, including the mortgage process, onboarding of new business and personal customers, and retirement planning. For example, before the pandemic the company would often fly scientists and engineers to different locations for equipment maintenance. When that option seemed unsafe, the company quickly leveraged smart glass technology that allows an expert in a remote location to tap into a piece of equipment, pull data from it, and change the settings as needed. While purpose can dictate clarity in priorities, it is equally necessary for organizations to build the mechanism to cascade these priorities to the front line. Never miss an insight. Please click "Accept" to help us improve its usefulness with additional cookies. We'll email you when new articles are published on this topic. Payments remains among the best-performing The efforts of one Asian telco show how far some companies have been willing to bend their structure to adapt during the pandemic. Select topics and stay current with our latest insights, How COVID-19 is redefining the next-normal operating model, How operating-model reinventions drive better results. The revised employee value proposition (such as more flexibility and less commuting) has given HR the ability to cast a wider net on talent. A large European bank has embarked on a fundamental rethink of the way relationships and behaviors are managed both for business-to-business clients and among colleagues. the traditional banking business model. Compliance organizations used to promulgate regulations and internal bank policy largely in an advisory capacity with a limited focus on actual risk identification and management. People are valued for their skills and contributions, not their place in a hierarchy. Leaders have seen for themselves what McKinsey’s own recent research has been showing: the various elements of truly agile operating models can deliver meaningful business gains. The exigencies of the pandemic have given many companies a tangible experience of operating at unprecedented speed (exhibit). Zoetis, a New Jersey company that is the global leader in animal health, managed to pull off a major product launch and keep R&D running at full speed during the pandemic. Just three-and-a-half months later, Looney spoke again at the company’s May 27 annual meeting. Often, these teams were assembled to swiftly address specific outcomes, such as operational challenges born of the pandemic, which has meant decentralizing decision authority to extend it to the teams themselves. In addition, the introduction of cryptocurrencies, such as bitcoin, as well as the underlying ledger blockchain, is proving to be a disruptive force unto itself. FINANCIAL SERVICES Optimizing banking operating models From strategy to implementation September 2012 kpmg.com KPMG INTERNATIONAL Purpose, above all else, enables forthright decision making at speed. Please use UP and DOWN arrow keys to review autocomplete results. It created microsites in the offshore location, staffed by teams that ensured that all call-center personnel received the technology needed to work from home. This bank kicked its digitalization efforts into high gear and launched fully redigitalized offerings online in just eight weeks. Operating model design. Climate change was a reality, Looney said, and the world would soon invest “trillions of dollars” in “replumbing and rewiring the global energy system.” To lead in this huge opportunity, BP would have to change and would need to become leaner and faster-moving to do so quickly. Unleash their potential. As the COVID-19 pandemic developed, companies faced a raft of problems simultaneously: lessened demand, office closures, supply-chain derailments, and more. Digital upends old models. CEO Christophe Weber insists that the decision was also good for business: “Doing the right thing for patients is highly motivating for our employees. At the same time, they have installed a new performance and change-management system to create incentives for the new way of working. The traditional compliance model was designed in a different era and with a different purpose in mind, largely as an enforcement arm for the legal function. The very strongest companies are already acting on this opportunity to reinvent themselves with deliberation and speed. Leaders have seen for themselves what McKinsey’s own recent research has been showing: the various elements of truly agile operating models can deliver meaningful business gains. These concepts upended traditional operating models and drove the success of companies as disparate as Netflix and Amazon. Banking business models of the future Dr. Daniel Kobler Partner Banking Innovation Leader Deloitte Dr. Stefan Bucherer Senior Manager Consulting Deloitte Yet, Looney said, the pandemic had reinforced the company’s commitment to its new mission: “The more we understand the current situation, the more I am convinced that the decisions we took in February are right, for three reasons: increasing uncertainty surrounding the future demand for oil—and volatility in oil markets; increasing awareness of the fragility of the world we live in—and of the opportunities to build back better, greener and more resilient; increasing attractiveness of stable returns from some renewables—to which capital has continued to flow.” First will come severe credit losses, likely through late 2021; almost all banks and banking systems are expected to survive. Based on that success, the company has standardized a rapid redeployment process that will pay off long after the pandemic is over. We use cookies essential for this site to function well. One telco, for example, originally planned to train 400 employees in agile practices and product management over three months. Gregor Jost is a partner in McKinsey’s Vienna office, Deepak Mahadevan is a partner in the Brussels office, David Pralong is a senior partner in the Auckland office, and Marcus Sieberer is a senior partner in the Zurich office. ... (a Dutch bank), TDC (a Danish telecommunications company), Spotify, Entel ... All operating-model design must be grounded in an understanding of how value is created in the industry and how the individual organization creates value. The spread of empowerment throughout the company, born of necessity, has created a new set of potential leaders. McKinsey suggested banks should take significant steps to reconfigure and restructure their operations, including concentrating relationship managers in … : guides, tools, checklists, interviews and more kinds of companies as disparate as Netflix Amazon... New management rhythms, such as the strategy highlight four key pandemic accelerations that are now being incorporated into emerging!, February 12, 2020, bp.com normal arrives: Trends that will pay off long after pandemic... The editorial director of the pandemic, business leaders tell us that the metabolic rate their! Hours for a response it: “ that is the basis of what it will help the bank operating model mckinsey pulled. Our website but when it saw how critical the need was, it that. Enable Nigerian banks to achieve between 25 and 40 percent, respectively such journeys the next arrives... Is based on that success, the telco was forced to shut down its offshore call centers,! 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