Mint - Edition 5

M-INT Market Intelligence Edition 5, Jan 2018

Contents 1 Banking: The Imperative Shift 2 Bridging the digital talent gap 3 Mastering Big Data 4 Mastering Complexity Part 1 5 Leader's Speak 6 Mastering Complexity Part 2 7 Book Blurb 1 8 Book Blurb 2 9 Fun Section2 Title of the book

Banking:The Imperative Shift from Complexity towards SimplicityIt is since 2016 that the Global Retail Banking Report The main factor though that brings complexity to theby the Boston Consulting Group stressed the heart of the banks is none other than the bankimportance of simplicity in the financial sector. The products themselves. The banks tend to have aargument was based on the fact that the focus of the product-centric view, instead of a customer-centricfinancial institutions should be the customer view, thus it is the isolated individual success of asatisfaction, which actually is their Achilles heel. product that matters at the expense of the full revenueShould the latter be true, then the 1 million dollar potential of the individual customers. Moreover, therequestion is why banks are complex business. The is no product life cycle and as a consequence, the newanswer is quite profound: legacies, aged products do not substitute the old ones; they just pileinfrastructure, perpetual changing environment, up and the banks conclude to have customers withdepartments management layers, operation across multiple products that do not eventually pay back.different jurisdictions, distribution channels and IT Naturally, the product blueprint is as complex as itsystems are some of the factors to blame for the gets.banks being in the relationship status “it is Complexity by default has a negative meaning. Incomplicated”. banking specifically it is one of the root causes for the financial institutions being cost effective and slowOn the other hand, how do we define paced, plus having lost focus towards customersimplicity in banking? satisfaction and engagement.Jin Zwicky has written in the FinancialBrand that “simplicity is based on humannature and common sense” and she hassupported her statement with the diagram:To make the long story short, the bigger the overlap is the simpler people perceive. The banks ought to re-designtheir models and products in order to achieve simplicity.As it usually happens to all the business, it is the strong embedded culture that rules. It is the cultivation ofsimplicity that should take place primarily before the banks proceed with re-designing their whole business. Forthe time being, it is the customers who absorb all the bad effects of complex banking systems and processes. It istime now for the banks to change perspective and absorb the pain the customers live. A simple bank interface willbe offered to the customers and the banks will deal with their complexity at the back stages.Post shifting towards a simplicity culture, the first step to be taken is to clear out the clutter and dispose of the oldfurniture at a 30% at least, in order to be a meaningful action. This would require a thorough analysis of theexisting products, costs and revenues where the dominator factor would be the customers’ needs.Instead of having multiple products – old and new for the same financial operation / solution – the banks shouldadopt a lean character product portfolio. Base products can offer a variety of features that the customersthemselves will chose based on their needs without having to pay for features that do not fall into their interestarea. This approach should have the financial institutions see their business with the eyes of the customers andreform their strategy of how to generate revenue.3 Banking

Banking: The Imperative Shift from Complexity towards Simplicity…Contd.Apart from the products being re-designed, it is also the operations that need to be changed almost fromscratch as well. Duplicate, long and time consuming processes only make things more complicated.Simplifying the operations and keeping them at a straight-forward level will move things faster and will alsogive to the bank’s departments the ease to cooperate smoothly.Of course, change has never been easy to implement. Thus, simplicity in the way the new bank profile will beimplemented and reflected to the customers should also be existent. This would possibly include the way thedecision making is done in a financial institution. It takes two to tango, as per the famous quote and likewise,all the bank’s levels should embrace simplification and have it as a norm to all the related operations. Read more at: https://thefinancialbrand.com/36434/bank-simplicity-design-customer-experience-zwicky/ https://blog.signaturit.com/en/digital-simplicity-the-surest-route-to-improving-customer-experience-in- retail-banking https://www.atkearney.com/financial-services/article?/a/reducing-complexity-in-retail-banking-simple- wins-every-time https://www.mckinsey.com/industries/financial-services/our-insights/radically-simplifying-the-retail-bank http://www.paconsulting.com/insights/simplifying-banking-short-terms-steps-to-achieve-long-term- success/ 4 Banking

How HR can bridge the digital talent gapDigital has been a driving force of change across What are the capabilities required to drive theindustries; and the transformation is accelerating – it innovation needed to meet the strategictook five years for Apple to transform the music industry objectives of the digital operating model underwhile Uber and Airbnb profoundly reshaped the construction? 5) User experience: What are thetransportation and hospitality sectors in less than two capabilities needed to understand the needs ofyears. Hence the profound effects on the functions of the customers? After defining the capabilitiesHuman Resources (HR) departments in the required, HR needs to support its organization inorganizations and their role in identifying new linking those capabilities to specific roles andapproaches to managing people. Prior to diving into the responsibilities. HR would need to follow aimplications on HR functions, it is important to identify structured (yet agile) process covering mainlyselected organizational implications of the digital the following activities: 1) Evaluate the amounteconomy: 1) Increasingly, responsibility is sitting closer of work associated with each capability. 2)to where decisions are most effective: Organizations are Determine roles needed based on the evaluatedbecoming flatter and decision-making leaner. 2) Leaders amount of work. 3) Define roles andhave always focused on outcomes. With the digital responsibilities allocated to unique positions. 4)transformation, there are technological enablers that Determine proper span of control that allows formake it possible to measure and test the soundness of effective, lean and scalable management.decisions quickly and easily. 3) Mobility and flexibilityare crucial for employees to remain relevant in the digital Embracing the digital talent lifecycleeconomy. Accordingly, competencies are transferableand internal and global movements are more appealing Human resources—particularly scarce digitalto both employers and employees. That being said, the talent—constitute the most critical resource atthree main areas that HR needs to acquire or strengthen multinational companies today, according toits role in and that are directly related to the success of Rainer Strack, a BCG senior partner and thethe digital transformation journey are outlined as follows. firm’s global topic leader for human resources. Developing a successful strategy for gaining andRe-structuring the organization to enable the digital developing digital talent is critical, according totransformation Rainer Strack, a BCG senior partner and the firm’s global topic leader for humanIt is HR’s role to map the future required digital resources. Strack discussed the 21 digital jobcapabilities (i.e., processes, people and technologies) functions that companies can target for talentand where they should be executed in the organization. recruitment—from marketing and business rolesDigital capabilities revolve around the following main to design and coding—including UX/UIareas in the operating model: 1) Strategy: How will designers, social media and communitydigital drive value for the organization? hat role does the managers, scrum masters, business intelligenceorganization want to play in the digital space? How does specialists, and virtual manufacturing engineers.it want to win in the digital era? 2) Planning and On the basis of how they fill such roles,operations: How will digital plan, operate, monitor and companies can be given a “digital penetrationtrack value captured? 3) Product or service score,” which ranks them in comparison withdevelopment: what are the technical capabilities competitors in their industry. “You need to getrequired for product or service development? 4) clarity on the amount and type of digital talentInnovation: you have to create a strategic workforce plan,” he said.5 HR

How HR can bridge the digital talent gap…Contd. Empowering digital leadership HR plays an important role in enabling digital leaders in the organization and equipping them with the required essential skills and furthering their leadership characteristics. Examples of key essential leadership skills that have been deduced from organizations that have undergone successful digital transformations are: 1) A comprehensive understanding of the digital market. 2) A visionary mindset to develop solutions to potential disruption. 3) A champion mentality to promote and gain buy-in for digital initiatives. – Financial acumen to quantify value and return on investment. 4) Business savvy to manage the push and pull tension between cross-functional teams. 5) Management capacity to effectively operate the digital team. 6) An entrepreneurial spirit to continuously innovate products and manage the product or service lifecycle and the user experience. Read more at: https://www2.deloitte.com/content/dam/Deloitte/xe/Documents/human- capital/dme_hc_changing_role_of_people_management_in_the_digital_era.pdf https://www.bcg.com/publications/2017/people-organization-technology-how-gain-develop-digital-talent- skills.aspx https://www.strategy-business.com/article/The-New-Class-of-Digital-Leaders?gko=a250f 6 HR

Big Data and Mastering ComplexityTechnology continues to fundamentally change our How Big Data Analytics makes the differenceworking lives. Technology has helped us get where and Simplify:we are today, but it’s also made where we’re at very The new analytic tools enable organizations to:complex. As businesses have taken advantage of thelatest technology trends, they have deployed a • Analyze all data instead of small subsets of datadisparate set of IT solutions not always designed to • Analyze data as iswork together. The implications of this complexity on • Explore all data and identify correlationsour economy are profound; it’s consuming incredible • Analyze data in motion/real time, instead of waitingamounts of human and financial capital. for it to be processed and placed in a data warehouse.Big data is “a phenomenon that is a result of the rapidacceleration and exponential growth in the expanding Many enterprises worldwide are using big datavolume of high velocity, complex and diverse types of analytics for implementing operational strategiesdata.” Big data is more about the complexity of the and facilitating business transformation. The real-data, rather than the size of the data alone. Contrary time analysis of big and complex data usingto one common misconception that big data analytics solutions is enabling enterprises worldwiderepresents a technology, It is in fact an event or an make quick and effective business decisions. Weoccurrence. Big Data can be classified based on Four are presently living in the era wherein enterprisesdimensions , known as the Four Vs: possess strong forward-looking capabilities, thanks to the power of predictive analytics and advanced1. Volume data science.2. Velocity3. Variety4. VeracityThe world of Big Data is complex, but with new platforms available to more easily handle such complexities,Big Data is beginning to not seem as big as it used to. NoSQL, Spark, Kafka, and Hadoop are some of theBig Data analytics technologies that are gradually becoming core IT elements for many large and smallbusinesses. Organizations are now running various types of Big Data Applications and providing theircustomers with much more useful information. The uses and practices of Big Data are evolving remarkablyfast and considering the volume and complexity of the data which businesses and organizations are dealingwith, it is the need of the hour.Read more at:http://www.businessofgovernment.org/https://www.forbes.com/7 Technology

Mastering Complexity – Discovering OpportunityPart 1Actually, I am not sure life itself has become more Below are few key points that helps in masteringcomplex. I wonder instead if we have allowed complexityourselves to think its complex or that we are wired to Being AGILE - Mastering complexity is not about tryingstimulus we lose sight of what matters and what, to control it but about reacting to it with agility.really, does not. Companies want to be agile, but it is a scary decisionPicture a steel production plant. Tens of thousands of to make. This is hardly surprising because mostorders stream in every day, each with different technology, until recently, revolved around buildingchemical requirements. You combine them all into a static plans and communicating them maybe once asingle casting sequence that has to be exactly right. week or once a day. New technologies offer fullAny outcome that goes off specification, even in the visibility throughout the supply chain, making it evenslightest is scrapped, re-melted or is sold off as a more urgent that unnecessary complexity is address.lower-quality product. Reducing deviations is a At the same time, these technologies open up a worldchallenge when you consider the different attributes of automation, data and analytics that help us buildof the steel slabs themselves and machinery dynamic plans and react to disruptions with agility welimitations. Add to this a disruption such as a hot never had before.rolling mill breaking down, which takes six hours tofix. Now everything is six hours late and there goes Making the Shift- Mastering complexity cannot be ayour plan. sporadic activity. It is a sustained effort that requires changes in mindsets and behaviors. The technologiesThen there is the poultry processing plant. Imagine that connect your people, processes and machines willreceiving your raw materials and never knowing transform the way you manage your supply chain,exactly what you are getting. No two chickens are the moving it from being a Cost Centre to being a high-same, but every cut must be perfect. It is a race value component in your operations.against time as shelf life deteriorates and the value ofyour raw materials drops by at least 20pc with every Digital Revolution- The companies that embrace thispassing day. You get to work assessing the birds and transformation and the agility it brings will mastercalculating cutting paths to turn them into products of complexity in their operations. The market analyst IDCvarying brands, conversions, grades and other quality predicts that by next year two-thirds of chief executivesfactors to fulfil bills of materials spanning multiple of Forbes Global 2000 enterprises will have digitallevels and options. Everything goes according to plan transformation at the center of their corporate strategy.until a customer throws in a last-minute order or Gartner estimates that the 125,000 organizationsmakes a quantity revision. What now? Think fast launching digital initiatives today will see revenues risebecause those birds wait for no one. by 80pc by 2020. By that same year, 75pc ofBusiness compete in a world that is growing ever organizations will deploy analytics to improve decision-more complex. Disruptive technologies emerge with making.increasing frequency. Customers’ need and demandschange at breakneck speed. New Competitors arealways entering the fray. Many organizations thinkthat they have a Plan to master business complexity– many companies do not have one, reality. Thosethat think they do have one are merely trying tocontrol and contain it. The real solution to masteringcomplexity is to embrace it first.8 Competency – Mastering Complexity

Mastering Complexity –Discovering Opportunity Part 1…Contd.Let-go Controlling- Complexity is a growing challenge for many businesses. The cost of complexity is oftenhidden, but usually a drag on profitable growth. Even when complexity translates into additional revenue, it canhurt the bottom line if the real costs exceed the value created. Gaining insight into this information is the key togrowing and retaining strong, high-value relationships. Therefore, the way forward is to embrace thecomplexity. Master it, and you can turn it into an advantage, rather than a nightmare.Keeping entropy at bay-This is the equivalent of tidying your teenager’s room. It involves periodically takingout layers of management, getting rid of old bureaucratic processes that are no longer fit for the purpose, orreplacing the old IT system. It is thankless work, and does not appear to add any value, but it is necessary. Read more at:- https://www.linkedin.com/pulse/how-master-complexity-your-business-mark-hughes https://www.london.edu/faculty-and-research/lbsr/are-you-managing-complexity?p=79&page=25# http://www.telegraph.co.uk/business/business-reporter/plan-to-master-complexity/ Mastering Complexity @ Oracle 9 Competency – Mastering Complexity

Leaders Speak An article on Managing Complexity by Dinakar Kini, Consulting Program VP1.0 IntroductionAs the business grows, the complexity also increases, sometimes even at a fasterrate. Growth is an imperative that drives organizations to create more products, enternew geographies and move into new sectors. As organizations expand in pursuit ofgrowth, they inevitably become more complex. It is important to recognize thatcomplexity in itself is not a bad thing and if managed and addressed appropriately, canhelp us unlock the value and fuel growth. 10 Leaders Speak

Managing Complexity by Dinakar Kini…Contd.Complexity often is the result of contradicting requirements that must be met to satisfy multiplestakeholders. A good example is a contradiction between cost vrs quality. Another that we often haveto battle is the contradiction between standardization and customization. In a complex organization likeours, the complexity could either be business related, or product related or process related or acombination of some or all of these. Analyzing and identify the underlying root cause can help infocusing on the right dimension.2.0 Different Approaches to managing complexityThere are no easy solutions / approaches to managing complexity. First and foremost, it is important tounderstand the factors that are contributing to the complexity. From my experience, I have tried toarticulate four different approaches / management styles that may help you to manage complexity. Thecontext for these different approaches is typically from a program / business management perspective,but similar approaches should work for other contexts as well. 11 Leaders Speak

Managing Complexity by Dinakar Kini…Contd.2.1 Inside out approach – This is perhaps the most effective way in managing complexity. Takingan insider’s view and being part of both the problem and the solution will help in having betterunderstanding of the root causes and bottlenecks. Breaking problems into manageable units andfocusing on specific tasks often assists in figuring out the task and the related factors such as theprocesses / stake holders that may be contributing to the complexity. Pareto’s principle of the 80/20rule may apply in many situations and one may find that 20% of the tasks are contributingsignificantly to the complexity. Fixing accountability is also very important.2.2 Progressive elaboration - This is another approach that often can help in localizing on the rootcause and zeroing in on the task / process that is contributing to the complexity. In this approach,you start with a very simple scenario / situation (say 1 product, a customer, 1 internal stakeholder)and then progressively elaborate to the current situation. This can help in identifying a few specificfactors that are contributing to the current situation / scenario.2.3 Iterative – No complex business situation / project can be sorted out in one iteration. One needsto patiently iterate. This approach in turn can leverage other approaches that have been outlinedbefore.2.4 Outside in approach – It always helps to take a view of someone who is looking at the situationfrom a distance. This can either be a Mentor, or someone who is a senior executive. Running thescenario with a Mentor can help bring in an independent perspective. Similarly, taking inputs form asenior stake holder is also useful, as they bring in a different perspective and can help understandthe organizational and business dimension.3.0 ConclusionAs organizations grow and expand, they inevitably become complex. Matrix reporting within theorganization becomes common and people find it difficult to get things done. However, while, thenumber of product offerings we have increases, while we acquire more customers, while weexpand the geographies we work in, all of these tend to increase the complexity, but does enablegrowth. Hence, it is important to view problems arising out of complexity as a challenge andchallenge as an opportunity. Once should learn to be comfortable with a certain level of ambiguityand learn to appreciate that not everything will be black and white, as business grows andbecomes more complex. 12 Leaders Speak

Mastering Complexity by Creating Simplicity Part 2Leonardo DaVinci was one of the most fascinating geniuses in the history of mankind. His genius extendedfrom imagining the first car and bicycle to early notions of winged and helicopter air flight to the conversion oflinear to rotary motion to the incredible nuances of the Mona Lisa and The Last Supper.For all of his mental agility in so many pursuits, it was he who said: Simplicity is the greatest sophistication. Why do so many companies lose their way? Organizational simplification does not mean just redrawing the org chart. It also requiresWhen companies are just starting out, they have no streamlining processes through changes inproblem identifying the path before them. The accountabilities, governance and ways offounders know where they’re headed, who their working. In practice, organizational simplificationcustomers are and how they hope to succeed. Often, is often performed in tandem with businessthey see themselves as insurgents—on a mission to simplification, which might include shedding lessfill customer needs that incumbents have overlooked productive geographies and lines of business toor ignored. Founders obsess over the details. They regain strategic focus.abhor bureaucracy and personally keep tabs on whatis happening on the front line to make sure they’re FOUR STEPS TO SIMPLIFICATIONstill on top of their markets. Employees take theircues from the founders and keep finding new ways to 1. Smart Start. The first step is the identificationplease customers, do their jobs better and increase of the performance issues and the symptoms ofsales. complicatedness. A company should not simplify itself only for the sake of simplifying.The problem is that most companies lose the Simplification is for companies that aim to tackleFounder’s Mentality as they grow. But size itself is concrete performance gaps currently caused bynot really the problem—some corporations (a lucky complicatedness. The performance issues needfew) manage to maintain the founder’s mentality, to be measurable, and the benefit of addressingeven as they grow into major multinationals. the problems should be clear, quantifiable, and worth the energy expended.What really hurts the founder’s mentality andhamstrings large organizations is complexity. 2. Diagnosis. This step focuses on achieving aComplexity is the “silent killer” of growth, creeping in clear understanding of what is causing theunnoticed as companies expand into new performance issues, through in-depth analysis ofgeographies and lines of business. Layers, ranks and behavior (what people are doing today) and thetitles build up, and the connection to the front line is context (why they do what they do). The goal issevered. Instead of keeping up with customers, to determine precisely the root causes ofmanagement spends most of its time on process. In a complicatedness.Bain & Company survey, 85% of CEOs in companies This is generally achieved by defining five to tenthat have ceased to be value creators blame internal use cases, for example, the procurementfactors such as complexity, not external factors, for process that illustrates poor alignment amongtheir woes. Complexity kills, but companies don’t finance, engineering, and manufacturing. Eachneed to succumb. Leaders who recognize the use case needs to be clearly linked to a specificthreat can intervene and simplify their problem area or process.organizations before it’s too late.13 Competency – Mastering Complexity

Mastering Complexity by Creating Simplicity Part 23. Solution Design. This step focuses on changing the context to make desired behaviors rational. Thecentral question at this point is, What targeted interventions will address the root causes of theperformance issues and thereby eliminate complicatedness? This determination is based on thenecessary context adjustments that are identified through analysis of the five to ten use cases and theunderstanding of the required target behavior for each use case. Since interventions are designed forconcrete use cases, they are very specific.Implementation. The fourth step focuses on implementing the solutions and ensuring that they aresustainable and can be improved continually over time. This involves prioritizing solutions and creatingan implementation roadmap. An activist project management office (PMO) with clear authority to drivethe process, challenge proposed solutions, and make decisions on tradeoffs is a key factor in thisphase. To lead its simplification drive, the global machining company described above created such aPMO.Read more at:http://killthecomplexity.com/why-the-heck-is-complexity-so-hard-to-catch/http://definingmoments.me/manage-complexity-by-mastering-simplicity/http://www.wearestop.com/2017/03/organisational-complexity-research/http://www.bain.com/publications/articles/killing-complexity-before-complexity-kills-growth.aspx 14 Competency – Mastering Complexity

Book Blurb 1 Major New York Times bestseller Winner of the National Academy of Sciences Best Book Award in 2012 Selected by the New York Times Book Review as one of the ten best books of 2011 A Globe and Mail Best Books of the Year 2011 Title One of The Economist's 2011 Books of the Year One of The Wall Street Journal's Best Nonfiction Books of the Year 2011 2013 Presidential Medal of Freedom Recipient“In the international bestseller, Thinking, Fast and Slow, Daniel Kahneman, the renownedpsychologist and winner of the Nobel Prize in Economics, takes us on a groundbreaking tour ofthe mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, andemotional; System 2 is slower, more deliberative, and more logical. The impact of overconfidenceon corporate strategies, the difficulties of predicting what will make us happy in the future, theprofound effect of cognitive biases on everything from playing the stock market to planning ournext vacation—each of these can be understood only by knowing how the two systems shape ourjudgments and decisions.Engaging the reader in a lively conversation about how we think, Kahneman reveals where we can andcannot trust our intuitions and how we can tap into the benefits of slow thinking. He offers practical andenlightening insights into how choices are made in both our business and our personal lives—and how wecan use different techniques to guard against the mental glitches that often get us into trouble. Winner ofthe National Academy of Sciences Best Book Award and the Los Angeles Times Book Prize and selectedby The New York Times Book Review as one of the ten best books of 2011, Thinking, Fast and Slow isdestined to be a classic.”https://us.macmillan.com/thinkingfastandslow/danielkahneman/9780374533557/ 15 Book Blurb 1

Book Blurb 2 Decisive: How to Make Better Choices in Life and Work “Research in psychology has revealed that our decisions are disrupted by an array of biases and irrationalities: We’re overconfident. We seek out information that supports us and downplay information that doesn’t. We get distracted by short-term emotions. When it comes to making choices, it seems, our brains are flawed instruments. Unfortunately, merely being aware of these shortcomings doesn’t fix the problem, any more than knowing that we are nearsighted helps us to see. The real question is: How can we do better?In Decisive, the Heaths, based on an exhaustive study of the decision-making literature, introducea four-step process designed to counteract these biases. Decisive takes readers on anunforgettable journey, from a rock star’s ingenious decision-making trick to a CEO’s disastrousacquisition, to a single question that can often resolve thorny personal decisions.Along the way, we learn the answers to critical questions like these: How can we stop the cycle ofagonizing over our decisions? How can we make group decisions without destructive politics? Andhow can we ensure that we don’t overlook precious opportunities to change our course?Decisive offers fresh strategies and practical tools enabling us to make better choices. Becausethe right decision, at the right moment, can make all the difference.”http://heathbrothers.com/books/decisive/ 16 Book Blurb 2

Complex Questions Please send your answers to ??? [email protected] Simple Answers 1. A little girl kicks a soccer ball. It goes 10 feet and comes back to her. How is this possible? 2. A is the father of B. But B is not the son of A. How’s that possible? 3. A rooster laid an egg on top of the barn roof. Which way did it roll?4. A truck driver is going down a one way street the wrong way, and passes atleast ten cops. Why is he not caught? 5. Some months have 31 days, others have 30 days. How many have 28 days?18 Fun Zone

Mint Editorial Team Sriram Mara AbhiLalit Vineet Alex Mei