Goldilocks and the Three BaREs: an Evolutionary Ecosystem for Transformation in Financial Services

Related Topics: Digital Strategy, Financial Services

by Joe Mendel – 

As I am writing this, the latest Mars explorer, Perseverance is getting ready to launch the first helicopter, Ingenuity, to explore another planet.  What an amazing time for science and the exploration of space.  This led me to think about the delicate balance of all the right conditions it takes for an organism like humans to exist and how similar that delicate balance must be for financial services organizations to grow and thrive.

So allow me to introduce you to the Goldilocks Zone.   Astronomers and astrobiologists in 1953, proposed that a defined Goldilocks Zone, or a circumstellar habitable zone (CHZ), or simply the habitable zone, exists where the range of orbits around a star within which a planetary surface can support liquid water given sufficient atmospheric pressure.   The bounds of the CHZ are based on Earth’s position in the solar system and the amount of radiant energy it receives from the Sun.

The habitable zone is also called the Goldilocks zone, a metaphor or allusion of the children’s fairy tale of “Goldilocks and the Three Bears”, in which a little girl chooses from sets of three items, ignoring the ones that are too extreme (large or small, hot, or cold, etc.), and settling on the one in the middle, which is “just right”.

Financial Service organizations or any corporate organism for that matter also exist daily within a delicate balance of variables that allow them to exist and flourish.  But that “just right” existence is a moving target as market pressures and disruptive technologies are gaining a larger footprint in the financial services world.

Three states of the Transformative Ecosystem

That takes us from Goldilocks to what I am calling “The Three BaRE’s (with some liberties)” – the three states of an ecosystem of transformative evolution; 1) Run the Business (RTB) or Business As usual, (the Ba of my BaRE), 2) Transform the Business (TTB), a transient intermediate state where one foot is in the old BAU and one foot in the new process.  This is the state of most stress, where stakeholders Re-organize (my R), to accept the transformation but still must work the “old way” while learning and incorporating the “new way”.  Finally, the third state is the Evolve the Business (ETB) where the new processes are Embedded (the E) in the company DNA, the effects are felt, and stages are set for the next transformational initiatives.  It is within these three states where the delicate balance of the “just right” stuff must be achieved for financial services organizations to remain viable.  Each mode has its own set of characteristics and levels of stress which requires differing sets of activities.  But make no mistake, each of your organizations today is living within all three modes simultaneously.  The trick is to be effective and efficient in all three on an ongoing basis.

             

Let’s take a look at each of the stages individually.

Run the Business (RTB)

As you would expect, this is conducting business as usual.  People, Process, Products, Platforms and Technology have proven the test of time and generate revenues for the company through established activities and methodologies.  It is the “we’ve always done it this way” mentality that is backed by a history of performance.  But as Darwin told us, “It is not the strongest of the species that survive, nor the most intelligent, but the one more responsive to change.”  This is our starting point, but as we will see, this beginning is fluid and dynamic, and elevates to higher levels of RTB as a company goes through the evolutionary process.  Existence and working in this mode are probably the most comfortable as all “pistons are firing” and the “gears are all moving in sync” as the company conducts business.  The transformation catalyst is typically a realization of a change in consumer demands, technology advances, competitive pressures or just the overburdening sensation of legacy debt that weighs heavily on forward progress, underpinning the realization that work methods, as we know them, are no longer relevant, contextual, or competitive.

The first enlightening step is realizing that there is a need to evolve the company.  Today, a digital transformation chasm exists for all organizations that continue down a path of slight incremental change versus a full-blown evolutionary transformation of the business operating and engagement models.  This creates a gap where no competitive financial services organization can afford to exist.

Transform the Business (TTB)

The second mode is a stage that is always in flux – a transitory state where transformation initiatives have begun, and new process and procedures are being put in place that require a change in the way work was conducted.  It is the probably the most stressful part of the tri-modal process in that it requires workers to adjust to new methodologies, playbooks, technology and to incorporate them into the daily work while still doing some portion of the work “the old way”.  Additionally, employees put on another hat as they are conducting business as usual in their day jobs and taking on new responsibilities for transformation project roles.  They have one toe dipped in the old ways of working and one toe in the new ways.  It can be a time of confusion and frustration and often the external focus on the customer and engagement experience takes a back door to the internal stress of change.  Often the easiest part of a transformation is the technology implementation with the most difficult part the organizational change management.  Many initiatives fail to achieve the return on investment and the proposed benefits due to people issues where acceptance and transformation lags market pressure demands.

Evolve the Business

The third mode of existence is where the transformation initiatives are gaining momentum and acceptance and are being embedded into the DNA of the company.  Here is where the efficiencies are gained, and benefits realized, and employees are comfortable working with the new operational and engagement models.  It is a less stressful time as workers are comfortable in their new environment and are skilled at the new technologies.  This stage now becomes the new normal and establishes itself as the new business as usual.  But evolution does not stop there.  As I mentioned in my previous blog, “Red Queen Hypothesis” proposes that “organizations must constantly adapt, solve and proliferate not merely to gain competitive advantage but also simply to survive while pitted against ever-evolving opposing organizations in an ever-changing environment”.  This means the process must start over again and build upon the foundational elements of the evolving business as usual mode.  An evolutionary mitosis takes place within the DNA of the company.  As it evolves, it splits off and discards outdated instructions and replaces them with new information and moves on continuing the growth pattern.

Success in the Goldilocks Zone

To be effective, organizations must learn to live and work effectively in each of these stages in parallel as their employee base lives and breathes a co-existence in each of these three worlds at any point in time.  The three BaRE modes must co-exist and thrive in harmony in a financial services organization across people, process, platform, and product while maintaining agile, flexible, adaptive, scalable, iterative, repeatable, contextual, and relevant qualities across the board.  Success will only come if harmony exists within the ecosystem and the workforce is aligned and knowledgeable about things to come.  It is not only about the “how, what and when”….but most importantly about the “why” things are happening because someone in the organization astutely asked “why not?”

Four Takeaways

  • Recognize that the 3 modes exist and plan for a work-life in each,
  • Accept and internalize constant change in a system of evolutionary mitosis as a core competency,
  • Know the limitations of the organization and do not get ahead of capabilities or culture, and
  • Partner with an advisory firm who can lead you through the process by supplying expertise and provide the ability to free up valuable internal resources for higher value assignments.

How do we get there?

It is an extremely complicated task to ask any organization to be 100% proficient within any mode of the evolutionary process.  Securing a partner to help with the identification of innovative and disruptive solutions and the implementation of new systems is key to success.  People skills and organizational change management are just as important if not more than technology skills and expertise.

At RCG Global Services, we help Financial Service organizations understand the complexity of remaining viable and competitive in the on-demand economy.  We have been successfully solving complex business problems for financial service companies globally since 1974.  Our clients rely on us to help them harness the speed of now that drives evolution to the hyper-business age.  We know companies struggle to exist in an ecosystem of three simultaneously co-existing states, where the adoption of an evolutionary mitosis process constantly transforms and evolves operational and engagement models.  Our engagement model has evolved also to provide the expertise necessary to identify evolutionary solutions and get you from mode to mode efficiently and with minimal disruption, allowing you to off-load, mitigate and de-risk your most critical initiatives.

We ask questions to solve business problems.  We engineer the velocity necessary to create competitive advantage through impactful outcomes.  We make your strategy a reality by compressing the time between strategy on paper, to execution, to impact, maximizing returns on investment while creating competitive advantage.

Contact us.  We can help you find your Goldilocks Zone.

 

Subscribe to get the Latest Updates

Enter your email address below to get the latest news and updates from RCG.