What happens when a company whose roots go back over a century — a bank, no less — decides to adopt agile management methods developed in the software industry?

How is technology transforming the practice of management? As everyone knows, technological innovation enables changes in how we work, for example, helping people collaborate, access information more quickly, and make smarter decisions. Less obvious, but no less important, is the observation that technological innovation inspires new approaches to management. For example, the shift from mainframe computers to personal computers gave impetus to the empowerment trend of the 1980s, and the emergence of collaborative software tools shaped the knowledge management movement in the 1990s. In such cases, new technologies expand our capabilities and broaden our horizons, and it is this combination that enables management to evolve.

A case in point is agile. This emerged during the 1990s as a software methodology, made possible by new programming languages that made it much easier for developers to build prototypes and gain rapid user feedback. The concept of agile software development was formally defined in 2001,1 and over the next decade it gathered momentum as a more responsive and collaborative approach to software development than the traditional “waterfall” methodology.2 In recent years, agile has started to move into mainstream management thinking, with some observers proclaiming it the next big thing. Forbes.com contributor Steve Denning calls it a “vast global movement that is transforming the world of work.” In a 2016 Harvard Business Review article, Darrell Rigby, Jeff Sutherland, and Hirotaka Takeuchi wrote that “agile innovation has revolutionized the software industry. … Now it is poised to transform nearly every other function in every industry.”3

The purpose of this article is to shed light on agile as a management practice. To do this, I report on a detailed case study of the operations of ING bank in the Netherlands, which has adopted agile across its headquarters in Amsterdam. Though ING’s Dutch operations are less than three years into the process — and it’s therefore premature to declare the initiative a success — taking a deep dive into the organization’s early experience with adopting agile is nonetheless instructive.

Most IT departments in large companies today are adopting agile techniques to some extent, although with varying degrees of success.4 And many fast-growing technology companies, such as London-based Spotify Ltd. and Los Angeles-based Riot Games Inc., have embraced agile not just as an IT methodology but as a way of working.5 By contrast, ING is a bank whose roots go back more than a century. It is the first case I know of in which an established company in a traditional industry is reinventing its management model throughout its operations in a particular country — not just its IT or software development management model — using agile principles. By studying the experience of ING’s operation in the Netherlands, leaders at other established companies should be able to make more informed decisions about whether pursuing agile is right for them.

In this article, I highlight key learnings at ING in the Netherlands, largely from the point of view of the senior executives of the bank during this transition period, and I reflect on some of the broader implications. I don’t spend much time on the internal workings of the agile teams, or squads as they are known within ING, because others have written extensively on those.6 Instead, my focus is on implementing agile on an organization-wide basis. This is where the ING experience is unique — and hopefully most useful to other established companies that are seeking to embrace agile working.

My research is based on in-depth interviews with 15 ING executives and many front-line employees. (See “About the Research.”) In addition, I spoke to leaders tackling similar issues about new ways of working at other large companies, including Barclays, Roche, Bayer, Unilever, and BMW. Tellingly, one of the ING leaders I interviewed, Bart Schlatmann, left ING early in 2017 when another large global bank recruited him to help them implement agile methods. (He had spent 22 years with ING, the last 10 as COO of ING Netherlands.)

Why ING Adopted Agile

ING has always been open to new ways of working. It was an early mover in internet banking, creating ING Direct in the late 1990s as a nonbranch offering. In 2007, ING merged its two Netherlands-based business, Postbank (a savings-only bank with no branches) and ING (a traditional retail bank). The transformation process was called TANGO (together achieving new growth opportunities), and it achieved annual savings of 280 million euros (roughly $330 million at today’s exchange rates). In 2014, with the emergence of mobile banking, ING began rethinking its entire model through a process called RIO (redesign into omnichannel). ING quickly realized that it needed to look beyond the banking industry for guidance. Specifically, ING found inspiration from Amazon, Spotify, and Zappos, where agile methods had demonstrably improved customer orientation and employee engagement.

ING also conducted an internal study, which highlighted how bureaucracy, silos, and risk aversion were cultural problems. Based on this analysis, ING decided on a top-to-bottom restructuring of its operations in the Netherlands, based mostly on Spotify’s model but also on practices from Google, Netflix, and Zappos. The plan was to organize the 3,500 employees in Amsterdam into squads: teams of up to nine people with end-to-end responsibility for a specific customer-related activity. The squads would then work according to agile principles: a series of short “sprints” with frequent user feedback and daily progress updates.

ING went live with the new structure for its Netherlands operations on June 15, 2015. Eighteen months later, employee engagement was up (according to an internal survey to which I had access). In addition, ING’s Net Promoter Score for its business in the Netherlands rose from –21% in 2015 to –7% in 2017, and its cost-to-income ratio in that business dropped over the same period from 65% to 51%. While the transformation is not finished, it is still fruitful to reflect on what ING has learned so far. I’ve grouped ING’s lessons into five points.

1. Decide how much power you are willing to give up. In December 2014, ING executives flew to meet executives at Spotify. At that meeting, a Spotify executive said: “I can see you are fascinated by our way of working, but it’s not that easy. You need to ask yourself honestly, how much are you willing to give up?” His point was that agile shifts power away from those at the top and puts ownership in the hands of those closest to the action. That is a difficult shift for executives at established companies.

How did ING handle this shift? The “big bang” approach meant that senior managers in the Netherlands had to embrace the new way or leave the company. Those who stayed had to reapply for the newly categorized jobs. This led to major personnel changes and a significant downsizing in the organization (a net reduction of about 1,500 employees in the Netherlands from 2014 to 2016). All told, about one-third of the senior managers left.

The overarching lesson is that you cannot implement agile unless top executives accept that they are surrendering some status and power. “It requires sacrifices and a willingness to give up fundamental parts of your current way of working,” said Schlatmann.

2. Prepare stakeholders for the leap. Some ING stakeholders were “completely freaked out by our proposals — they thought it would be complete chaos,” recalled Schlatmann. It was one thing for Spotify and Netflix to adopt agile; it was quite another for a large bank to do so in the post-financial-crisis era.

How did ING’s executives sell agile to nervous stakeholders? To the board, the executive team cited its track record with TANGO and RIO. They also argued that ING needed a new way of working to stay competitive in the lightning-fast digital marketplace. In addition, ING executives sought early buy-in from the works council representing employees, explaining how agile would engage and empower rank-and-file employees. “They accepted the notion that this was a one-time chance to really change the organization, and they ended up supporting us in a very positive way,” said Schlatmann.

Meanwhile, bank regulators were concerned: They had never seen this structure in the industry. So ING’s executives invited regulators to headquarters, where they could observe how agile brought to operations a habit of daily communication about progress and customer solutions. Most important, ING’s executives assured regulators that finance, compliance, and legal functions would continue to be managed in their traditional way.

The lesson here is to assess — as early as you can — how stakeholders will react to a major change. Then find the right arguments to allay their concerns.

3. Build the structure around customers — and keep it fluid. The notion that work should be focused on customers is as old as the hills. Management thinkers such as Peter Drucker, W. Edwards Deming, Philip Kotler, and Theodore Levitt have all espoused their own variants of customer orientation. But agile goes a step further, forging a structure around customer needs. The basic building block for ING was a self-managed team, or squad, of up to nine people focused on a particular customer group. These squads were then clustered into larger tribes working on related activities. ING distinguished between experience tribes that attract new customers and service tribes that take care of existing customers. ING also defined two enabling tribes to serve these two customer-facing tribes. For example, one of the enabling tribes built black-box technical solutions for customer identification.

ING also seeks to keep its structure fluid so that it can evolve to do what’s best for customers. For example, the experience tribe in charge of daily banking was, for a time, handling some customer communications duties. But eventually they shifted these duties to the tribe that specialized in communications. Likewise, ING has created the concept of “pop-up squads” to manage one-off, short-term projects.

The lesson here — regardless of any decision you make about agile — is to revisit your organizational structure to make sure it maps to the real needs of customers.

4. Give employees the right balance of oversight and autonomy. How do you ensure that squads prioritize important work? ING in the Netherlands moved to a quarterly business review (QBR) process adapted from Google LLC and Netflix Inc. Four times a year, each tribe lead writes a maximum six-page summary of what the tribe achieved, what they did not achieve (and why not), what they are going to achieve next quarter, and any dependencies outside the tribe’s control.

These summaries are then discussed in a big meeting (the QBR Market) attended by tribe leads and other relevant leaders — about 20 people overall. They challenge one another’s achievements and plans, and in doing so often resolve tensions or overlaps. Each tribe lead emerges with a set of objectives and key results (OKRs) for the following quarter. The OKRs then get translated into tasks for the individual squads within the tribe.

All of that has been a learning process for ING employees accustomed to a traditional goal-setting process. At first, tribe leads defined quarterly goals that were comfortably achievable. ING’s executives had to urge them toward more ambitious targets — since the whole point was setting stretch goals, not erring on the safe side.

ING’s experience is a reminder that you still need top-level oversight in an agile organization — to continually tweak the framework for goals and reporting, and to keep the level of ambition high.

5. Provide employees with development and growth opportunities. Squad-based structures can be scary for employees used to having their personal development and career progression mapped out by HR departments or the mainstream career trajectories of a given industry. Indeed, one risk of agile is that employees become too task-focused and results-oriented. They burn out and neglect to think about their careers over the long term. Having discovered this risk in its advance research, ING has taken steps to attend to employee development.

For example, ING in the Netherlands instituted weekly POCLAC meetings for each squad, where the activities of the squad and the development needs of individuals are discussed in tandem. POCLAC stands for product owner, chapter lead, agile coach — the three people responsible for empowering a squad. Though these meetings are undoubtedly a sound idea, they remain a work in progress. In fact, one area in which ING in the Netherlands has struggled in its agile transition is that the POCLAC meetings do not always happen on a weekly basis. Perhaps this isn’t surprising: In most organizations, long-term individual goals easily get subsumed by and subordinated to short-term urgencies. What’s more, in ING’s old way of working, a manager was responsible for everything: the product, the process, and the people. With agile, each element is the responsibility of a different person. It’s been an adjustment for chapter leads, product owners, and agile coaches to grow comfortable with all of their new responsibilities, let alone nonurgent matters like career development.

The lesson? Finding proper coaching and support for agile — and the new, long-term responsibilities employees must embrace — is one of the hardest parts of the transformation.

Lessons From ING

ING’s experiences are a reminder that implementing new practices is much more difficult than suggesting them. The key challenges — shifting power from the top, getting buy-in from stakeholders, and changing employees’ views about professional development — are operational concerns, rather than big-picture ones. No wonder new management practices often work better at young companies than they do at old ones, where the employees have entrenched expectations and habits.

But agile does have one advantage for established companies: It is now a bona fide way of working, with its own set of principles and a track record of success in certain sectors (mostly tech) and functions (mostly IT). In discussions with stakeholders, leaders can say that they are exploring a tested management model, rather than reinventing the wheel. Moreover, agile is starting to migrate into mainstream business — and ING in the Netherlands is at the forefront of this movement. By discussing the details of its experiences, I hope others can be encouraged toward comparable experiments and explorations.


1. The original “Agile Manifesto” is available at http://agilemanifesto.org.

2. As part of this gathering momentum, a wide range of industry associations and training providers have emerged, such as Scrum.org, the Scrum Alliance, the Agile Business Consortium, the Agile Centre, and Lean Kanban.

3. S. Denning, “Explaining Agile,” www.forbes.com, Sept. 8, 2016; and D.K. Rigby, J. Sutherland, and H. Takeuchi, “Embracing Agile,” Harvard Business Review 94, no. 5 (May 2016): 40-50.

4. Challenges with implementing agile have been reported in several places. See, for example, J. Birkinshaw and M. Guest, “Digital Transformation in Practice,” London Business School and Deloitte Institute of Innovation and Entrepreneurship, October 2016, www.london.edu; and B. Boehm and R. Turner, “Management Challenges to Implementing Agile Processes in Traditional Development Organizations,” IEEE Software 22, no. 5 (September-October 2005): 30-39.

5. S. Denning, “Can Big Organizations Be Agile?” www.forbes.com, Nov. 26, 2016; and H. Kniberg, “Spotify Engineering Culture (Part 1),” labs.spotify.com, posted March 27, 2014.

6. J. Sutherland and J.J. Sutherland, “Scrum: The Art of Doing Twice the Work in Half the Time” (New York: Crown Business, 2014); S. McChrystal, with T. Collins, D. Silverman, and C. Fussell, “Team of Teams: New Rules of Engagement for a Complex World” (New York: Penguin, 2015); and K.S. Rubin, “Essential Scrum: A Practical Guide to the Most Popular Agile Process” (Upper Saddle River, N.J.: Pearson Education, 2013).

1 Comment On: What to Expect From Agile

  • Todd Balazs | January 21, 2020

    Good article,

    Be interesting to hear about the “how” the goods and bads. If they had to do it all over again what they would do differently.

    Other then to be competitive…was there a real “threat” and churn on trying to re-imagine themselves that inspired the workforce

    How engaged was the CEO on making this happen.

Add a comment