Richard James

Good morning, everyone. Myself, Richard James, and Jen Marsden here from Nationwide.

Before we get into the slides, before getting into why culture is hard and why some of this stuff is grindingly complex in your organizational context, I wanted to start with the thing about this conference. I am genuinely thankful that everyone in this room has come along to attend. I am genuinely thankful for all the opportunities to talk to people I have had. I loved having 30 minutes just talking to Tom yesterday about where we are with the platform at ITV, Raj Fowler, Matt, Manuel, Mick.

This is hard stuff. Before I start on the materials, I genuinely love the fact that this type of arrangement happens and people are so transparent and open. It is not "I am selling you a product" or "I am looking for this proposition." It is really wanting to try and solve some stuff together. Before getting into materials, thank you, because it is amazing.

All right. Richard and Jen are going to talk about where we are at Nationwide, and we are going to be pretty open, because that is what I have just said is important about this. We are going to talk about some of the successes we have had, and we are going to be quite open about all the things we are struggling with. If there are people who have solved similar things in their context and/or are wrestling with similar things in their context, please help. Coffee, reach out, Slack channel. Just help, because this is hard and we need you.

I am going to talk through who Nationwide are, why Nationwide are slightly different from other retail banks, why we are doing what we are doing, and how we got started. That has been a theme over the last few days: start where you are and do not think there is some simple, singular solution that you can implement and you are done. Do not think it is a from-somewhere-to-somewhere. Some of how we got started will be common, some specific, but the theories and principles hold true.

Then I will talk about what we have learned and some of the wins: the opportunity to do things greenfield, the opportunity to do things slightly outside the normal for your organization, but then the crushing reality of everything still connecting back into the mothership. You are not some greenfield startup. You still use the same systems of record, you still abide by the same legal entity. You are not special and fresh; you are part of. Then Jen will share practical actions, and we are both interested in your practical actions.

Starting with who Nationwide are: the thing up front is this model, this crowdfunding. What is a building society? Nationwide is not a retail bank. It is not owned by shareholders. It does not pay dividends. It is owned by its members, and everything it does is in support of its member base. Every decision it makes is in support of its member base. Every choice of feature, function, fix, or where your error budgets sit, that is all member. It is very member-centric. Being owned by members, and therefore having a clear set of values tied back to that, is one of the things that has allowed us to make material progress.

We talk about being the original crowdfunding. The story goes that in the late 17th or maybe 18th century, a group of work colleagues in a pub were bemoaning the fact that they could not afford to have their families move into a home. The landlord said, "Well, look, stop. You are a collection of folk who between you, if you just stop putting your money into pints and put money into a pint pot in the middle, and at the end of your drinking session decided how that would be used as a deposit for the most needy family you find." That is the beginning of the building society movement: coming together for the many to support those who want to own their own homes. That is right at the core of what is Nationwide. Nationwide as a building society is about helping folk who want to save to support those who want to borrow. It is a simple business: retail, UK only, simple product.

It has been helping everyday people. For those who have been to the Nationwide house, individuals, individual houses, individual stories are everywhere. Everything links back to: how did we help, how did we support, how are we building society nationwide? Our first mortgage member was Alfred Idol. He is celebrated in numerous ways around the organization. It genuinely matters that we tie ourselves back through 140 years of history to why we were set out and what we were there to achieve.

As of today, whether it is a big ta-da or not, Nationwide is the world's largest mutual organization. Over the five years I have worked with Nationwide, we have typically worked to support the building society movement as well. We have not taken over other organizations aggressively. We have merged with Portman, Anglia, Dunfermline, Derbyshire. That support for the movement goes into our CEO going to the Building Society Association and sharing learnings. In our platform, if we could get it to be open source in support of building societies who could use that capability, that is on my agenda for this year because I think it is important to support the movement. So: the world's largest mutual, still holding true to that purpose.

I am guessing a number of folks in this room are in this place: if you have an organization with a really clear purpose, values, and history, the history is what gives you the relationship, trust, credibility, and intergenerational buy-in and belief. But your history is also there in the wires, systems, processes, policies, people, and politics. When that builds up, it is pretty messy. We have archaeological excavations in IT. We have N strata of, "Wow, we built that thing on that thing, and it is still live?" "Yes, because half of 1% of the customer base still needs it."

We have multiple instances of stuff that serves the same purpose, serves it slightly differently, slightly more or less controlled, slightly more or less nimble and responsive. It is a real bugger's muddle. I would be unsurprised if there were not others, particularly with older organizations, or harder ones fashioned from many organizations. That is ugly.

All this stuff about greenfield and CI/CD and microservices: okay, in your context, you have a hot mess of an IT estate. How do you apply the principles and values? How do you not allow tribalism, protectionism, and all the things that have built up over time, not just with the systems but with the people who manage the systems? That is where we then do not meet our members' expectations. Really openly, if members sometimes heard or saw things that happen in our organization where we are not doing things in members' interests, but in the interests of particular fiefdoms, it would be almost in direct challenge. If you tie that across the entire value stream, it is quite often actively at odds.

So there is an increasing gap between what we can achieve, our responsiveness, and our ability to support members tomorrow as well as today and all those years. We are getting further behind. What happened for us followed Simon Wardley. I am going to steal from Simon Wardley. DevOps Enterprise Summit gives the opportunity to hear from awesome industry speakers. This is absolute plagiarism.

Simon Wardley talks about three archetypes for innovation in any system. Pioneers are the people who will try, try, try, and try again. They are unfazed by failure because a failure is an experiment not to be repeated. They are learning and adaptive, exceptional foragers and finders, but they fail an awful lot. Every failure should not be castigated; it is a learning opportunity. You need those pioneers, because if you are trying to explore brave new frontiers and find the next seam of gold, if you do not have them, you are in trouble.

If you want anything of scale, something that can be a product, sold, marketed, industrialized, you cannot have pioneers without settlers. The pioneers find something half-baked that might work; settlers make something viable from it. They take pioneers' ideas and make them real. If you have all the ideas in the world but no execution, you struggle.

Then, as you execute, you need town planners: guardrails, controls, industrialization, everything about exploiting value from the thing you found. If you want to do anything at scale, market a product, sell a product, and move on, you need all three. They have to respect each other: their craft, their personalities, and inclusivity. When we look at diversity and inclusion conversations, this is at the heart of inclusivity for me. It is not color, age, skin, history. It is inclusivity of thought and how people behave. If you do not have these three, you may keep finding great ideas but never execute on them; or you may exploit the last ounce of economic value from what you have created but not find new territories. You have to respect each other, love each other, and respect craft.

In our context, we have been pioneers. We were the first UK internet bank. We were first with Apple Pay and a swathe of other things. We put the first self-service digital offering into a branch context. But over time, as we started to scale, we necessarily got into settling and town planning. We moved from craftsmen and technologists inside the organization to thinking about products. At that point, products were monolithic things that claimed to solve all ills. We went all in on big products, took a long time to put them in, increasingly used outsourcing and partners, who went to offshoring, who created development centers, which became factories that had to be fed and watered and needed process, governance, and control. Over time you get to a slightly turgid, non-pioneering factory. Factories and the mechanics required to support, run, and optimize factories are not the world we live in. It was Taylorism. That was history.

The thing that changed it for us was our CEO. It was not an extinction-level event, existential threat, or the Blockbuster/Netflix story. This guy came in and made a real difference because he cared passionately about reconnecting to purpose. He cared passionately about leaving people able to feel connected, to experiment, and to feel accountable for what they did, safe in the knowledge that experiments were not failures but learning exercises. He has been the catalyst. You see it now: 15 million members, building society nationwide. That language matters. Building society nationwide is what I want this organization to be about. It connects everything we do back to purpose.

We did one of these, and my friends David Brear or Jason Bates will say, "Not a fan of Agile at scale, not a fan of third-party consultants, not a fan of blah, blah, blah." There is a time and place for it. If you have organizational inertia and no appetite to change because it is too crushingly hard to change from nowhere, bring folk in. If you can afford it and you know they are coming in to do something you cannot do, to help you get on and do it yourself, I have no problem with it. We worked with McKinsey and Sapient, and they were incredible at helping us get started. McKinsey have moved on. Sapient are still transformation partners, but increasingly the muscle is us, the thought leadership is us. It is us here, learning and growing, and we work with partners. But we needed this.

What was it there to do? We targeted digital because it allowed us to go greenfield and public cloud. We could say we would use systems of record and still originate onto a Fujitsu mainframe from the 1970s, but do everything else out and go digital all the way down. It was about targeting member satisfaction and efficiency benefits. We were bloated and costly, and because we had become town planners, we were less lean and less responsive.

It was about improving speed, but not speed for speed's sake. It was speed as value: velocity linked to what we need to do. It was not just improving the IT engine. It was creating what, for us, was an Agile capability within the organization. We did it by setting out a program and focusing on three things.

First: outcomes, products, not projects. You hear it everywhere. Genuinely, products, not projects. We have no project managers. We have product owners who care passionately about their product and can champion what the product is for. We surround them with incredible people who can make things happen and engineers passionate about creating things. We focus on the product, iterate the product, and experiment on the product.

Second: creating the modern conditions for speed, all about public cloud, CI/CD, full use of as-a-service capabilities, and the belief that not everything you do is the best. You can and should partner. You can and should use offerings as a service. You are never going to be the best at everything in your context.

Third: learn by doing. Accept failures and learning opportunities. Take risks within reasonable bounds. Agree controls with the town planners, but take risks.

I am going to hand over to somebody who genuinely is leading in it. Jen exemplifies what we have done as an organization. She is a standout superstar of having made this happen.

Jen Marsden

What did we do then? We picked some of those pioneers from around the organization and put them into teams we called hubs. I run the home buying hub, and I am the delivery lead for the home buying hub. We picked people from all the relevant areas we needed: business, delivery, IT run, coding, engineering, and gave them a common purpose. For the home buying hub, we wanted to enable our customers to take a remortgage product from somewhere else and bring it to Nationwide. We gave them a vision and purpose, phrased in terms of making it easier, slicker, and faster for customers, focused around the customers and the product. We sat those people side by side and co-located them. That was a real change for us.

We were traditionally waterfall and ran in silos. The product guide would come see the business analyst, who would write a huge document, and they might get it back three weeks later to sign off. Then it would go to a development center, which might not even be in the UK, and they would build it. On and on until you finally saw the final product. Then there were defects or things you did not intend to be that way. Instead, we sat people in the same room side by side and said, "Right, there is your vision. Go. Work your way through it and work with each other to make it a much more iterative approach."

We also created the modern conditions for speed. We built our own digital accelerator platform, exactly as Rich said, based around public cloud, enabling DevOps, and empowering the team to work that way as well. That was different for us. We had siloed IT run before. Now we were saying to the team: "No, you are going to run it. You are not only going to build it, you are also going to run it." That gave me interesting challenges when it came to call-outs, but we got through it. We built shared digital capabilities that we could build on to create more hubs. Everyday banking was centered around banking needs, not just a bank account but maybe savings and credit card products. We aligned people within hubs to specific product streams, not specific projects.

Then we set up the environment around them and enabled them to learn by doing. We brought in agile coaches and McKinsey, as Rich alluded to, but we set up the conditions that enabled them to think about what the customer needs and iterate through it. Go through a design phase and come up with a customer-led proposition: what do they really want from you, not what do you need from them? Then build up the MVP, iterate through it, and do not gold-plate it. That was a real challenge: everyone wanted to get everything in day one. It was a real moment when we said, "Actually, our first MVP is only going to deal with 3% of our business." We got a lot of challenge about why we existed at that point. But we were able to demonstrate we could get it out fast, iterate, and build on it.

In the last 18 months we have seen some really positive outcomes. We launched OCR technology into the mortgage experience, the first in the UK mortgage market to let you take a photo of your payslip and have us automatically read it behind the scenes, with zero ops intervention needed. We focused on member outcomes. We built technology that can transfer across all the journeys, such as ID&V that you can use for your bank account and mortgage product. We allowed teams to self-service, so they can provision the environment without going to another team, another department, and raising a work order.

More importantly, the change in the people has been the biggest success. We built real supporters around the business. People in my team embraced it, loved the way of working and the speed it gives them, and some have taken it back to their business areas. Trish learned with us, exploited everything we had to give her, went back into risk, and our risk function are now embracing Agile and doing Agile audits. You are starting to see it pop up in more areas of the business. There are more Kanban boards than I can count around different departments, and I am sure our Post-it note order has gone through the roof.

But it has not been easy. When you prove it is successful and it can work in your nice small bubble, everyone says, "Great, roll it organization-wide." How do you do that with an organization the size of Nationwide? We bumped into lots of challenges. When we set up, we were given a golden ticket. We had executive committee support. We had a Friday afternoon meeting every week where we told them where our problems were and why we could not go as fast as we wanted to, and they sorted it for us. But that had consequences. We were seen as a proof of concept: not scalable, unable to roll out any further. Yet we had deliveries regularly going out, releases every month or every few weeks. The evidence was there, but we were still seen as a proof of concept.

Tensions emerged. There were times when other parts of the organization had issues with how we were doing stuff. Maybe I was breaking a long-established business process. Maybe I did not have a document because I had a user story, not a requirements document, so their process could not possibly work. Or we were challenging how things were done. IT run was in a separate part of the organization, and here was I saying, "I am going to run my own services. My developers are all on call. They are going to fix what they have built, and there is no handover." That led to interesting and challenging conversations.

What have we learned? Lesson one: tell stories. Align your teams around a real common vision that everyone can get behind, tell that story, and continue to tell it. Mortgages is Nationwide's core business. You cannot argue with a story that says, "We want to improve our mortgaging experience, and it will give us this member benefit." That galvanizes everyone and allows them to run in the same direction. Continue to tell stories, including ones around failure. That was a real culture change for Nationwide; we like to greenwash lots of stuff. My team set out to do something in a day and did not achieve it. They could have done with about two more hours, and they would have got there. It was not massive, but we told that story and why. The next time they did it, they did it in a day. We were able to tell that story and prove the way we were working.

Lesson two: lean into the myths. I cannot count the number of times myths around Agile have been thrown at us, and I still hear them today. My favorite one is that Agile means no planning, no governance, and it is all Post-it notes. If you turn the air conditioners on, the Post-its will fall off the wall, and how can you possibly know what you are doing? I heard it just last week. Rich says he heard it at Exco level. We are still facing into that one.

Lesson three: do just enough. We got good at talking about doing just enough for the customer product, the MVP, and iterating and building on it, but do it with your technology too. We started using Jira. Nationwide had not used Jira before. Everyone then wanted Jira. Do it just for you and then roll it out. Otherwise, you get stuck in the enterprise process of trying to sign something off and implement it for the whole enterprise before you have proved it works for you.

Lesson four: back everything up with data. Data is your most powerful ally. It is the fact-based proof of your vision. You can chat about new ways of working being better and faster, but your data dashboards show it and show the tangible and member benefits. One of our dashboards demonstrated the actual journey we built. It was well received by the business because they suddenly had more visibility and could see side by side how fast we were running, how it was performing for customers, and how it was performing for regulatory outcomes. We could iterate off the back of it and take improvements from it. One week, the dashboard showed our calls had suddenly spiked. Very quickly we translated that back to the release we put in the day before. We iterated, changed it, and dropped call volumes down again. That speed of turnaround was backed by data.

To finish, our key takeaways: connect your transformation to purpose. Give everyone a vision they can align behind, feel they own, drive, and want to move forward. Set up the enablers around them. Allow them to organize as products, not projects. Create the conditions they need and allow them to learn by doing. Give them freedom and space to do it their way. Finally, do not forget the culture. Culture is the biggest point: creating the team environment, encouraging storytelling, busting myths, and giving them accountability and true empowerment to become that team and direct it their way without feeling micromanaged.