So powerful is the internet that to some people WWW is not just an acronym; it has become a concept with broader meaning.

Recently I was approached by a finance magazine in China to give a presentation on ING and its views as regards the role of IT in financial services. As I am very passionate about the WWW side of our business lines, the topic is something I looked forward to discussing.

While creating the presentation for the panel discussion, I found that I could share my views with a broader audience with an interest in this topic, and that we are moving into an environment where every organisation and person could be enabled.

I conclude in the presentation that winners in the banking space will be extensively e-enabled, EEE, which is possible through the WWW. As good examples of today’s winners I mention PayPal and ING Direct.

Looking ahead, a future high potential financial business opportunity could be built on the mobile phone IT infrastructure. For example, take a look at Obopay website for how peer-to-peer financial mechanisms could work.

Feel free to read or download the presentation and share your comments Anytime, Anyplace, Anywhere (on the blog…).

JK

In my entry of October 25 on TPE I briefly described step 2 of the Towards Performance Excellence framework. In short what step 2 does is to get from aligned strategy (visualized by a 5-axis grid) to aligned execution. This is achieved through the Six Drivers of Excellence: portfolio excellence, marketing excellence, organizational excellence, operational excellence, reputation excellence and financial excellence, which are shared across all the business units.

In step 3, to come to an aligned execution, these Drivers of Excellence are further specified and cascaded down to so-called first level drivers and second level drivers. Under Reputation Excellence, for example, we have identified the following first level drivers: corporate communications, legal and compliance. Operational Excellence comes with these first level drivers: corporate security, e-Business, IT, operations, Procurement and Operational Risk Management.

Note that TPE is not an organogram and in case there is, for example, no e-Business department in a business unit, e-Business as a first level driver still exists and its executable dimension, the second level drivers, could be taken care of by more than one single department, like IT (e.g., building websites), marketing (e.g., internet portal partnerships) and human resources (e.g., e-Learning).

Let’s take a closer look at second level drivers. Below we follow an example on Operational Excellence:

Operational Excellence cascaded down to measurable second level drivers

The figure shows that for the first level driver “operations” five second level drivers were identified. These second level drivers function effectively as Key Performance Indicators (KPIs). For example, the second level driver “new business & underwriting” is expressed in responsiveness (target “Turn Around Time” (TAT) to improve from X days to Y hours).

Because all business units report in the same way we can compare TAT across the businesses. We see the differences in productivity (sales per agent) in countries and ask the right questions: is it a legal matter, is the marketing different or are agents differently equipped with tools? As the answers to these questions can be found in the first and second level drivers cascaded down in the relevant other ‘excellences’ we truly have a picture that has connected the dots.

And what is more, it is not only that we can ask relevant questions and get useful answers, TPE connects all the “to do’s” for all relevant functional and line managers – it makes the answers to questions executable. Through TPE all priorities are listed and results of actions are ‘connected’ to our Pay-for-Performance “dot”. Likewise, traditionally viewed organizational “dots” like Knowledge Management, Audits, Planning & Reporting are with TPE represented in a clear and transparent holistic framework and their relationship to one another, to the priorities as listed by functional and line managers, to the tough questions we sometimes face – these relationships are clear.

As mentioned in my earlier entry, it might be interesting to know that Richard Ivey School of Business, Canada (University of Western Ontario) has included a case study on the success of ING Asia/Pacific and the management philosophy behind the TPE framework as part of its MBA program.

Do let us know if you would be interested in receiving a copy.

JK

In an earlier entry on 31 August, I briefly mentioned the Towards Performance Excellence (TPE) framework that I introduced at ING Insurance Asia/Pacific. It is interesting to see that the Ivey Business School and later on the University of Chicago have published case studies or articles on TPE .

I firmly believe that there is indeed a need in academic circles to try to develop a strong management framework that does not rely on buzz words, often randomly chosen, but that offers a clear action plan for managers. This would be the business equivalent of IKEA’s instruction sheets that explain how and where all the parts of their furniture flat-packs fit together – and that is what TPE aims to achieve.

After the vision and mission are set by a business line, the action plan to realize the strategic direction is clearly communicable through the 5-axis grid visual shown in the earlier mentioned entry. This visual offers a satellite view of the core of our business and the strategic growth options available.

This picture shows that the execution part on the right comes from an aligned strategy (middle part) originating from the mission and vision at various levels.

For the next step of TPE, we need to translate the strategic direction into executable steps that can be measured to asses success.

To do so we first zoom in from a satellite to a helicopter view to arrive at the six drivers of excellence. These drivers are the top level drivers that cascade down all the way to concrete actions taken on a day-to-day basis by managers.

The six drivers of excellence to get to Performance Excellence are: portfolio excellence, marketing excellence, organizational excellence, operational excellence, reputation excellence and financial excellence. These drivers are generic and could be applied to any company. How, at Insurance Asia/Pacific, we cascade from these drivers down towards positioning HR, IT, accounting, product development in relation to one another (“connecting the dots”), I will discuss in a next posting.

These are the Six Drivers of Excellence through which the aligned strategy becomes executable.

For now I would like to conclude with the statement that to start to gear Towards Performance Excellence (TPE), all the six drivers need to achieve excellence. TPE does not allow for some drivers to achieve the basic threshold of performance and only one or two to excel. This - by the way - is just one of the several differentiators from the Balanced Scorecard from Kaplan and Norton who suggest that a company should focus in what to excel, e.g. McDonalds on “service” and Sony on “product leadership”.

With TPE our customers, employees and other stakeholders can rest assured that we strive to excel in everything we do and in a fully aligned way!

When I read that professor Muhammad Yunus and the Grameen Bank were awarded the Nobel Peace Prize for 2006 I first wondered why they would not have been given the Economic Prize …

As a banker myself, I find it an honor that a bank, and financial services in general, can be associated with peace. At ING we have some activities going on around micro-finance and I feel, while I extend my sincere congratulations to professor Yunus, that ING and the rest of the financial services industry will keep in mind that their impact can be much more than measured on economic parameters alone. Contributing to peace, the noblest of Nobel prizes - is also within our reach.

Strategy & Excecution
Many books and many articles have written about how important it is to implement or execute strategy. Many of these authors state that for a good strategy to be effectively implemented, one needs to develop a good ‘business model’ or framework. However, these books and articles fail to describe such a framework and how it would work in practice. At ING Asia/Pacific, we therefore designed a framework that gets us from aligned strategy to aligned execution through Towards Performance Excellence.

For an organization like ING that is expanding across a region diverse both geographically and culturally, operating across multiple business lines, broadening its customer base and developing different distribution platforms, it is increasingly difficult to coordinate and derive synergies, especially between line managers and functional managers, across Asia/Pacific.

How to get the strategy aligned
In a presentation from Bain & Co some years ago, I found an interesting framework; multiple axes that together define a web of activities relevant to a dynamic business environment. At ING, we modified the diagram to show the company’s specific 2005 circumstances:

To help us arrive at an aligned strategy, this has been very useful. As business units across the region started applying the concept in their own markets, communication and a common understanding of high level priorities are greatly enhanced.

Of course, to move from an aligned strategy to aligned execution is the next step within our Towards Performance Excellence framework. Next time, I will be pleased to share with you how that part works…

‘Cha’ or tea is widely used across Asia - one of the rare, unifying words and topics in an otherwise highly diverse region. When I took over as CEO of ING Insurance Asia/Pacific in 2003, I found that not only had I arrived in a dynamic and diverse environment, but that there was also a high level of ambiguity about a single strategic direction to manage all these businesses. However as with ‘cha’, we at ING have been developing a central theme to unify diversity - aligning our businesses’ strategy and execution under one ‘concept’.

Thank you for logging onto this site in which I will try to share details of some of ING’s life insurance and asset management activities, my ideas, and common concerns in the Asia/Pacific region. In expressing my opinions on ING’s progress in this region, I also hope that the ‘interactivity’ this site allows will give you a chance to express your opinions. A good dialogue - that is exactly my cup of tea!