- Beatriz Martin, UBS Investment Bank’s chief operating officer, told Business Insider the Swiss bank spent 2019 overhauling how its investment bank organizes teams that develop and update technology.
- In 2019, the bank created more than 200 small, multi-disciplinary teams — called hybrid pods — that encompass roughly 1,300 employees spread across the bank that focus on specific goals.
- Martin said increased productivity, not cost reduction, is the goal of the approach. Still, UBS will need fewer product managers to get projects done that it used to thanks to the new structure, she said.
- Click here for more BI Prime stories.
The line between dealing with clients and building products for them has blurred in recent years on Wall Street, and one investment bank has embraced the trend.
Beatriz Martin, UBS Investment Bank’s chief operating officer, told Business Insider the bank spent 2019 changing the way it organizes teams in an effort to foster more collaboration and efficiency when developing and updating tech.
The bank created over 200 small, multi-disciplinary teams — called hybrid pods — that encompass roughly 1,300 employees spread across the bank focusing on specific goals. People from technology and operations teams work directly with those on the business side.
Martin says creating more of a dialogue between the various departments, as opposed to having them operate separate from each other, makes everyone feel more engaged in the work they do.
“This is a people business, and when people feel that they are making a difference and they are contributing positively to a good outcome, their motivation levels are much higher. What you get out of your employees is definitely a much better quality of work,” Martin said. “These pods help contribute to that state of mind.”
The decision to take a new approach to tech development is tied to two factors.
One was the investment bank’s restructuring in the spring of 2018. The operations and technology teams, which account for roughly 9,000 employees, began reporting in to Martin. At the same time, Wall Street was continuing to digitize, with tech playing a greater role in more of the client-facing roles on the business side of banks.
“For a while, IT wanted to see the business more involved in projects, and also the business wanted to see IT more involved in business change,” Martin said. “The fact is that tech felt a bit distanced from the business, and the business always felt that, given the cost of tech, they could get more.”
In large part, the disengagement between the IT and business teams was due to a traditional waterfall approach to development that kept groups separated. A directive would come down and a string of hand-offs would occur between different teams as each group handled their specific responsibility before passing it off to the next in line.
The hot potato-style process left something to be desired. The decision was made to organize hybrid pods that were made of people from different divisions working together.
“We are trying to minimize the handovers and any bottlenecks, because the teams are smaller, the deliverables are smaller,” Martin said. “Everybody has a clear vision on what needs to get done and how to do it.”
The hybrid pod approach can help shorten timelines
Take Neo, UBS’s cross-asset trading platform, as an example. A pod was established to focus on the system’s user interface.
As a result of the change, the team was able to drastically reduce the time it took them to roll out new releases, shortening the typical timeline from 20 working days to five, Martin said.
It’s not just about getting things out faster. The teams are also able to make adjustments to products more seamlessly as the people developing the tech and the ones speaking to clients are completely disengaged.
“The feedback loop has shortened so much that we are able to adapt faster,” Martin said. “This makes them much more responsive and also able to change priorities and the business requirements as they get feedback from whoever are the NEO users day-to-day.”
When technology leads to more efficiency, the question of cost savings typically follows. However, Martin says that’s not the goal of the hybrid-pod approach. The focus is on productivity and creating a greater sense of ownership amongst all teams regarding the technology that’s developed.
Fewer product managers, new performance benchmarks
That being said, Martin does see one area UBS could have reductions: Product managers. While Martin said a place for the role will always exist at the bank, she believes the proportion of PMs that UBS will need in the future will be smaller as a result of the usage of the hybrid pods.
“We found that it is easier to marshal the program forward,” Martin said. “The communication has improved within the pods.”
To be clear, Martin doesn’t believe hybrid pods are appropriate for every part of the bank. Bigger structural changes are still better off being handled the old way, she said.
As for the pods, Martin doesn’t anticipate adding more to the bank. Instead, 2020 will be about demonstrating how effective the approach is. That means creating key performance indicators to give more transparency to the productivity they are able to create.
“We need to prove the concept,” Martin said. “We need to make sure that, we are achieving better outcomes … it doesn’t make any sense to deliver faster if we are going to have deal with more problems afterwards.”
SEE ALSO: UBS sent its bankers an email listing books like ‘Charlotte’s Web’ to help them deal with change as it reportedly mulls job cuts. Read the internal email here.
Join the conversation about this story »
NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here’s how the company makes money.