The end of the COO/CIO experiment at Barclays?
Kheradpir leaving to go back to the Telco industry less than three years after he joined Barclays cannot be seen as a ringing endorsement for the effectiveness of bringing into a bank at such a senior level someone with no experience of the industry. Certainly there is an argument that bringing someone in from outside the industry brings a fresh perspective and enables them to ask the questions, just like the small boy in the story of the Emperor with no clothes that no one else dares to ask for fear of looking stupid. There is also the perspective, often argued by the consultants McKinsey that bringing someone in from another industry opens up the opportunity to leverage what worked well in that other industry. No one could honestly argue that banking doesn’t need to change. However banking and specifically retail banking in the UK has experimented with this before. The major banks hired retailers to teach them how to put the retail into retail banking. The ramifications of that are still being felt today. Yes bank branches may look smarter, may look more like GAP stores from the beginning of this century, but would there have been the PPI (Payments Protection Insurance) misselling scandal without those retailers for whom selling extended warranty policies which customers didn’t want or need was secondnature?
There is fundamentally nothing wrong with bringing in a senior executive from a different industry to challenge the way that things are done and have been done for many years, to argue for treating customers differently, to change the way that IT systems and change programmes are delivered but for this to succeed there are two critical requirements.
Firstly the new executive must not be so prejudiced or arrogant that they don’t listen and try to understand why the banking industry operates in the way that it does. That doesn’t mean that once they have taken the time to listen and to understand the industry that they apply their experience from outside the industry and fundamentally change the way that banking is delivered.
Secondly the new executive needs to surround him- or herself with open-minded experienced banking executives who he or she can rely upon for their integrity and to provide advice and a safe environment to allow the executive ask the dumb questions. The executive also needs to be confident that the executives working for him/her will tell them when they are talking rubbish. This sadly appears not to have happened in the run up to the financial crisis.
Kheradpir by making the COO and the CIO jointly responsible for the performance of the business units working for him was acknowledging that IT is not simply a supplier to the business of banking but that it is absolutely fundamental to being successful in banking. He was also recognising that today there are not that many banking executives out there that have the skills, experience and competencies to master both the COO and the CIO roles and therefore the next best step was to make them jointly accountable. Antony Jenkins, CEO of Barclays saw Kheradpir as one of the new generation of Renaissance COOs who are young enough to have been brought up with technology that it is so deeply ingrained in their DNA that the barriers between operations and IT can be effectively broken down by being encapsulated in one person.
With Shaygan Kheradpir moving to the CEO role at Juniper Networks the result of the experiment that Barclays undertook can only be inconclusive. Kheradpir simply will have not stayed long enough at Barclays to prove that the new model worked, whether it would have fundamentally changed the way that Barclays delivers banking which is a loss not only to Barclays but also to the banking industry that was watching with interest.