Managing Complexity While Offering Simplicity: What’s Next for ING Direct Spain?

A lot of companies start out offering a single product or service. This keeps things pretty straightforward. After all, you can’t get any simpler than being a one-product company.

However, complexity increases as businesses grow. ING Direct Spain is a good example. In 1999, it began with one savings product. But by 2012 it offered payment accounts, credit cards, investment funds, pension plans, brokerage services, mortgages, personal loans, life insurance, and savings accounts. It didn’t strategically plan for this growth back in 1999. Instead, it grew into the new product categories based on customer demand, success, and an entrepreneurial spirit.

The big question for growing companies like ING Direct Spain is how to manage this increasing product complexity while maintaining simplicity for customers and employees. So far, ING Direct Spain has maintained simplicity by architecting for complexity and focusing on three key areas:

Culture

The company has retained a strict focus on customer experience and enterprise-wide thinking. It puts the customer first, making customer satisfaction a key metric. An example is the way customers open new payment accounts, which in most direct banks traditionally requires multiple steps. ING Direct Spain removed that hassle so customers complete the entire process in a single step. Even employees who aren’t usually in customer-facing roles—like many IT employees—have to regularly do customer-facing work (e.g., in a branch or call center) for a day to not lose touch with the customer. It recognizes that the only way to retain and acquire new customers is through satisfaction and recommendations and that everyone needs to share this mindset.

Organization

The bank also emphasizes cross-functional teams and holds forums to resolve cross-functional conflicts on multiple levels. This is coupled with financial incentives. Employees’ rewards also depend on the overall performance of the bank. They are incentivized to care about the entire company rather than just a single product or department. Simple rules keep employees focused on adding value when they add complexity. For example, every new product has to have the potential to generate at least 5% of the bank’s revenue.

Information Technology

Of course, any new products or changes to existing products will risk adding internal complexity, particularly in the IT systems. To address this issue, the bank emphasizes building and protecting digitized platforms that are designed for reuse and modularity. An example is how customers and call center employees rely on the same technology components. Instead of duplicating functionality, ING Direct Spain reuses the functionality despite different user interfaces. And with the vast majority of customers interacting with the bank digitally, the company involves IT architects early in the product development cycle.

As the bank continues to grow, the next big question is whether all of this is enough? What else should the bank do to continue managing the increasing complexity while maintaining simplicity?

What would you recommend to ING Direct Spain? Please post your comments below, and hear what others have to say in a video of a discussion of the ING Direct Spain case study with CIO Enrique Avila and former COO Werner Zippold. You can also read the full case study, “ING Direct Spain: Managing Increasing Complexity While Offering Simplicity.”

Martin Mocker is a research scientist at the MIT Center for Information Systems Research (CISR).