The authors conducted interviews with senior executives of BBVA, and SDA participants and officers, including the Chairman, Chief Financial Officer and Head of Corporate Investment Banking. The authors of the study have underscored the challenges that the bank had to face to move from a static budgeting system to a dynamic model for the allocation of both budgetary and human resources, integrally aligned with its strategic priorities.
The implementation of the SDA at BBVA began in 2016 to improve the agility of decision-making processes, optimize available resources and reduce project execution times. A unique prioritization exercise in quarterly iterations that allows managers and teams to have a global overview of all initiatives. Currently, the SDA tracks about 2,000 projects per cycle to monitor their progress and reallocate resources if necessary.
A new management style that allows allocating resources to projects with a higher strategic impact, learning more about ongoing initiatives to assign them with the best available talent and creating value from projects in less time. A clear example of the latter is that the bank has managed to reduce the time that takes strategic projects to start generating value for the company by 25 percent, going from an average of 7.5 quarters in 2018 to 5.6 quarters in the second quarter of 2021.
A case study for other companies
Analyzing BBVA’s case study, the research briefing proposes four key elements that any company can apply to ensure a successful implementation of their strategic vision. In the first place, it is relevant to establish the value that the projects will create to ensure good prioritization. This is achieved through a continuous review process – quarterly in the case of BBVA – to monitor progress made and establish the goals for the next period.
The second point is the responsibility given to people rather than committees. A clear responsibility which, on top of the quarterly data on initiative results and their strategic impact, allows companies to assess and figure out how employees can best contribute to the success of initiatives and how to help them develop professionally.
BBVA’s SDA process reverses the usual allocation of resources, putting special focus on talent rather than just financing. Every quarter, the people that champion projects explaining why the set of initiatives they propose deserves the requested talent.
Finally, the study underlines the importance of carrying out this implementation in the most transparent way possible. With the SDA, all of BBVA’s strategic projects follow the same transparent process. Initiatives that cannot be proven to yield the expected value, may not receive the talent they request, or have their execution postponed through the next quarter.
A blueprint for success
All these elements have also contributed to bring about a shift in the bank’s corporate culture, which has been made possible by the involvement of senior management since the SDA was rolled out. Today, BBVA’s top executives have a greater and better understanding of the portfolio of projects under development, the deliverables and the people in the teams involved in each project. A continuous learning process that has improved reaction capacity and is enabling a more dynamic management approach.
The paper can be downloaded for free from MIT Sloan CISR’s website. The full ‘paper’ will…