Today’s interview is with Andrew Lawson, Chief Product Officer of Zopa.com, a UK online personal finance peer-to-peer lending company founded in 2005. Andrew joins me today to talk about customer service, customer obsession, what it means to them and the shift to self-organising teams that they have recently undertaken.

This interview follows on from my recent interview – Customer service and moving from the enterprise to the flexiprise – Interview with Keith Leimbach – and is number 230 in the series of interviews with authors and business leaders that are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.

Highlights from my conversation with Andrew:

• Capital One was an early pioneer in big data, data driven decision making , customer centricity and human centred product design.
• Back in 2014, a lot of banks were talking a lot about being customer centric but when you get inside the banks there was little evidence to back that up. [Ed: Have things changed?]
• Customer obsession is very much behind the growth of peer-to-peer lending.
• When Andrew joined Zopa in 2014 they were a team of around 50 people lending about £20mill per month.
• Zopa was founded to “make money simple and fair”.
• Zopa was awarded Superbrand status in the early part of 2017. The annual Superbrands’ league table is based on independent research to identify the UK’s strongest brands, as voted for by marketing experts and thousands of British consumers.
• Zopa still thinks of itself as a start-up despite the fact that they have been going for 13 years now.
• In that time Zopa have never spent any money on growing their brand and have grown organically and via word of month.
• Zopa has won a bunch of customer service awards that celebrate and recognise their approach.
• Many companies talk about going to the ends of the earth for their customers but for Zopa it is deeper than that as the firm was founded to solve a customer problem: over a decade ago, they saw that people borrowing money were being charged high rates and those able to invest money were getting low returns. As a result, everyone was losing out. They believed that by matching borrowers and investors directly, both would be better off.
• Many firms are treating agile as an initiative rather than as a way of working.
• Many people people that organisations will have to adopt more flexible, adaptable and agile ways of working and organising themselves if they are to compete in the coming years.
• Zopa has recently moved to a system of self-organising teams and that is helping them to achieve more and deliver more on their customer promise.
• When Andrew arrived Zopa was trying to operate in an agile way. But, they were not very good at it and it wasn’t really working for them.
• They would spot opportunities to grow and improve the business but they were not able to execute at the pace that they aspired to. As such they ended up being restricted to 1 or 2 major initiatives each year.
• Towards the end of 2015, they started to understand that they had to change the way they were working if they were to realise their ambitions.
• On further inspection, they realised there were both technical and organisational and cultural barriers that they would have to surmount to facilitate that.
• The technical problems were largely rooted in their legacy platform, which wouldn’t allow different teams to work on different areas of the platform simultaneously without causing problems. As a result, they develop a new platform that would allow them to do this.
• On the organisational and cultural barriers, they started with a question to their developers and business people: “Why do you think it is that we cannot land the right stuff at the right time?”
• The answer, mainly from their developers, was that they felt that they didn’t feel any sense of ownership of what they were doing.
• There was a disconnect between developers not really understanding what the business needed and the business people not really understanding the technology.
• “How do you think we can we solve that?” became the next question that was posed.
• Looking into that they came across Spotify’s approach of Tribes and Chapters (Find out more here and here).
• Their model is based on cross-functional teams that have ownership around different parts of their platform.
• Replicating that sort of structure, Zopa believed that would solve many of the ownership problems, allow them to deliver more and have more effective innovation through the right mix of business people and developers.
• However, they spotted a few problems within the Spotify model for their particular context, particularly around the risks associated with decision-making, compliance and regulation.
• For Spotify their model focuses on mainly the engineering part of their business but Zopa wanted to go further and implement a model that encompassed their whole business.
• As a result, they carved up their business into different tribes e.g. they have a tribe that is called ‘Unsecured Personal Loans’ and their role is to grow that part of the business. That tribe is made up of marketers, copy-writers, UX designers, front and back-end developers, business analysts, data scientists etc.
• People are appointed to or assigned to tribes.
• Tribes are also broken down into a further series of squads.
• They don’t have a matrix organisation or people organised into functions but rather appoint people into business units/tribes.
• They started talking about the problem that they were facing in Oct 2015 and by the beginning of Jan 2016 everyone had moved into the new system of tribes.
• In the first quarter of 2016 they delivered more than they had in the whole of 2015 with the same number of people.
• They lost one or two people along the way but it has allowed them to more easily grow and scale the business over the last 18 months. It has also allowed them to attract and retain talent as their way of working is much more interesting and attractive to many people.
• As much as they have carved up their platform, there are still dependencies between tribes and there needs to be huge coordination between their tribes.
• Ultimately, it’s all about creating an environment where you find and allow great people to go and solve problems.
• Andrew’s role is all about ensuring they have the right people in the right tribes solving the right problems. It’s not about him being able to come up with all the answers as that just doesn’t scale.
• They use their tribes not just to focus on optimisation problems but also on innovation and new product launch problems such as the tribe that has launched a new ISA, the tribe that has developed secured auto-lending and another tribe that is working on building Zopa a bank that will sit alongside the existing business.
• In terms of mistakes, initially they found that their tribes went too tribal and it was difficult seeing what was going on within the tribes. That was a problem particularly given the level of technical and strategic dependencies that exist between tribes.
• Therefore, they had to find a way of better aligning the tribes.
• The way they did that was to use a system called ‘Objectives and Key Results’. This was pilfered from Intel’s ‘Management By Objectives’, which, more recently, has been popularised by Google.
• The way that that works is that they set a company objective and then ask what are the key results that will tell them that they are hitting that objective. That is done on a quarterly basis.
• The tribes are then asked what they can do in service of achieving that objective and results in terms of ideas, projects and initiatives.
• Then, there is a negotiation between that tribe, Andrew, other leaders and the other tribes so that everyone is aligned.
• However, all of the ideas come from the tribes so that they end up owning the ideas and setting their own roadmaps.
• On a day to basis, their teams work in a way that is akin to a modern agile environment and are able to pick the right model (1 week sprints, 2 week sprints, kanban etc) depending on their context and preferences.
• Andrew says that he believes that they were successful in this approach as they didn’t go half-in but went all in from the Board level down.
• Fortunately, they were at a size and had a level of buy-in that made that easy to do.
• As is the nature of agile working, they are constantly tweaking and looking for ways to improve.
• They are also still embedding their system of ‘Objectives and Key Results’ and have a weekly scrum of scrums meeting where their tribe leads, squad leads and other stakeholders get together every Tues morning so that they can drive alignment, ensure transparency and unpick/work out dependencies.
• Previously, that communication and coordination went up through management. But, that isn’t scale-able either.
• Other challenges they have faced include the management of people from different backgrounds, skillsets and with different experiences.
• As a result, they have had to invest quite heavily in people management skills and training.
• Given that they are now 250 people in London, the next big challenge for them will be how do they move this system into a remote context.
• The heart of their success has been in creating those relationships where there weren’t relationships before i.e. between business people and tech people. It’s easy when you sit next to them or are in the same office but more difficult when you are in different locations, time zones or even speaking different languages.
• For anyone else embarking on this sort of organisational structure, unfortunately there aren’t any obvious books or resources that they can go and read that pull lots of different resources together.
• However, it would make a good book, series of blog posts for someone to write up (Ed: another and new book idea?] or central resource where folks can come together to discuss problems, approaches, share ideas and lessons learned.
• This approach worked for Andrew and Zopa because of the problems they were facing and the position they were in. But, he is not ideological about it.
• They embraced a lot of Spotify’s approach as there are lots of things written about them and by them on how they organise themselves (videos, talks, blog posts, slide shows etc). Google ‘Spotify and Tribes’ to find more.
• Their step change in productivity in 2016 gave them a new found appetite and ambition and a lot of this is behind the initiative to build a next-generation bank that sits alongside the existing business. That is set to launch sometime in 2018.
• To drive their customer obsession culture they have actual customers come into the office and actually go through the experience with members of a tribe watching on…be that investing money through peer to peer, withdrawing it or taking out a loan etc.
• That has been incredibly powerful in terms of driving their culture of customer obsession.
• It’s incredibly powerful and motivating when you see someone struggle with something that you ‘own’.
• Wow service/experience for Andrew starts with the customer and solving a problem they face. Too often customer service is a team that is set up to solve the problems that are inherent within the products/services that have been created.
• Don’t make assumptions around customers needs. Go and ask then as you will almost certainly be wrong.
• Zopa are always on the look out for great people so check out their vacancies or just get in touch.

About Andrew

Andrew Lawson is the Chief Product Officer at Zopa, the UK’s largest, and the world’s first peer to peer consumer lending platform.

Andrew has spent his career in data driven, customer centric growth, initially at Capital One, before doing a direct banking start up in Spain. He then spent seven years at the global management consulting firm Oliver Wyman focused on driving growth across “mass consumer” industries in the UK, Western Europe and US. Andrew joined Zopa in 2014 to help in their mission of making money simple and fair.

Check out Zopa.com, their vacancies page, connect with Andrew on LinkedIn here and say Hi to them on Twitter @Zopa.

Thanks to wikimedia for the image.