Helmuth Ludwig

In 1988 I went to work for BT at the height of the size of the employee base post privatization, nearly 300,000. We were in the process of starting to migrate from analog telephony to digital and we were transitioning skills from the old world (hardware) to the new world (software). A plan was devised called Project Sovereign where we would downsize to around 100,000 people over 5 years. This plan had a lot of meat behind it, analysis from SI’s at the detailed level of all of the processes in the company and how they could / should / would be automated. It had a profound impact on the thinking going forward. People over 40 were offered voluntary redundancy under comprehensive terms and many took it, and 5 years later the transformation was complete. It was a complete top down organizational redesign based around process automation using software across the company. Having worked in a number of the large banks, I would argue the same opportunity exists now with Process documentation, work breakdown structure and the use of AI. If they treat it as another boom bust cycle they will have missed the opportunity… Some of the biggest universal banks are demonstrating they understand this thinking and are actively moving down the path, a couple aggressively, but if you are not, you will be forced to through margin pressure / net earnings of competitive companies. This will also take 5 years, but just like rolling out Windows NT first on the trading floors at Paribas Capital Markets allowed us/them to dominate derivative trading, the same will be true for the people who take the early risks on a holistic basis across their process architecture; it’s not just net margin from cost reduction, it’s agility and speed in launching products in the front office as well. Intel under Andy Grove is an obvious example of another company that did the same with process architecture, core business understanding et al. If you are in any doubt, the time is NOW!

Bank of America announced layoffs last week in the tens of thousands. Now Truist Bank (BB&T and SunTrust merger) might be doing the same.