ABN AMRO’s Impact Report: new ways of working
28 July: A diverse collective, including ABN’s finance team, have shown how to move an entire organisation to think differently. It involved guidance from the top and an open source way of working, reports Tim Stafford.
Back in 2018, ABN AMRO became the first bank in the world to publish an “Impact Report” – a report that stood alongside its traditional annual and integrated reporting, and provided “monetised” assessments of the impact (ie, those assessments were assigned a monetary value) it had on all capitals and stakeholders – positive and negative.
This was the first in an annual exercise, and 2019 saw a refined and improved version. Although an impressive achievement in and of itself, it also shows how a relatively small team can coordinate a much larger group of colleagues to work together on projects that aren’t part of their ‘day job’ and still produce something that makes a material difference to corporate performance, either in how the company is perceived or in what it offers to customers.
There are lessons here for many finance teams, as they will be asked across the coming months to coordinate and direct colleagues to work together on big projects, often to cut costs or find new avenues of growth.
Pushback and persuasion
Tjeerd Krumpelman, global head of advisory, reporting and engagement at ABN AMRO, told ICAEW Insights that to produce the report they had to work with people in the bank’s business lines and with colleagues in finance, strategy and sustainability, communications, and risk. Speaking to so many people and asking them to help with data and analysis can lead to pushback. “One of the most common themes was ‘Why should we be doing this? It’s never been done before,” says Krumpelman. People also asked, ‘Should we do it?’ as well as ‘Can we do it?’, he says.
But the most resistance they met with was once the data had been collated, analysed and turned into a set of conclusions. “When you bring it all together and discuss it at a more aggregated level with finance and communications and risk and legal, that’s when you get the more challenging questions,” says Krumpelman. Questions such as ‘Why are we doing this?’, ‘Is this true?’, ‘Is it accurate?’, ‘Does it expose us to lawsuits?’, ‘Is it assurable?’.” He says the team also encountered pushback from deciding to assign a financial value to each of the major impacts they recorded. People questioned the conclusions and constantly had to be reminded that impact reporting doesn’t have the same accuracy as financial reporting but that it is still useful to show monetised values to provide more concrete examples.
Integrated thinking community
Coordinating and directing a wide range of people is a tough task for any team, but when it’s more than 100 people and the vast majority either have no direct reporting relationship to you or are senior to you, it’s even harder. Krumpelman and his team managed this in two ways.
First, a lot of training and patient communication and explanation of what their goals are for impact reporting, how it supports and advances the bank’s strategy, and what it means for those they’re talking to.
Second, they built a sense of community among the group by giving them a name – the “integrated thinking community” – and by bringing them together frequently. “We spent hundreds of meetings explaining the ‘why’ and the ‘how’, and the ‘what’ of impact measuring and reporting. Integrated thinking is at the heart of this process” says Krumpelman. He goes on to say that while CEO and CFO involvement is crucial, “the most important was bringing these people together. If you just talk to them individually and say, ‘You are very important to our Impact Report’ [then] that’s nice, but if you bring them together with a network of people who are developing this together, then it works much, much faster.”
Open source approach
What’s most interesting about what the team have done, however, is to take an “open source” approach to developing all the new measurement and analysis required to create the report.
Krumpelman says that the work they did differed from the ‘set-the-strategy-and-implement’ approach taken with many big projects, and so set lofty but attainable goals and managed the group to hit them. “We were keen on having [the group] ‘open source’. And that is a consequence of the fact that this had not been done before; it is innovation in its purest form. If we were to say, 'Listen here is an iPhone, build me a better one', then you’d have a different team. But there was no banking impact report, so we had to think of how it could be done along the way.”
By setting a broad structure at the beginning about the methodology they would use (PDF), Krumpelman was able to let everyone contribute their expertise as they saw fit: “From that [we said] ‘Come, join us. Bring your expertise on mortgages, on corporate loans, on revenue streams, on social impact, on human rights, on whatever you can to improve the data modelling that we have already.”
Krumpelman and the team now want to cast the net wider and are building a coalition of banks to work together on improving how they measure the positive and negative impacts that banks have on all their stakeholders. And they’ve also developed a way of working that finance teams around the world can take to help their organisations change for the better, especially in this post-pandemic world. Whether that’s in launching new products, entering new markets, making big investment decisions or in telling the world about the impact you have on it.