New WOW at Equitable (A): A New Way of Working Custom Case Solution & Analysis

1. Evidence Brief: Case Extraction

Source: Equitable (A): A New Way of Working (HBS Case 525-004)

Financial Metrics

• IPO Status: Equitable Holdings completed its initial public offering in May 2018, spinning off from the French parent company AXA.
• Efficiency Target: The organization committed to a 160 million dollar post-IPO productivity target to be achieved by 2020.
• Market Position: One of the largest life insurance and retirement providers in the United States with over 160 years of operating history.
• Asset Base: Manages approximately 800 billion dollars in assets under management as of the case period.

Operational Facts

• Headcount: Approximately 10,000 employees and 12,000 financial professionals across the United States.
• Organizational Structure: Transitioning from a traditional functional hierarchy (Silos) to an Agile model consisting of Tribes, Squads, and Chapters.
• Squad Composition: Cross-functional teams of 8 to 10 members including product owners, developers, and designers.
• Product Portfolio: Includes individual retirement products, group retirement, and life insurance.
• Physical Workspace: Redesigning offices to open-plan layouts to facilitate collaboration and daily stand-up meetings.

Stakeholder Positions

• Mark Pearson (CEO): Views the New Way of Working as essential for speed to market and surviving the low-interest-rate environment.
• Nick Lane (President): The primary driver of the Agile transformation; believes the organization must act like a technology company that happens to sell insurance.
• Jeffrey Hurd (COO): Focused on the operational mechanics of the shift and the cultural impact on the 10,000-person workforce.
• Middle Managers: Face the most significant disruption as traditional command-and-control roles are eliminated in favor of Chapter Leads and Product Owners.

Information Gaps

• Implementation Costs: The specific capital expenditure required for office redesigns and training programs is not detailed.
• IT Technical Debt: The case mentions legacy systems but does not quantify the cost or time required to modernize the backend to support Agile speed.
• Retention Data: Early turnover rates among senior staff who were not selected for new Agile roles are not provided.

2. Strategic Analysis

Core Strategic Question

• Can a legacy financial institution successfully adopt a decentralized Agile operating model to meet post-IPO efficiency targets while maintaining regulatory compliance and service quality?

Structural Analysis

Applying the McKinsey 7-S framework reveals the following:

• Strategy: Shifting from product-centric to customer-centric delivery. The current pace of product development is too slow for a competitive public market.
• Structure: The move to Tribes and Squads breaks the 160-year-old functional silos. This is a high-risk transition for a highly regulated entity.
• Shared Values: There is a fundamental conflict between the traditional risk-averse insurance culture and the Agile principle of failing fast.

Strategic Options

Preliminary Recommendation

Equitable should proceed with the Phased Wave Rollout. This approach balances the need for speed with the reality of an 8,000-person legacy culture. Starting with the Individual Retirement business provides a high-impact proving ground while protecting the more stable Group segments during the initial learning curve.

3. Implementation Planning

Critical Path

• Phase 1: Leadership Alignment (Months 1-2): Finalize Tribe and Chapter Lead selections. Conduct intensive training on the difference between managing people and managing work.
• Phase 2: Wave 1 Launch (Months 3-5): Deploy Agile squads in the Individual Retirement business. Establish the Agile Management Office to track metrics.
• Phase 3: Support Function Integration (Months 6-9): Transition Finance, HR, and Legal into a service-oriented model that supports the squads rather than acting as a bottleneck.

Key Constraints

• Regulatory Compliance: Agile squads must include compliance officers or have clear guardrails to ensure that speed does not lead to legal violations in product filings.
• Talent Capability: The existing workforce may lack the digital skills required for an Agile environment. Upskilling is the primary bottleneck.
• Legacy Infrastructure: The speed of a squad is capped by the speed of the mainframe systems they must interact with.

Risk-Adjusted Implementation Strategy

To mitigate the risk of the frozen middle, Equitable must implement a transparent internal talent marketplace. Managers not suited for Agile roles should be offered clear exit paths or transition roles into specialized Chapter functions. Contingency planning includes a 20 percent buffer in the product launch timeline for Wave 1 to account for initial squad friction.

4. Executive Review and BLUF

BLUF

Equitable must execute the New Way of Working to meet the 160 million dollar productivity commitment made to shareholders post-IPO. The transition from a 160-year-old hierarchy to an Agile Tribe-based structure is not a choice but a requirement for survival in a low-interest-rate, digital-first market. Success depends on the redistribution of decision-making authority from senior executives to Product Owners. Without this shift, the new structure is merely a rebranding of the old bureaucracy. The plan is sound, provided the organization accepts that early productivity may dip before it accelerates.

Dangerous Assumption

The most consequential unchallenged premise is that the current workforce can be retrained for Agile. Insurance professionals trained in a 160-year-old tradition of risk mitigation may never adopt the fail-fast mindset required for true agility. If 30 percent of the staff cannot adapt, the model will fail regardless of the organizational chart.

Unaddressed Risks

• Regulatory Lag: State-level insurance regulators do not operate at Agile speed. The plan assumes that faster internal development leads to faster market entry, but the external approval bottleneck remains unchanged.
• Systemic Fragmentation: Moving to Squads risks creating dozens of mini-silos. Without strong Chapters, the organization will lose its architectural consistency and technical standards.

Unconsidered Alternative

The team failed to consider a Green-Field approach. Rather than transforming the 10,000-person legacy organization, Equitable could have launched a separate, digitally native business unit to capture new growth, while managing the legacy business for cash flow and gradual consolidation. This would have insulated the core revenue from the chaos of a total transformation.

Verdict: APPROVED FOR LEADERSHIP REVIEW