Beta, Not Just Agile: Rethinking Transformation in Finance

SAMI

September 14, 2025 22 mins to read

In the high-stakes world of finance, agility has become a buzzword and a promise. Banks and insurance firms have scrambled to implement “agile transformations,” hoping to capture the nimbleness of fintech startups. Stand-up meetings replace status reports, Scrum teams blossom on trading floors, and innovation labs appear in corner offices. Yet something is amiss. The promised revolution often fails to materialize – projects still bog down in committee approvals, and new digital initiatives get strangled by old budgeting cycles. We’ve witnessed countless agile initiatives in finance decay away without delivering the expected adaptability. Agile, it turns out, is often just a veneer painted over an unchanged management model.

Why is true agility so elusive in big financial institutions? Because these organizations are built on an Alpha model – the old paradigm of command-and-control, silos, and centralized authority. Trying to graft agile practices onto this deeply rooted structure is like placing a sports car engine in a horse-drawn carriage. It might look modern on the surface, but it won’t run as expected. To genuinely achieve speed and adaptability – to get real agility – the finance sector needs more than process tweaks. It requires a paradigm shift in how we think about organizations. Enter the BetaCodex approach: a radically different philosophy that challenges everything about the traditional management playbook. If “agile transformation” is a new set of tools, BetaCodex is a whole new operating system for the organization.

Table of Contents

The Agile Mirage in Traditional Finance

Bold proclamations about “being agile” echo through executive suites. Yet many banks embracing Agile methods find themselves disillusioned. They form cross-functional teams and hire expensive agile coaches, but nothing really changes at the core. Hierarchies remain tall, departments (IT, Risk, Compliance, HR, Finance) continue to guard their turf, and decisions still climb up and down the chain of command. It’s agility in name, without impact. Is it any surprise these agile transformations keep stalling?

Financial organizations often treat agility as a project – something to implement in one part of the business (usually IT or digital) while everything else continues as before. A bank’s software development teams might adopt Scrum, but the bank’s budgeting process, annual planning rituals, and centralized controls stay rigidly in place. The result is dissonance: teams trying to move fast and iterate, colliding with a bureaucracy built for caution and stability. The entire system resists change. As one BetaCodex advocate observes, introducing agile practices into an old-school “Alpha” company is usually a hopeless endeavor. You end up creating new layers of agile bureaucracy on top of old silos. In finance especially, extra bureaucracy is the last thing anyone needs.

Agile methods weren’t doomed by intent – they were doomed by context. Two decades after the Agile Manifesto, the movement’s focus remained too narrow: fix the teams and everything will be fine. But in giant banks, the problem was never just the teams. It’s the very structure around them – the incentive systems, the planning cycles tied to the fiscal year, the risk controls, the “manage by numbers” culture. Tinkering with team processes while leaving those bigger mechanisms untouched is like swapping the café decor on the Titanic. It doesn’t change the course. No wonder so many “agile transformations” in finance delivered only incremental gains or fizzled out. The mirage was believing that a few new practices would magically make a 19th-century-style bank operate like a 21st-century tech company.

Is agility then a lost cause for finance? Absolutely not – but it won’t come from superficial changes. It requires facing an uncomfortable truth: the traditional banking organization model itself is the root of the problem. This brings us to the crux of the issue: Alpha vs. Beta – two fundamentally different ways to organize a company.

Alpha vs. Beta: Two Worlds of Work

“Alpha” organizations are the traditional model we see everywhere in finance. Picture the typical big bank or insurer: a multilayered hierarchy, siloed departments (lending, trading, compliance, HR, etc.), budgets and targets handed top-down, and power concentrated at the top. This Alpha model is built on control. It assumes that people can’t be fully trusted and must be tightly managed, and that the future can be predicted and planned in annual cycles. It’s a lot like a machine: each part has a fixed role, and central control tries to direct everything.

“Beta” organizations, in contrast, are organized as networks rather than strict hierarchies. They decentralize authority, integrate functions into small autonomous units, and focus everyone on creating value for customers rather than pleasing bosses. A Beta organization operates more like a living organism – adaptive, self-regulating, constantly evolving with its environment. Instead of rigid budgets and fixed plans, it uses flexible guidelines, real-time feedback, and local decision-making. Trust replaces control; transparency replaces secrecy; experimentation replaces compliance. People are assumed to be capable and responsible (what psychologists call Theory Y thinking) rather than lazy or risk-averse by default.

The Alpha vs. Beta distinction isn’t just jargon – it’s the heart of why most agile initiatives falter. Agile practices thrive in Beta environments, but suffocate in Alpha environments. You can’t have true agility with one foot stuck in the old world. It’s no coincidence that every truly adaptive, fast-moving organization in the finance sector (the rare few) has abandoned key Alpha habits. They broke free from the budget cult and the departmental fiefdoms. They reorganized around small, empowered teams focused on end-to-end customer outcomes. They pushed decision-making down to where the knowledge is. In short, they went Beta in order to be agile.

Let’s illustrate the stark differences between a conventional “Agile Transformation” (within an Alpha model) and a BetaCodex Transformation:

Aspect	“Agile Transformation” in Alpha Context	BetaCodex Transformation (Beta Model)
Structure	Adds agile teams alongside existing silos and hierarchy. The org chart barely changes.	Replaces hierarchy with networked cells or teams. Silos are dissolved; small units own outcomes end-to-end.
Decision-Making	Teams can decide on technical matters, but big decisions still climb the chain of command.	Decentralized authority: teams make most decisions locally, guided by clear principles and real-time data.
Planning & Budgeting	Annual budgets and fixed targets remain. Agile teams get shoehorned into yearly funding and plans.	Continuous planning: dynamic resource allocation replaces annual budgets. No fixed targets – adapt to reality in real time.
Leadership Role	Managers still “drive” results and monitor teams. Some get rebranded as Scrum Masters or product owners, but power structures stay intact.	Leaders act as enablers and coaches, not controllers. Middle management layers shrink or vanish; expertise and mentorship trump title.
Culture and Mindset	Talk of collaboration, but old assumptions linger (e.g. “people need incentives to work”). Fear of failure persists, limiting true innovation.	Trust-based culture: Assumes people want to excel. Mistakes are learning opportunities. Transparency and peer accountability replace tight oversight.
Transformation Approach	Often treated as a project or pilot program. May be led by a separate “Agile CoE” (Center of Excellence) while core functions watch skeptically.	Treated as a holistic reboot of the organization’s design. All functions – front, middle, back-office – change together. No one department (not even Finance) can do it alone.

(Alpha = traditional command-and-control organization; Beta = decentralized network organization.)

Notice how the BetaCodex approach isn’t just about doing a few things differently – it’s about thinking differently. It challenges deeply ingrained assumptions: that control equals safety, that employees can’t be trusted, that bigger is better, that headquarters knows best. Beta throws those assumptions out the window. It bets on people’s intrinsic motivation and on the power of small, self-organizing teams connected by shared goals and information.

For the finance sector, this is a radical departure. Banks have been the quintessential Alpha organizations for centuries – central vaults of power (quite literally), with layers of management ensuring compliance and risk control. The idea of loosening control can feel heretical. But consider this: in a world of rapid market changes, fintech disruptions, and systemic complexity, the old control-based model is actively making firms more fragile. As one expert put it, organizations today must be adaptive, fast, and dynamic-robust to survive in a complex world. You don’t get that by tightening the screws further; you get it by redesigning the machine.

Challenging the Comfort of Control

One of the biggest hurdles for any finance organization considering Beta principles is the illusion of control. CFOs and regulators love control – detailed budgets, risk checklists, approval matrices. These tools give a sense of security (“nothing bad will happen because we have rules for everything”). But this sense of control is largely illusory. Markets shift in weeks, if not days; a budget written last November is often irrelevant by July. And people, being human, will meet targets in ways that tick the box but often undermine the spirit – “making the numbers” at the expense of long-term health.

Jan Wallander, the famed CEO of Sweden’s Handelsbanken, figured this out as far back as the 1970s. Handelsbanken was a traditional bank that abolished its annual budget process entirely. Executives there realized that detailed annual budgets were at best unnecessary and at worst actively harmful. In place of budgets, they instituted a system of relative targets and continuous control: branches compare performance with one another and adjust dynamically. The result? Handelsbanken has outperformed its peers for decades. It turns out that giving managers autonomy (within a transparent framework) leads to better control – the kind that arises from responsibility, not bureaucracy. This is a classic Beta move in finance: remove a central control mechanism to gain agility and resilience.

The comfort of the old model also comes from clarity of roles and chains of command. In a traditional bank, everyone knows exactly who reports to whom, which committee signs off on what, which products each department handles. It’s tidy on paper. Beta instead introduces fluidity: teams reform around customer needs, roles evolve, authority is distributed. It can feel like chaos to those used to neat org charts. But what’s the real chaos – a networked organization where information flows freely and decisions are made quickly, or a rigid hierarchy where any novel issue triggers a bureaucratic maze? The Alpha structure creates its own chaos, just of a different kind – the chaos of silo conflicts, of delays and missed opportunities, of front-line employees trying to satisfy customers while bound by red tape. Beta organizations embrace a more organic order, guided by shared purpose and real-time feedback rather than top-down directives.

For example, consider how a retail bank responds to a sudden new regulatory change or a fintech competitor’s feature. In an Alpha mode, a task force might be convened, reports written, approvals sought up the ladder. Months pass and the response is sluggish. In a Beta mode, the teams closest to the issue (those dealing with that regulation or competing product) would swarm on the problem, devise a solution, and implement it – informing leadership of progress rather than waiting for permission. Which model do you think handles complexity better? The answer is intuitive: the one that empowers those with the knowledge and stake to act swiftly.

Systemic Change, Not Cosmetic Change

Adopting BetaCodex in a financial institution is not a matter of tweaking one department or rolling out a new software tool – it is a systemic change. BetaCodex advocates often repeat this mantra: Organizations are systems, so they have to be transformed as systems. You cannot change one piece (say, IT or one business unit) and hope the whole will change. This is where many agile programs in banks went wrong – they tried a piecemeal approach. Beta demands a holistic approach.

This doesn’t mean chaos or Big Bang failure. It means when you change, change the core. Start with the fundamental design principles. For a bank, that could mean rethinking how targets and rewards work (do we still give sales targets to each product team, or do we measure success in broader customer terms?), how information flows (is data open to everyone who needs it, or hoarded in management reports?), and even what the org chart looks like (do we keep functional silos, or create cross-functional cells that each serve a segment of the market?). It certainly means re-examining the sacred cows of finance management: budgeting, annual planning, centralized project prioritization, and rigid compliance checks. These can all be reimagined in a Beta way: rolling forecasts and decentralized financial controls instead of budgets, continuous re-prioritization instead of yearly plans, and built-in compliance where teams understand and own risk management day-to-day rather than relying on after-the-fact checks.

Crucially, BetaCodex-style transformation in finance also embraces social dynamics. Traditional transformations often ignore the human element or try to manage it through HR initiatives and change management plans. Beta thinking starts from the premise that “it’s all about human nature”

– people’s intrinsic motivations, their need for autonomy, mastery and purpose. Beta transformations invest in culture from the ground up: they establish communities of practice, peer support networks, and open dialogues to get everyone onboard. Leaders share the vision (often through compelling stories or even immersive workshops) so that thousands of minds begin to change, not just a few at the top. There is almost a manifesto-like spirit to it: a call to every employee to take ownership of making the organization better. Contrast this with typical agile rollouts in banks, which might involve mandating that teams use JIRA and attend daily standups – the passion, the voluntary buy-in, the social movement aspect is missing. Beta change feels more like a grassroots uprising (even if leadership initiates it) than a consulting project.

Another systemic aspect: the role of consultants and experts. Large banks often bring in big consultancies to drive agile change, who come armed with frameworks and maturity models. BetaCodex philosophy warns against outsourcing your transformation. People in the organization have to do this themselves! – consultants can advise, but they should never be in the driver’s seat. In a Beta transformation, the knowledge and energy is built internally. It’s common to see volunteer change agents spring up in different areas of the business, forming a guiding coalition that propels the change. This is a very different dynamic from a contracted agile coaching army that parachutes in. It’s more sustainable and it aligns with finance professionals’ pride and intelligence – they are capable of redesigning their own work if given the chance and the insight.

From Agile Initiatives to Beta Mindset: Finance Examples

To make this less abstract, let’s look at a couple of finance-sector scenarios:

Case 1: The Agile Digital Labs vs. the Beta Bank – Bank Alpha and Bank Beta both want to improve adaptability. Bank Alpha sets up a flashy “Digital Labs” division staffed with agile coaches, developers, and product managers. They run design sprints and build cool apps quickly. It’s all very agile – until those apps need to integrate with the core banking processes. Then the old guard takes over: budgeting for full rollout is slow, compliance reviews stall deployment, and the Labs team gets frustrated and leaves. Bank Beta takes a different route: it re-organizes the entire retail business into multidisciplinary teams. Each team has not just tech people, but also compliance experts, operations, and finance partners embedded. These teams each take full responsibility for a customer segment (say, student loans or small business accounts). There is no separate “Labs” – the whole organization is the lab. When they develop a new feature, the same team can deploy it and adjust operations on the fly, because all functions are in the room. Compliance is there from day one, so no late-stage veto; finance partners are there to adjust funding continuously. This Beta model bank may not have the hyped “innovation hub,” but it systematically outpaces Bank Alpha because it integrated agility into its core, rather than confining it to a sandbox.

Case 2: The Budgeting Battle – A large insurance company (let’s call it Guardian Insurance) attempted an agile transformation in its IT department. They succeeded in cutting development cycles from yearly releases to quarterly, a win for the IT folks. But Guardian still ran on an annual budget process. Every fall, departments fought for next year’s funding in a grand budgeting exercise. The newly “agile” IT team found this frustrating – by the time budgets were approved, market needs had shifted, but money was locked into old priorities. Beta thinking would tackle this head on: remove the annual budget straitjacket. Instead, Guardian could switch to rolling forecasts and decentralized spending authority. Business teams get more discretion to allocate funds as needs emerge, within agreed guardrails. In practice, this might mean a team working on, say, a mobile insurance app can decide mid-year to ramp up spending if user demand spikes, without begging a steering committee for re-approval. Finance’s role shifts to ensuring transparency (everyone can see how teams are performing and spending) and guiding by exception rather than micromanaging every dollar. Many finance leaders gasp at the idea of no fixed budget, but as Bjarte Bogsnes of the Beyond Budgeting Round Table famously said, hitting the budget number should not be the goal – serving the business and customers should. Companies like Handelsbanken and Equinor (in energy) have demonstrated that relative targets and principled constraints outperform rigid budgets. In Guardian’s case, embracing Beta budgeting would likely free up innovation and eliminate the destructive annual knife-fights for funding that pit departments against each other.

Both cases show a pattern: Agile methods on their own can yield some improvements, but they hit a glass ceiling imposed by the old model. Beta removes the ceiling by redesigning the model itself.

Embracing Complexity and Adaptation

Finance is a complex, highly regulated domain. It might seem that complexity and strict regulation argue against Beta-style decentralization – surely you need strong central control to manage risk and comply with laws? Surprisingly, the opposite is true: in a truly complex environment, centralization often fails. It’s too slow and distant to sense emerging issues. A Beta organization, with decisions pushed to knowledgeable front-line teams, can actually handle complexity more robustly. Think of it like an ant colony versus a single giant elephant. The colony (a network of small actors) can adapt quickly to disturbances, while the elephant (a huge centralized entity) lumbers and is easier to topple. Many small decisions, made close to reality, will beat a few big decisions made far from the action. Modern risk management thinking even echoes this: empower the “three lines of defense” (operational teams, risk/compliance functions, audit) to work together dynamically rather than funnel everything to a top committee.

Niels Pflaeging, author of Organize for Complexity, argues that we must “abolish command-and-control management hubris and replace it with principles that fit complexity”. Nowhere is this more pertinent than in finance. Markets, technologies, and customer expectations shift rapidly, and unpredictable events (from economic shocks to pandemics) can upend plans overnight. A bank run can start on social media and go global in hours. The only way an organization can cope is by being highly adaptive at every level. Beta organizations are essentially complexity-ready – they are designed to evolve continuously, without waiting for orders from the top.

This adaptability also has a social dimension. In Beta, employees are not cogs executing tasks; they are sensors and responders in a network. A customer service rep at a bank branch who notices a new scam targeting elderly clients can immediately flag it and propose a solution, looping in fraud experts and IT to implement protective measures within days. In an Alpha bank, that same insight might die in a report filed weeks later, while the scam spreads. Empowering people is not just a “nice to have” – it’s a company’s immune system in a complex world.

A Manifesto for Beta Finance

How can a finance organization start its journey from Agile Theater to true Beta agility? It begins with a shift in mindset – almost a manifesto for how you will operate. In the spirit of directness, here’s what a Beta manifesto for finance might sound like:

Purpose Over Politics: Focus on customer value, not internal power plays. We value meeting real customer needs over hitting arbitrary internal targets.
Networks Over Hierarchies: Decentralize decisions. We trust small, cross-functional teams at the edges over centralized committees at the center.
Adaptation Over Prediction: Embrace continuous change. We favor rolling forecasts and fast adjustments over annual plans that pretend to predict the unpredictable.
Transparency Over Control: Make information open. We prefer shared data and peer feedback over secret reports and top-down control.
Trust Over Rules: Assume people’s best intentions. We rely on intrinsic motivation and clear principles over complex incentive schemes and endless rules.

This isn’t just rhetoric. It’s a deliberate rejection of the old assumptions that have proven so limiting. It’s also an invitation – for everyone in the organization to think and act differently. Such a manifesto could guide everyday behavior: when a decision needs to be made, ask “who is closest to the issue?” and empower them, rather than automatically escalating. When planning a project, ask “how can we structure this so we can change course next month if needed?” instead of locking in a year-long roadmap. It’s a mindset shift at all levels.

The Shift: From Tweaking to Transforming

The finance sector doesn’t lack smart, capable professionals – it is full of them. The tragedy of many agile transformations was that these people were willing to change, but were asked to do so in superficial ways. They were told to follow a new process, yet the system around them stayed the same, sending a mixed message. By contrast, a BetaCodex transformation asks leaders to change the system, not just tell employees to be “more agile.” It demands courage at the top to dismantle cherished structures – to possibly eliminate a whole layer of management, to stop giving detailed annual profit guidance, to turn the org chart on its side. Not every organization will be bold enough. But those that are – they reap a competitive edge that others will struggle to replicate.

Finance is often called conservative, bound by tradition. But it’s also a sector that understands risk deeply. The paradox is that clinging to the Alpha model is now the riskiest choice. It means betting that the future will behave like the past and that a fortress mentality will work in an era of ecosystems and rapid change. The safer bet, ironically, is to embrace Beta – to build a bank or insurance firm that can roll with the punches, adapt on the fly, and innovate at the edges because it has freed its people to do so.

In conclusion, agile transformation vs BetaCodex is not a contest of methodologies – it’s a choice of worldview. Agile alone, in an old context, is a half-measure, often a performative one. BetaCodex, with its complexity-proof principles and human-centric design, represents a more profound shift – one that fulfills the promise agile made, by addressing the systemic roots that agile itself left untouched. For the finance industry, the message is clear: to truly get “life back into work” and build a high-performance organization, you must be willing to question everything, from budgets to boss roles, and rebuild around trust, transparency, and adaptability.

Agility in finance will not come from doing Agile harder – it will come from going Beta. The institutions that realize this will not only survive the complex storms ahead, but thrive in them. The ones that don’t will keep running in place, wondering why the agility they pursue always slips out of reach. The choice is stark, the potential reward immense. It’s time to move beyond the Agile mirage and embrace the Beta reality.