Making Innovation Happen - Practioners Speak at Celent Rountable

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4 October 2013
Michael Fitzgerald
Celent facilitated a roundtable discussion between innovation practitioners this past week in San Francisco. The three hour meeting was so dynamic and the time went by so fast that the group worked straight through their planned mid-afternoon break! Numerous threads were explored around the practical implementation of innovation in financial services companies. The agenda was organized around the themes of scanning the external environment for opportunities and threats, implementing innovation processes and technology, and successfully engaging the organization around innovation. Fifteen companies participated across the verticals of banking, capital markets and insurance. A few were just beginning their innovation journey but most were experienced practitioners with three to seven years of experience. I won’t try and summarize the entire session in this blog -- you really had to be there to get the full depth of experiences shared around the table. I will highlight several of the key adjustments to "business as usual" that the group agreed were necessary for success.
  • Traditional roadmaps that detail process and technology future states have not worked. As one participant said they “don't survive the first contact with reality”. Successful innovations have much shorter cycle times than roadmaps and must be executed much more rapidly. Incubation and prototyping are critical. One company has committed to prototyping new innovations every four weeks.
  • In some organizations, the standard annual planning process has been adjusted to support innovation. One participant reported that an innovation “lens” is now part of their business planning routine and that front line business leaders are contacting the innovation group to assist with budget planning to ensure that innovation is considered along side their day-to-day operational investments. Another person admitted that they were still striving to find the right balance between investments in routine improvement, incremental innovation and disruptive innovation.
  • Ideation approaches varied across companies. My sense was that ideation techniques evolve as a company moves through its innovation journey. Many reported continuing success with internal crowdsourcing of innovation opportunities. Others discussed that they have moved to a more focused approach using tailored processes and specialized skill sets.
  • External crowdsourcing of innovative ideas was also explored at length. One participant cited their success in identifying innovations by engaging employees in their technology providers’ organization. They have found that front line developers understand their business and also are less encumbered by traditional approaches.
  • Fit-for-purpose innovation software packages provide a “force multiplication tool” that enables one company to engage all of its employees in innovation. Surprising results were discovered when they used the tool to develop network maps of information flows within their organization. Unexpected sources and “hubs” of innovation were found in surprising places.
A recurring theme was that continuous innovation is not an objective in and of itself. Much like other business improvements in the past such as total quality management, e-learning, and Six Sigma, successful innovation is achieved when it is integrated into on-going business processes. One participant stated that a goal of Chief Innovation Officers should be to “work themselves out of their jobs!” For disruptive innovation, the group discussed that there are specific processes, incentives and organizational structures that are required for changes that, by their very definition, threaten the core business. These efforts must be protected, nurtured and implemented differently than incremental innovation. The group shared some of the approaches they use to meeting this challenge. The meeting ended with frank observations about the cultural changes necessary to bring about sustained innovation. Financial services firms face special challenges related to its risk adverse nature and traditional incentive and organization structures. Several interventions were shared related to successful communication and leadership interventions. It was recognized that the companies making progress with innovation in financial services recognize that the cultural changes required are long-term in nature and that success will come through a continuous commitment to reduce fear and increase engagement between employees, partners, and customers. As one person put it "this is a five to seven year transition we are in and we are learning and adjusting as we go".

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