As a student of innovation, I was grateful to attend Bank Innovation Build in Atlanta a short while ago. The event is one of two annual events conducted by Bank Innovation, Royal Media’s financial services blog. There are plenty of events that merchandize innovative initiatives in financial services, but few that discuss how to innovate. This was one of them.
Here are three take-aways from the conference:
Best Practices Aren’t Always the Best Practice
One of the speakers made mention that in her organization, they purposefully shun best practices because best practices thinking is an innovation killer. Fascinating! I think she’s right. I say this as someone who just authored a paper on the best practices in retail banking customer acquisition.
Discovering best practices has clear value. Traditionally, their value is realized if they are emulated. Why not seek to emulate those organizations who appear to be industry leading? It’s a great idea – if it is your objective to emulate other organizations. That’s not innovation, it’s emulation. The other way to extract value from best practices isn’t to merely emulate them, but to let them inform your broader efforts to optimize whatever part of value delivery you are trying to optimize. Shunning and ignoring are two different things.
The Hardest Part of Innovation Has Little to do With Technology
It struck me multiple times during the two-day conference that technology barriers to innovation are quickly vanishing. Innovation models that rely on increasing use of partnerships is getting easier via APIs, for example. Technology is commoditizing. Capabilities are increasingly available as a service. But with all this, innovation remains difficult. Why? Because it comes down to personal relationships.
This takes an unusual kind of leader it seems to me. Innovation is an attractive idea, but we heard from several innovation leader speakers that innovating is both difficult and decidedly not glamorous. It requires failing often, listening intently, developing empathy, skilfully negotiating and knowing when to stop working on what seems to be a really good idea after being emotionally invested in the project. No wonder why successful innovators are uncommon.
Good Governance Trumps Great Ideas
Good ideas are like good intentions. Neither amount to anything without the hard work of bringing them about. The hardest part of innovation isn’t coming up with good ideas, it’s effectively operationalizing them - governance, balancing freedom to create and the associated risk. Doing both well takes a kind of schizophrenic culture. On one hand. There is a need for devotion to vision and principles that define your brand and rigid adherence to regulatory compliance alongside a willingness to shun convention, while embracing an almost reckless willingness to do things differently.
I'll be going next year.