Innovation career paths

Early in my career, I spent quite a bit of time and money working with a professional career coach. The experience was an exceptionally useful one, and I had an ex-managing director of a huge shipping and transport company assigned to me. As a mentor, his constructive input had a lasting effect on me. And the one bit of advice that stood out more than anything else was this:

"James, if you want to get to the top of an organisation you must be connected to the money. The ones who bring in the revenue are almost always the ones that achieve the most senior roles in organisations"

Now this is a very interesting insight, but it wasn't something I'd thought about until it was pointed out to me. But consider your own organisation! The CEO will invariably be the one who has spent most of their time in roles which directly impact the top line. Frankly, you want someone who knows how to get the money in the door, because pretty much anyone can manage costs.

But this leads to an interesting question. In the future, who will be the ones with the experience bringing in the money? Will it be the traditionalists, who have spent decades managing large institutions in a steady fashion?

Or, will it be the innovators, who have lots of experience in doing things that drive new growth?

I am of the view that we face an interesting inflection point. There are innovative disruptions that touch the very core of the financial services business either with us now or on the horizon. It is possible that traditional banking practice is not an effective counter to these, and one must therefore look to doing new things to preserve one's franchise in the market.

It will be these new things which drive future value for institutions.

And that brings me back to the advice I got from my coach. When the innovators are driving a business process to create new things, and when those new things are the long term source of top line growth for an institution, who do you think will be in the top jobs in banks in the next decade?

4 Responses to“Innovation career paths”

  1. March 20, 2009 at 11:35 am #

    Hi James,
    I don’t know if you came across the post asking “Do influential people develop more conventional opinions?” – http://tinyurl.com/ctttcr – but if the point there proves true, today’s winning innovators may become tomorrow’s dull CEOs, which all leads me to reassert how brilliant Orsen Welles was in his “Citizen Kane”.

  2. March 20, 2009 at 11:39 am #

    James, Is innovation line a profit center or cost center ? Could innovation itself generate profits or it is a support organization ?

  3. March 21, 2009 at 2:47 am #

    @James – I would amplify to the quote ” … be connected to the money”. That person is the one accountable for a budget which is directly connected to the companys financial statements.
    Now in most banks I have seen, that person is the product manager – head of deposits, head of loans, mortgages etc. The fact they are separate heads is part of the problem in those banks. Innovation for mortgages for example de facto restricts one to innovation for mortgages. The loans or deposit person is not interested in hearing from you.
    Meanwhile the customer sees products for what they are – minor inconveniences that form part of a larger relationship with the bank.
    This becomes an organisational issue, and accountability for revenue within the organisation.

  4. March 21, 2009 at 10:10 am #

    Hi James
    It was Peter Drucker who said that “…the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs”. If Drucker is right, it is marketing that creates today’s money, innovation that creates tomorrow’s.
    Both marketing and innovation are having ‘difficulties’ in the current climate; marketing is rapidly becoming less effective at persuading customers to buy and invention (which is what much innovation actually is) has never had a good record of success in the market.
    Part of the problem for marketing and innovation is that they work with too much of the wrong information or not enough of the right information. Marketing is blind-sided by too much historical customer transaction data and invention often ignores customer data completely. To succeed, marketing and innovation need a balanced mixture of information about customers. This includes data about historical transactions, about the context that surrounds purchasing, about those who influence purchasing and of course, about core customer needs in terms of the jobs they are trying to do and the outcomes they desire. Marketing’s job is to provide customers with products, services and experiences that customers can use to deliver these jobs successfully. Innovation’s is to create new, better or cheaper products to do the jobs.
    Maybe the recession will force companies to make their marketing more effective so that they can survive the recession and their innovation more productive so that they can thrive once the recession is over. Both are going to need a balanced scorecard of customer data.
    Food for thought.
    Graham Hill
    Customer-driven Innovator
    Further Reading:
    Graham Hill, It’s Time for a Balanced Scorecard of Customer Data
    http://tinyurl.com/bm4roz

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