More signs of interest

Another call yesterday from an institution wanting to know about starting an innovation programme. They are coming more frequently. It is a sign, I think, that bankers generally are recognising there might be a light at the end of this particular tunnel, and they'd better have something compelling in the pipeline if they want to take advantage.

The most interesting thing I get from these kinds of calls is visibility of how few bankers really understand the power of the innovation assets they already have under their control.

For example, most institutions have some kind of staff suggestion box. Most, also, don't do anything with it. They let their people hand over their ideas, which then sit around gathering dust.

Since the staff suggestion scheme is a foundational infrastructure for building out an innovation programme, it is always surprising to me why institutions don't take the next step and couple some of these ideas with a little bit of structured execution. Or, at the very least, do some analysis and scoring to find the gems in what is probably a hefty database of potential uniqueness….

The other thing I've worked out, speaking with all these banks, is that so very few institutions actually know how to do the execution bit. They can collect ideas ok, but the moment they have to do something with them it seems to get very, very hard.

It isn't hard, by the way. You just have to know what to do.

That is a consulting opportunity of very significant proportions. As I've observed here before, however, no big firm is taking the bull by the horns and dealing with this pent up demand. I don't understand why, but do wonder. If I handed over referrals from every bank that calls me, I've little doubt that someone could make a lot of money.

But also consider this fact, especially if you are a partner at a consulting firm: if you are helping an institution with its idea management and progression, you also have visibility into every single future project of any significance. And the ability to shape those projects. It's a win for the firm, who will likely get quite a significant percentage of that work. But its also a win for an institution, who, as I've pointed out, have this huge untapped asset of all those staff ideas which noone is doing anything with.

It will be interesting to see, in the coming months of possible recovery, to see which firm jumps first on the innovation opportunity in banks. And then, after that, watch the rest rush after the crumbs that are left.

8 Responses to“More signs of interest”

  1. March 24, 2009 at 1:12 pm #

    Pass them my way, James!
    The email address is…

  2. March 24, 2009 at 5:00 pm #

    The usual argument with letting the ideas in the staff suggestion box rot is lack of resource. I think if these ideas were made public and ‘voteable on’ like Dell Ideastorm/Mystarbucksidea then the sorting, scoring and refining could be done by the very people who suggest ideas in the first place…just a thought.

  3. March 24, 2009 at 5:24 pm #

    Aden,
    That is indeed what we have done internally here at the bank with our Innovation Market:
    http://bankervision.typepad.com/bankervision/2008/12/introducing-inn.html
    It is not publicly available of course, but I think an excellent start.

  4. March 24, 2009 at 6:02 pm #

    Hi James
    My experience is that suggestion boxes are a symptom of traditional innovation mentality. You have a great idea, hand it over to the innovation committee and they will let you know if you have won one of the annual innovation processes. It just doesn’t work, at least, not as well as it could.
    At the start of my career I worked for British Airways. I was fortunate to be able to take part in the turnaround that Lord King and Colin Marshall drove through to make BA fit for privatisation. BA went through what is still one of the best–run turnarounds in corporate history. It was a textbook change programme, which I have referred to often since. The last stage of the programme was introducing a suggestion scheme – Brainwaves – to capture staff ideas. Initially the scheme captured some good ideas and staff earned valuable cash prizes, but it quickly ran out of steam. One of the biggest problems was that staff had no stake in seeing their ideas through to implementation. That was someone else’s responsibility.
    Contrast this with Toyota, where I was Head of CRM at Toyota Financial Services for a while at the back-end of a long consulting assignment. At Toyota, capturing improvement opportunities through Toyota’s famous Kaizen process was everyone’s responsibility. And staff did make improvements of different sizes to their activities almost every week. For example, my team made over 50 improvements to some operational marketing campaigns in a single year. Over the last 40 years, Toyota has made over 20 million improvements to its business operations. Many time more than all its US competitors combined. And it shows. The big difference compared to British Airways was that everyone was responsible for implementing their own suggestions, no matter how large or small. Everyone was responsible for innovation.
    After customers, staff are perhaps the next best source of innovations. But they have to have some skin in the innovation game if it is to work. So ditch the suggestion box and get staff trained and using Kaizen in their daily business. If it worked for humble Toyota, it will work for you too.
    Graham Hill
    Customer-driven Innovator

  5. March 25, 2009 at 10:25 am #

    Hi James
    Interesting thoughts about the suggestion scheme and I think you’ll find many companies run them simply to get employees involved – to feel empowered – rather than to genuinely take ideas forward… something I discussed in a previous blog http://loyaltyguy.blogspot.com/2009/03/heres-idea-get-involved.html

  6. Chris Brearley
    March 25, 2009 at 10:50 am #

    Hi James, and Graham.
    I have worked in a large UK bank for some time now(11 years) in a number or roles from customer facing through to my current role in an Innovation and Insights capacity.
    I have seen many of the schemes mentioned here come and go with varying degree’s of success and their failings have mainly been down to a lack or resource and focus, and buy in from the top level management. Why?
    We’ve had Kaizen and that was extremely successful for a number of years. Especially with local(department level) initiatives. However as it upscaled and idea’s were stored centrally, the process began to falter. As mentioned already I believe that this was from a lack of buy at the highest levels, and to a certain degree maybe due to a lack of understanding of how valuable some of these idea’s could be. If there is no resource to review and progress the idea’s how can the business leaders get sight of them!
    I completely agree that after the customer, some of the best idea’s come from our colleagues around the business. The guys who deal with our customers on a daily basis are best placed to tell us what works and what doesnt. To make suggestions for new ideas and as Graham quite rightly comments, see those idea’s through to completion, helping keep them on track and inline with the original thought process behind submitting the idea in the first place. Often an idea is submitted and then thats the last the originator see’s of it! It can get watered down, or changed completely as the idea becomes a project and through the stages to implementation.
    We are nearing the end of a full review of our idea’s process and are looking to implement a new scheme later this year. It follows the ideas mentioned in the previous posts, with an online tool to log, review, discuss, rate and ultimately communicate successes, and failures. It also takes into account the “own your own idea” principle and we aim to have the originator involved throughout!
    Its great to see example of that working, as mentioned by Graham, and Ill keep you posted on our progress.
    Chris Brearley
    Innovator – also customer driven 😉

  7. March 26, 2009 at 4:13 pm #

    “If I handed over referrals from every bank that calls me, I’ve little doubt that someone could make a lot of money.”
    Dare I say that the reason they are calling is to get a non-consultant’s view. In fact, I think there are some pretty strong resources for innovation support available to organizations. But some firms are not prepared to actually resource innovation (i.e. staff and budget), and many projects fall apart at the change management stage.
    Most innovation in service businesses involves significant operational changes, involving staff, role design, and technology impacts. I’ve been involved in a few of these projects, both as a consultant leading the external team, and as an internal manager/executive. It’s a big hill to climb for an organization.
    So some of your callers are looking for a quick fix (“gee, I’ve heard about this idea market, maybe that’s the answer”). Others are already good at what they are doing, and are looking to be even better by staying in touch with exciting developments.
    As a consultant, one thing I have learned is that clients have many challenges, but only some that they are prepared to pay to solve. Innovation only gets on that list when one of two situations is occurring:
    a) the status quo is no longer acceptable because there isn’t enough duct-tape in the world to keep it together or
    b) the organization’s ambitions for growth cannot be achieved using status-quo approaches.
    Right now, my sense is that there is a need for innovation, and perhaps lots of pent-up demand, but decision-making in large organizations has slowed to a crawl.
    Certainly, there is no shortage of good resources, at least in my neck of the woods.

  8. March 26, 2009 at 8:45 pm #

    Hi Susan
    I think you are right about service innovation when you say that it requires significant operational changes. In fact the same applies to product and experience innovation too. The challenge is in identifying all the organisational bits and bobs (technical term!) that need changing together, what order to make the changes in and how to make them. That might include changes in processes, technologies, data-flows, work routines, roles & responsibilities, performance measures, and, and, and.
    My experience is that many executives responsible for making innovations happen do not always understand all these complementary relationships and if they do, are rarely authorised to change all of them. As you quite rightly observe, this means that even what appear almost trivial innovations, e.g. allowing customers to customise their own credit card conditions, require a plethora of poorly understood changes to the workings of your typical credit card company. Including to critical, high-volume, business operations. Companies like Toyota have developed structured tools e.g. Hoshin Karnri Planning using A3s, to handle these departmental collaboration problems, but the tools are not yet widely known outside Toyota and its alumni.
    I strongly agree with you that there is a need for innovation. Indeed, there is solid evidence that companies who invest in innovation during a recession outperform their competitors who didn’t, once the recession is over. But I am not sure that I agree that there are lots of ‘great’ innovation resources out there for companies to go to get help. Consulting or otherwise. James is clearly an exception.
    Graham Hill
    Customer-driven Innovator

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