By David Peterson
By now, the message has been lost on no one: traditional financial services are at an inflection point. They must innovate to survive. At the enterprise level, however, innovation is far easier said than done.
Faced with change, some employees may simply wait out a new initiative to see whether it sticks. They may ask themselves, “Why should I alter my course and work hard to make this a reality when in a few months, it will be forgotten?” Perhaps they’ve seen it all before: senior management taking up an initiative without the realistic processes or enterprise-wide buy-in needed for long-term success—ultimately allowing the idea to drift off into obscurity. Organizations that are not fully committed to innovation will never see any systemic change.
Practicing innovation leadership.
Working with individual employees to instill a more innovative approach to their jobs can be relatively straightforward. Let’s say one of your direct reports comes to you with a problem. You may have several ideas on how to help your direct report address the issue. However, instead of simply handing down potential solutions to your staff, first ask them what ideas they’ve brainstormed. This might throw them off as they realize they won’t be allowed to be passive. But by shifting expectations and requiring input for problem solving, you prod your employees to think innovatively prior to seeking assistance. Provide guidance by referring them to individuals within the organization with insight into potential solutions. Suggest they meet with two or three others and copy you on any communication as they brief others on the problem. Take the time to support your staff in promptly planning these mini-brainstorming meetings. When managers set the standard for working toward a common goal of innovative solutions—and hold employees accountable to it—employees will follow suit.
But how can leaders make innovation the new normal across an entire organization?
Consider this formula.
- Conduct an innovation workshop.
Bring everyone in the organization together to encourage creative thinking. The workshop can be facilitated by a staff member, a member of the management team or an outside facilitator. The workshop should be focused on insight into innovative thinking. While some presentation material could be classroom-style, used to illustrate the desired behaviors, the workshop activities should be weighted toward hands-on and interactive exercises. There are literally hundreds of examples available online for exercises that spur innovative thinking. A facilitator should have a complete program ready to be tailored to any specific company. The workshop might be a two-to-three hour program with multiple sessions if it is not feasible for all employees to attend at the same time. It’s critical that everyone in the bank participate, including the CEO or other executives, with other employees as workshop attendees. The ultimate goal is to inspire everyone to find small innovations: process improvements, elimination of excess and unneeded steps, and even modification of existing services that provide for new revenue opportunities.
- Create an innovation challenge.
An innovation challenge is an enterprise-wide contest that helps build momentum for innovative thinking across the company. This works especially well if it is announced as a part of the innovation workshop. The goal is to envision and present ideas for new and better ways of doing things. Each employee is welcome to participate, within certain parameters.
First, they must form a cross-functional team—in other words, multiple employees from different areas of the bank should be working together to develop an idea. If someone from customer service has an idea, for example, he or she would need to get at least two other employees to form a team, such as someone from IT and someone from accounting. This approach to team formation emphasizes the need to obtain additional input into ideas. That’s because any given idea is likely to come from one individual’s area of expertise. But when we involve others who are not steeped in our processes, they might see things differently and ask challenging questions. At the very least, forming cross-functional teams forces people to work together—and hopefully convinces additional employees to buy into working on their idea.
Provide each team with a template of a presentation and a simple spreadsheet to estimate income and expense associated with the idea. Set a timeframe with a deadline for when presentations will be made. Bring in some outside judges—perhaps someone from a local college or university or the head of IT for the city or county—someone who has demonstrated success with innovative thinking. While you should reward everyone who participates, those whose ideas are deemed good enough for implementation should receive some additional remuneration. Acknowledge and congratulate those ideas moving forward and provide frequent updates on their progress.
- Continue an ongoing innovation focus.
Once you’ve completed an innovation workshop and challenge, you must consistently reinforce the desire for continuous innovation throughout the enterprise. You could issue periodic challenges, for example, once per quarter or semi-annually. You could highlight ongoing innovations at a monthly status meeting. You could instigate brown-bag lunches oriented toward creating an environment where employees can bring problems to a group setting and brainstorm ideas for solutions.
Regardless of the form, the key is that the employees realize this new focus on innovation is not a fad that will pass but the new normal. By tying innovation outcomes to periodic employee reviews, it will also cement the idea that each employee should be looking for innovation regardless of their position in the organization.
- Eliminate unnecessary barriers to innovation success.
Beware of unintended consequences. I once created an innovation challenge for a fintech company and was curious as to why collaborative group participation quickly dropped off. In seeking out participants who originally showed great enthusiasm but subsequently abandoned the innovation challenge activities, I learned that the accounting department was tracking their hours for purposes of development amortization. The time spent working on the innovation challenge was being categorized in a way that was penalizing employees working on a cross-functional challenge team. I brought this situation to the attention of the CFO and the CEO, but had no success in changing the policy. Very quickly, the level of excitement for the workshop and potential for the challenge dissipated. We should never dis-incent employees from working on creativity and innovation.
Decide that enterprise-wide innovation is crucial for the future of your organization, and then proceed with the necessary steps to ignite participation. Equally important, fan the flames of innovation to ensure that it takes hold. Watch for anything that might tamp it out. Treat the innovative spirit like a fire you’ve created on a deserted island—one that must remain lit in order for you to survive. This will make enterprise-wide innovation a central strategic focus each and every day. The result will be a heightened level of employee satisfaction, increased loyalty from customers and partners, and sustained innovation driven growth.
David L. Peterson is president of U.S. Dataworks, Inc. He creates and executes innovation workshops and innovation challenges for financial institutions and fintech companies. Email: email@example.com. Phone: (229) 630-1000.