In October 2016, I spoke to Rob Millar, managing director of Comotion Consulting, about his work setting up an “innovation engine” at a major UK retail bank to help drive transformation and change at the bank.
What is an innovation engine, and how has this helped the bank effect change?
Most large organisations are often poor at innovation, take a long time to bring new ideas to market, and fail to hit return on investment (ROI) targets once launched. The underlying reasons are common: a lack of understanding about how to innovate, an absence of authority to make things happen, no dedicated time given to make the project successful, poor internal communications, conflicting measures of success, and lots of cultural barriers.
Innovation engines are designed to help businesses improve their ability to successfully launch new ideas by building an approach and ethos that eliminates these underlying reasons.
At the bank in question, we were given the challenge to fundamentally alter the approach and increase the speed of delivering new ideas to market for its global transaction banking division. The result was an innovation engine tailored to facilitate change.
What were the characteristics of the innovation engine?
It is a holistic approach to delivering new ideas at speed. It starts by analysing customer needs and identifying areas where there are opportunities to make improvements based on what our customers are saying. This may be split by industry type, size of organisation, or stage in the customer journey. We then work with customers and internal staff to build a long list of ideas (often over a hundred or so per session) to resolve these needs.
At this point, we run the triage process: a two-day process where we reduce the ideas down to a shortlist of four final concepts that are developed and then presented to senior leadership in an Angels’ Den event (rather less aggressive than a Dragons’ Den). Two of the four ideas are then selected to go forward to the six-week programme, where we take them from an idea on a piece of paper to a pilot with a live client that will generate revenues. A key part of this event is that each of the two ideas are championed by one of the senior leaders who voted for them in the Angels’ Den.
The key ingredients that make the innovation engine unique are the core principles on which it has been based, namely:
- One, client-led design: The client is involved in all stages of the process in order to understand their pain points, clarify their needs, work with them to deliver solutions, and pilot those solutions with them.
- Two, empowered, cross-functional teams: Many large organisations we deal with have legacy issues where different functions would often find themselves arguing because they were driven by different goals. To fix this, you need to build cross-functional teams that are given the task of changing cultural behaviours by focusing primarily on fixing the specific client need in a profitable way. To make this successful, we do a number of things:
> Create teams from across the business and give them adequate time off their day jobs during a concentrated six-week period.
> Use this time off to build a cross-functional group where their goal was to find a profitable solution to a specific client need.
> Give them the authority to make decisions on behalf of their bosses, and build a culture of asking for forgiveness.
- Three, active sponsorship from the top: This is absolutely essential. The executives that sponsored the two solutions that went into the programme had an active role in the project, including an open door policy where participants could come to them to fix specific issues. This approach was very different to other projects we’ve worked on with other clients, where the leader would sponsor in name but would only expect to receive a report at the end, as opposed to being an active member.
- Four, learn fast, fail fast: Many companies we work with have a culture of “once something starts, it’s almost impossible to stop”, where client needs, ROI and any sense of reality are lost early on and never recovered. We spent a lot of time building agreement that stopping a project in a few weeks was actually a success and should be celebrated, not only due to the money saved but also due to opportunity gains of being able to do other things.
- Five, time-boxing: We forced a six-week time-box for the process. We put a timer on the wall, counting down from six weeks to zero, to force a deadline, where we would do whatever we could within that time. This forced the team to be agile in its decision making, change direction quickly, and innovate at pace.
- Six, building minimum viable products: This was linked to agile as a way of working, creating a rapid test-and-learn approach to proposition development. Our whole focus was to understand clients’ needs, live-test potential solutions, learn from them and improve. We ran sprints, had daily stand-ups to review our approach, and constantly undertook retrospectives to learn from what we had done. It was great to see the teams saying to their clients “we think we can do this, what do you think?” and then tweaking their solutions in response to the feedback and trying again a second time.
- Seven, having fun: The business very quickly acknowledged that having fun was a key requirement of the programme. By empowering the participants, giving them permission to take time off from their day jobs, and forcing them into a different way of working, we not only received extremely positive feedback about their participation but also generated a desire from other staff to get involved.
How did your approach work within the bank?
Our first attempt identified some hurdles about trying new ways of working. Although the process was painful for everyone involved, it was essential because it allowed us to build a rapport with the leadership about where we should focus our efforts. The senior team was brilliant, because they took the suggestions completely onboard and actively worked with us to create the programme.
Their participation allowed us to launch five new propositions to market within the first eight months of 2016, fast-fail several ideas that we quickly identified as non-viable, and hit multimillion pound in-year revenue targets that we had set as stretch goals. Moreover, those that were involved in the projects reported a 30% increase in speed of deployment, 40% growth in team productivity, and a 45% improvement in team engagement. Most importantly, however, once these results started to happen, more and more staff from across the bank started asking to participate.
Today, the bank is now fully self-sufficient having built an internal team to run and evolve the process, which is growing in stature not only within the global transaction bank but across the whole of the commercial bank. The team now has a combination of streams covering needs analysis, idea generation, piloting and industrialisation. Most importantly, new pilots continue to emerge each quarter that have reinforced the belief that the bank will become a leading innovator in the commercial banking space. The cultural impact of showing that things could change at speed and get results is testament to the hard work and persistence of senior leadership and staff in the bank.
As a footnote, due to the success of the programme, the bank has recently undertaken the unprecedented move of using the same approach to create ‘Turbo Fridays’ – a much larger programme involving over a hundred staff within the bank to work on strategic initiatives in teams every Friday over six weekly sprints, the results of which have been tremendous.
READ NEXT: What is a true innovation leader?
– This article is reproduced with kind permission from Verdict Financial. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main image: Sign N Symbol Production, Shutterstock.com