Banking Fintech

Unrealistic expectations about innovation – there’s no silver bullet

Unrealistic expectations about innovation – there's no silver bullet. Photo: GrandeDuc, Shutterstock.com
Written by JP Nicols

Quick wins may show success and build confidence, but they were small improvements. JP Nicols says consistent application of the process is what drives results, and there’s no silver bullet to success.

Managers have this bad habit of looking for a silver bullet – that magical holy grail that will make all of their problems go away quickly, and preferably painlessly. Those expensive consultants. That fancy new CRM system. This flashy acquisition. That confusing and demoralising internal reorganisation. Not the last one, this one. Many have this same unrealistic expectation about innovation.

We launched this innovation team last quarter, why haven’t we seen results yet?

Not long ago, we met with one of our clients to discuss the test and learn approach, and to encourage that they run many small experiments to maximise learning and increase the probability and speed of success. We used an analogy that it was like planting a lot of seeds at once, since not all of them would bloom into something big and beautiful. The client, the COO of a midsize US financial institution, replied that he understood, but warned that we had better make damn sure that the very first experiment was successful.

Innovation is like weight loss

In some ways, innovation is like weight loss. The process is simple: move more and eat less. So why are so many people overweight? Because achieving lasting results takes consistent application of the process over time. We are now seven weeks into 2017, and most well-intentioned New Year resolutions have been overpowered by old habits. The gym is noticeably less crowded, and Frappuccino sales are booming again. Those first few pounds shed have returned, and the alarm clocks have been rolled back to less ambitious hours.

Likewise, with the innovation process. Managers get excited to chart a new course and boost their flagging performance by implementing new ideas. The first few come out pretty easily because they were the proverbial low-hanging fruit; quick wins to show success and build confidence. But they probably didn’t show up in the financial results because they were small improvements. More than likely, they really didn’t create any competitive advantage at all – they probably just helped close your lagging gap a little bit.

Throwing in the towel

This is the time when the shortsighted silver bullet seekers want to pull the plug.

This wasn’t the right programme … we got bad advice … involved the wrong people … tackled the wrong opportunities … the timing was bad.

Any or all of that is possible, of course, but the more likely explanation is that you hit your first plateau, and you need to power through it. Consistent application of the process is what drives results.

Your competitors that are sticking to their programme are starting to create their own competitive advantages. Partly through the accumulation of a lot of small wins, and partly by getting better at successive experiments because they’re learning more quickly what works and what doesn’t. Tighter iteration loops.

As you go back to the drawing board and try something else, your competitors are really starting to benefit because some of the bigger bets that took longer to figure out are starting to pay off. Now they’re in a position to make even bigger improvements, and the gap between them and you is about to get a lot bigger. You’re really going to need a silver bullet to catch up now.

READ NEXT: How apathy can affect financial services

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo: GrandeDuc, Shutterstock.com

About the author

JP Nicols

JP Nicols has been internationally recognized as a leading voice for innovation, strategy and leadership, and his work has been featured in some of the industry’s top publications and conferences.A former senior bank executive, he is Managing Director of the FinTech Forge, and founder of the Bank Innovators Council which is now a part of Next Money, a global community committed to reinventing financial services through design, innovation and entrepreneurship.

Leave a Comment