APQC recently spoke with Mick Simonelli, innovation consultant and former senior executive who built USAA's Innovation Program, and Mike Fitzgerald, innovation leader and senior analyst with Celent, about innovation trends for banks, insurers, and securities firms. They also outlined how these organizations can improve innovation capability.
Mick Simonelli and Mike Fitzgerald gave an in-depth presentation on this topic during a recent APQC webinar.
How are financial services firms looking at innovation in 2015?
Financial services firms recognize that changing consumer expectations and advances in technology are resulting in unprecedented pressure for firms to innovate. There are positive, “offensive” reasons to innovate the traditional approach, such as gaining more satisfied customers and increasing revenue. There are also “defensive” reasons, such as competing effectively against disruptive new entrants.
Everyone talks about the importance of innovation in relation to business strategy, but what is the best way to connect the two to each other?
Connecting innovations to business strategies is relatively straightforward. Keeping them connected during execution is much more difficult. One issue that often arises is when the “run the business” projects required to execute the business strategy overcome, or crowd out, investment and attention for the innovations. This can be overcome by managing these different efforts together in a portfolio approach.
Why is it sometimes seen as difficult to identify and promote innovation in financial services?
The strength of financial services is that the conservative nature of the industry provides protection for customers’ assets. According to surveys we have conducted among industry veterans, this risk aversion can be a barrier to advancing a culture of innovation.
What are common mistakes when companies try to implement innovations?
Many companies get stuck in the early stages of innovation, or what is sometimes referred to as the “cult of ideas.” They start off strong but don’t have the proper programmatic elements in place to actually launch and sustain innovations. There are some companies in the sector that are clearly leading over their competition. These companies tend to invest in dedicated resources for innovation, establish partnerships with other companies that can advance their innovation efforts, and work hard to make innovation part of “the way we do business around here.”
When an innovation is successful what is the key to promoting it to everyone in a company or department? And how do you make employees realize it is helping the bottom line?
Internal and external communication is key. Successful companies shout it from the hilltops, whisper it in the halls, reward employees, thank customers, and do everything in between. Moving innovations from pilot or controlled production into the mainstream business is one of the most challenging aspects of success. The firms enjoying success design this integration into the innovations from the start, include front line workers in the pilot as much as possible, and motivate senior management to innovate their core businesses.
Stay up to date with our upcoming supply chain management research, webinars, and more by visiting our expertise page.
