Two of our Future Shapers, David Cowland, a Technology Director at Fidelity International and Simon Hill, CEO and Founder of Wazoku, recently got together to talk through their shared innovation journey. Here is a write-up of that discussion and the valuable insights that came out of it…
SH: Hi David, I hope you’re well? Today, we are going to talk through a somewhat metaphorical story about an established firm that’s seeking to become more innovative. I say, ‘somewhat’ metaphorical, as it will draw on your experiences at Fidelity, but we will also lean on metaphor on occasion to help bring some of our examples to life.
To kick us off, I want to ask you a rhetorical question: Were not all businesses innovative once? After all, every business is a start-up at the beginning…
DC: Hi Simon, a good question and the perfect opportunity to kick things off with a metaphor! I would like to invite the reader to join me in this story: Yesterday, metaphorically speaking (!), you were the CEO of an established, large, nicely profitable company. Maybe you were not in the number 1 position in your sector, but you were doing well. Your products were tried and tested and well received in the market place. Life was good. Today you woke to find that someone had disrupted this comfortable existence. Not only that, but they were taking your customers and eroding your healthy profits, with innovative, technology-powered solutions and automated processes. Not constrained by legacy systems, outdated or traditional practices, they are moving fast, changing constantly, and adapting to an environment that seems to be changing monthly and growing rapidly.
SH: This is a reality for every sector. Too many have spent too long naval gazing, dismissing the pesky start-up as nothing more than a fad, with no real market share, unable to compete with their scale and marketing power, and thinking that their customers trust them, so they therefore won’t take the risk of working with a start-up company.
Have you heard of the Singularity University?
DC: Yes, I’ve recently been made aware of them and have been reading through a number of their interesting articles
SH: Yes, it’s a really interesting topic and the approach they take to some of the world’s biggest challenges is really fascinating. I recently wrote a post in which I cover this topic in more detail (entitled How to avoid the iceberg). The reason I brought this topic up, is that once we realise the need to change, it’s often too late!
DC: Which is exactly my point; whatever the company in my story needs to do, it needs to be done fast. These start-ups are not taking years to become established, they are doing it in months!
SH: Very true, and they are building credibility and trust in ways not previously witnessed. They are able to build agile technology off the back of Google, AWS or Azure for a fraction of the cost of your legacy systems, and come to market with a more open-source, integration-first, iterative mindset – and at a price point that brings tears to the eyes of the legacy provider!
But let’s assume this isn’t news to anyone. We are aware that disruption through tech is a thing. What can the incumbent, legacy business do?
DC: Okay, so you know that your organisation needs to innovate. The question is, how? You have thousands of staff spread across multiple regions. The company is diverse, both in terms of product and culture. There is no way that you and your board can make the changes on your own. In fact, you need the input of a younger generation to help define new products and processes for the new generation; you need a different approach. What you have is the experience to drive the transformation as, after all, you got the company here in the first place.
What happens next has been happening across any number of industries and tends to break down into a number of phases, along the lines of the ‘Why Where, How and What’ of Innovation.
SH: A nice framework approach to work to, excellent! There is a great website, book and TED talk by Simon Sinek on a very similar topic and, as you dig into this topic more, I recommend giving that TED talk a watch. Adding ‘Where’ to his ‘Why’, ‘What’ and ‘How’ approach is important in the context of the innovation challenge, as there are so many areas to potentially focus on and so many competing requirements. It is vital to identify where to focus time, resources and energy, aligned to the purpose set in phase 1 – Why?
Could you please share your views on the four innovation spheres, David, and I will chip in with any thoughts as we go…
Phase 1 – Why Innovate?
DC: The world is changing – rapidly. It used to be that a new challenger in your market would take at least five years to become established and start threatening you. Then it became 18 months. Look at Tesla. They have a market value bigger than Ford but sell substantially less cars. However, the innovative approach they are taking is grabbing attention and, slowly, sales. If you are not innovating, it is not just that you are responding slowly to challenges, you are now dead in the water!
Innovation has got to become part of the DNA of every company – innovative solutions, putting technology at the heart of what you do and driving a people/talent agenda.
SH: I actually think we can take this question in its most literal form. I see so many firms racing to innovate, but lacking the strategy and direction, so they run-off and do some stuff with automation or AI, but to what end? I think this aligns nicely with your second phase…
Phase 2 – identifying where to start?
DC: It does indeed. As you look at your organisation, you realise that there are definitely pockets of change already occurring. Your Operations team may have a suggestion box, your Client Services team have been logging ‘issues’ in a database for years and several teams are engaging consultants on ‘transformational’ change programmes. Your Technology team are probably already using a neat piece of kit for their ideas. Regulatory and compliance changes often hit your company and you make all of these changes every year so it isn’t as if you can’t make changes – but now it needs to be joined-up. The whole company needs to be driving an innovation strategy and taking collective ideas through to delivery.
At this stage, innovation and ideation are blocked by a number of issues:
Ideas are not owned by the right people. Someone has made a suggestion or logged an issue and the view is that ‘management’ will or should deal with it. There is a lack of ownership of these ideas. Some of it is a cultural response – “I’m busy, I have a day job” or “that’s not my responsibility”. Some of it is because there isn’t a drive from the top to adapt and evolve within an ever-increasing change environment.
Ideas are duplicated across teams that don’t talk to each other. We also often think in a silo mentality whilst our products and clients go horizontally across the organisation. Our ability to make cross-functional change is small if we are not talking to each other.
Finally, we have lived for a long time in a ‘waterfall’ delivery environment, where we need a perfect solution for our imperfect world.
Firstly, what we need is an innovation initiative with top-level sponsorship and drive. This type of thing has to be driven from the top down, as that is where the decision makers and people who hold the budget are. However, it can’t be a top down only initiative. The executives have to be willing to create ownership and accountability at a low-level, to change the culture so that everyone takes ownership for creating ‘everyday innovation’. As Gareth Morgan says in his recent article, it’s about changing mindsets to get to the right behaviours.
SH: This is true, and I have seen this happening in many companies and across many industries…
Phase 3 – How do we get started?
DC: Once the CEO has worked their magic, provided leadership, vision, enthusiasm and a commitment to drive an innovation culture, there has to be a mechanism for capturing the ideas. A decentralised model is not going to work. For innovation and ideation to work, you need a collaborative environment where ideas can be generated, discussed, reviewed and executed. It is important to ensure the ‘community’ of users (all your staff) have the ability to be involved and to comment on (or just ‘like’) an idea.
At Fidelity International, we reached this stage early on in 2014. Almost every team had an innovation/suggestion box or database/spreadsheet. The Technology team had been driving a social-media type ideation site that allowed for contributions and comments to ideas, with those receiving sufficient ‘likes’ then progressed to the next stage. However, as we passed 900+ ideas, managing the process was becoming difficult.
What we needed was an ideation platform that married together the capturing of ideas and the social inclusion of our staff with a workflow tool that allowed ideas to be managed through a review and approval process.
And we wanted to move fast.
SH: Yes, I recall those early conversations and the need to build out from your existing platform quickly. You had achieved some great results, but were at risk of becoming a victim of those early successes, as your current SharePoint based solution wasn’t really built for scaling across the whole organisation.
DC: Exactly. We considered building out a platform ourselves but, in the end, we settled on finding a solution in the market. We took a SaaS solution from Wazoku and, together with a minimum viable product approach, we had a site live in December (from initial conversations in September).
Our first challenge was issued in early 2015 and its success was more than we could have hoped for. The ideas came flooding in!
Phase 4 – What to do with the avalanche?
SH: So, job done, right? Everyone engaged, ‘tick’, Ideation platform live, ‘tick’, ideas flooding in, ‘tick’. Wrong! You have just got to the end of the 100m sprint to find that the finish line has moved out 26.2 miles! This was never a sprint!
DC: This is a key point and one that many companies have faced (and not been prepared for). We managed to clear the first hurdle, but now the challenge is delivering the ideas and sustaining the pace of change and innovation. The number of ideas can be overwhelming as you tap into that latent enthusiasm in the company. If, like us, you had a general ideas bucket, you can find that the ideas have a very wide range in applicability. They range from the small, “can we just change x?” idea through to general sustaining ideas. The truly disruptive ideas only surface occasionally, although they can have the biggest impact…
For example, in our Fund Accounting space, someone noticed that moving the printer more than halved the time it took for most of the team to walk back and forth to it (at a time when we were still printing a lot!). This was a simple idea that quickly generated enough ‘likes’ and was quickly implemented; nothing massive just a sensible change. A bigger one involved a refresh of our Investor Centre; it was looking dated, to say the least. An idea came up to modernise it completely, with a big wall-screen, tablets for customers to browse on, and a modern, bright look that would attract a new generation used to a different user experience and use of technology. This was going to take more than a few dollars to achieve, but it got signed-off and now we have something that looks like it belongs in the 21st century.
The issue we started to run into was one of focus. The ideas were coming in fast, they were good, and we had good staff engagement from the beginning (we had over half of our staff engaged on the site within a matter of months), but they were not always directed at the big challenges facing our organisation. This is where a ‘challenge’ based ideation approach really works. The idea is to set a challenge that is open for a set period and then closes. The ideas generated are reviewed and assessed and the critical few ideas then progress to execution. It also helps to drive participation, as the teams directly affected by the challenge are bought into the ideas and tend to want to own any solution.
To date, we have run over 20 challenges that have generated hundreds of ideas and tens of thousands of views.
And finally – On the road towards ‘Everyday Innovation’
SH: For those not familiar with the challenge we set to our clients at Wazoku, we task them with becoming ‘everyday’ innovators. These are firms where innovation is a part of everyone’s job, in every department, every day – where great ideas and innovations are the by-product of being a world-class organisation. You can read more about this here. It would be nice to delve into this topic further with you David, but I think we are running out of time. What are your closing thoughts on this?
DC: The job is never done. You have to work at it and focus on it all the time, both as an organisation and as individuals. As you say, the goal is to embed this in the everyday working practices of the organisation. The core DNA of every organisation needs to be living, breathing and executing an innovation mindset. Once you have achieved Phase 4, the next phase is therefore all about sustaining it. Continuing to focus on the challenges that face your business (these should be coming out of the overall business strategy), making those challenges achievable within your ideation platform and driving a culture of innovation throughout the organisation. If you are looking at innovation as another project, then you have probably missed the point. As you say, the goal is innovation as part of the very fabric of the organisation, every day!