Innovation as Organization Culture

As I gear up to participant an Innovation forum- I spent very brief time to collect my thought about the topic which we are going to discuss: Creating a organization culture to encourage Innovation especially in Financial Service Industry.

Any successful Organization or Leader will understand and acknowledge that the Innovation is a key drive for business growth. Only by continuously innovation-- new markets, products, services, higher business can be achieved. So It’s important to seed culture to innovate at all levels of organization— Innovations on Strategy/Vision, Procedures/Processes, etc… and senior management should lead this effort by supporting Investments, Empowering employees driving innovations and by setting up cross-functional teams mapping innovation, etc…

Organization has to attract people to share vision, values and enabling them to thrive on performance. Effective and honest Communication is key and will increase employee trust and make them believe that they have an opportunity to be part of decision making process, taking necessary risks and creating environment that is tolerant to mistakes and get recognition/ rewards for performance. Ofcourse, this requires much sustained effort from management team. Leadership has to encourage environment to be creative, experiments, and to certain level encourage individualism. Inspirational managers will become Leaders by creating culture to inspiring employee to be more productive, by articulate vision and shared values. And by helping employees to align their individual goals by working within framework to achieve business goals.

If there is anything we can learn from History, is that-- good innovators has based the work on uncertainty, experiment, and draw the plan from forward-looking customers base. Organization has to create various forum to get employees step out of BAU routines, give them access and involve them through various external & internal resources like forecasting strategy, business plan, technology, new project proposals/plan, employee periodic rotation policy between departments/units which will enable fresh ideas, etc.

Good Example: Google’s 20% time for project of choice. of course, with an required approval process and necessary oversight process, allowing creative employee to be more creative. And Google's also share ideas mailing list: a organization wide suggestion list where people can post any ideas from food, parking to the next best innovations.

Scope in Financial Service Organizations:

Front-End: Changing Distribution Balance. Direct and Indirect Marketing, etc…
Back-End: Optimizing Operational Process, Power of Call Centers & Data Centers, Customer Service and retention, etc..

Few interesting Links:
Centre for Financial Services Innovation
Online Financial Innovations: Strategies & Reports

Global Executive's view on Technology and Innovation

Recently, McKinsey Quarterly published interesting survey Global Executive's view on Technology & Innovation and its role for future growth in their business. Study was done across many industries.

Most important action for growth over next five year (order by highest%):

• Innovation with current product,
• New products,
• M&A,
• Efficient distribution,
• New markets.

Most important capablity for growth(order by highest%):

• ability to innovate,
• ability to manage/allocate talent,
• ability to manage global organization,
• locating capital,
• managing increasing regulation cost,

Action required for operational efficiency(order by highest%):

• Business Process Automation,
• Economy of scale,
• Reducing overhead costs,
• Moving to low-cost suppliers/service providers,
• better managing sales & marketing cost.

Clearly, Innovation is highest priority and Talent management is biggest challenge across industries. and That's seem to reflect in this survey.

Innovation

very interesting presentation about Innovation from Marissa Mayer, Google.

Innovation at some level is dependent and combination of knowledge, practice, people and economic. various studies highlight future trend about rate of innovation (high vs. low) but interest to notice historical data.


Ofcourse, we will still be generating more innovations than the dark ages had but the rate that has declined. I don't subscribe to the continually exponential rate of growth, nor to an imminent drying up of innovation. few factors can be pointed to that make us inclined to feel that innovation will not continue to be healthy. One is that it becomes increasingly more expensive to produce innovations of significance and sources of funding are not increasing commensurately. Environment for Innovation is primary based on policies and funding.

Analyzing Return-On-Investment(/ROI) for innovation is very challenging. what most doesn't consider is that for some innovation, market don’t exist but created by new technologies,etc..

Prioritisation cannot be a process of simply deciding which of the current trends are preferable and then choosing mechanisms to enhance or support their growth. I was reading interest analogy on prioritising innovation-- simple framework is useful and it is helpful to take three complex criteria and plot them on three axes, forming a space in which those can be judged in terms of their likely:

• scale and scope: by which we would take into account the pervasiveness of their utilization and the extent to which they are dependent on vertical linkages.
• temporal characteristics: by which we would take into account the likely rate at which they would be adopted and disseminated.
• controls available: policies, standards setting and regulatory activities,etc...

Prioritizing will always be a process of bringing together a careful analysis of capabilities with an awareness of what is desirable. Only after that does it make sense to take into account the likely rates of diffusion and other temporal features of the early stages in the lifecycle of a Innovation.

Disclaimer: Neither Iam qualified or expert by experience on this subject but I thought to share my view anyways. I recently enrolled to Innovation forum for Banking Industry, not that Iam very senior in my organization(yet)) to influence management decision about future course of actions, but I believe participating, driving and supporting innovation is only better way forward in any industry.