There is a saying in the startup/technology innovation community that states that most overnight successes take at least 15 years of hard work. And yet, it all starts with an idea, and a lot of effort is put into the creative process of generating ideas. Since it takes so much time and effort from idea to commercial success, it makes sense to try to leapfrog and borrow ideas as much as possible. My more formal thoughts below, as applicable to a bank…
Idea generation is an important starting point in the innovation process, even though just an idea is never enough. Ideas, while an expression of creativity, are most of the time a reflection of more general emerging trends in technology, business and society, as well as new business models. Many companies collect today thousands of ideas from employees, some have organized formal idea management processes and idea collection events involving customers using crowdsourcing principles (Sberbank Looks to Crowdsourcing to Generate New Ideas | The Moscow Times). While these efforts are useful for generating a large number of ideas, the amount of work needed after idea collection is huge – sorting, scoring, giving feedback – and involves a large number of business owners and subject matter experts.
Another method useful especially in generating and building on new ideas is the in-person workshop, with participation from both line of business specialists and technology subject matter experts, usually facilitated by a design specialist. Companies like Ideo (IDEO | A Design and Innovation Consulting Firm) and Frog are world leaders in the field of design thinking, and can help guide the ideation process and insight discovery, typically resulting in a number of well-defined concepts. Both methods described above require significant resources if they were to have any chance of succeeding, and can be used successfully to guide the innovation activities in an organization .
An alternate model is the “open innovation” model, where a company is using ideas from outside its realm and commercializes them. The key observation supporting open innovation is that “not all of the smart people work for us” and the core principle is that external R&D; can create significant value for the bank if internal R&D; can convert that value. In the case of financial services organizations, this involves the continuous scouting for financial services technology startups (events like Finovate), monitoring of startup competitions (like Innotribe SWIFT startup challenge), and involvement in technology research activities with leading universities and research groups around the world (“horizon scanning”). For each potential technology innovation partner identified, internal R&D; teams should formalize a collaboration/partnership agreement and work to convert the externally-generated idea and technology into an internal experiment.
Yet another model relies on monitoring and analyzing the banking innovation landscape — competitors, partners, vendors, industry experts (Gartner, Forester). Web sites like bank innovation provide a running log of events from around the industry that feed the idea generation pipeline for the bank. Of special importance in this respect is the Gartner Emerging Technology Hype Cycle, published annually, that can be used to assess the maturity and potential impact of emerging technologies that may help the bank achieve its objectives better and faster.
The Gartner Hype Cycle also helps with two important assessments of all new ideas – the “correct” entry point, and the appropriate bank team that should work on its implementation. The entry point is defined as the time on the technology maturity curve when the bank deems it can get benefits in less than one year – otherwise, the experiments have only the public relations value of a technology showcase. In reverse, if an idea is supported by a mature technology, the appropriate team to implement and deploy it is the IT team (not the R&D; team) and the deployment process does not require experimentation.
In summary, a more systematic approach to generating ideas is needed, and different methods should be used by any organization that wants to get results a little it sooner than 15 years from now…