The Problems of Retail Banking (Revisited)

I first published this article on the challenges facing UK Retail Banks in 2011, but I have never published it on my blog.  I was very proud of it then and I still like it now and think the ideas in it are as important today as they were 3 years ago.  I'd be very interested to know if anyone believes things have progressed significantly within the industry over the last 3 years.  I can see a few green shoots but they are few and far between and we are still seeing multiple fines, scandals and disasters.  Definitely still opportunity for a massive rethink and major Innovation.  Enjoy the read

Much has now been written about the impact of the credit crisis and the subsequent challenges facing the UK banking industry.  The intention of this article is not to opine on that topic but rather to look at how these disruptive events have created a new set of operating conditions that will test the capabilities of the traditional UK banks requiring some very different ways of thinking.  Therefore, let me take as a given the forces and impacts in the table below and look at how UK Banks are trying to respond.

Top 5 Challenges	Impact on Banks
A weakened global economy	Need to drive down the cost to serve and increase market share just to make profit at “traditional” levels
A tidal wave of new regulation and security requirements	Need to be seen to “treat customers fairly”, be secure and solvent and be easily auditable
A welter of new digital capabilities	Need to react far more quickly to emergent technology trends to maintain competitiveness against new entrants, maintain security and drive value from existing data
A more financially literate and expectant customer base	Need to provide clear and concise products and services through multiple channels to a proliferation of segments (segment of 1)
A damaged brand and a disenfranchised and change weary workforce	Need to win customers and improve customer service through rehabilitating the brand and reengaging the workforce to deliver unprecedented levels of service and innovation

Given the situation above the traditional UK Banks clearly have to expend a very significant amount of effort on changing the way that they currently operate just to stand still.   Almost all of the UK banks have had their advisors counsel them to retrench and consolidate, undertake massive streamlining programmes and refocus on their core businesses.   Whilst this is not rocket science it is actually proving very hard to do – as evidenced by the sector’s collective share prices – but most of the big UK banks are well advanced on this first part of their recovery plan.  Now comes the really hard part.

Having spent two years trying to staunch the bleeding and re-establish a stable business most UK banks are now turning their attention to innovation and growth agendas as they seek to re-establish their brands, improve profit and increase share price – primarily by focusing on improving customer experience.   Sounds simple, however, there are a series of complications that when considered will make the delivery of the “stabilise and simplify” initiatives look like a walk in the park.   The funny thing is that most of these complications are not material but are actually derived from control orientated, pre-crisis mindsets that just don’t work so well in the post crisis environment. 

So at the risk of coming across as Jerry Maguire does at the start of the eponymous film when he presents his vision of the sports management industry to his peers to rapturous applause only to be sacked 24 hours later, here is my assessment of the state of the major UK banks and a flavour of my vision for the future.

The 5 control orientated mindsets* – what they are and why they matter

 *For the purposes of this article a mindset is a deeply embedded and prevailing way of thinking that is believed to be the viewpoint of the majority of the senior leadership of the organisation – its key features are its presence is difficult to mention and it is difficult to change.

1.     The “unify and simplify” mindset

This mindset is still very prevalent in UK banks and can be summarised as the belief that “the major difficulties and challenges faced by an organisation can be resolved by removing complexity and unifying systems and processes”.   Whilst this seems on the face of it to be very sensible it is the organisational design and structuring equivalent of building the tower blocks of the 60s – seemingly very efficient, practically disastrous.  It is the kind of thinking that exists in a world where growth is a given and the future seems bright and rosy.  It is not subtle thinking – it is thinking for an ordered and rationale world.  It is not thinking for a chaotic, turbulent post crisis world in which digital capabilities present new opportunities on a daily basis.   As a very wise and respected Strategy Director for one of the major UK banks recently said before leaving his post – “the biggest challenge facing the UK banking systems are the armies of former consultants with 2-1 degrees, from red brick universities, who believe that the answer to any problem is to unify and simplify.”  As a current consultant with a 2:1 degree from a red brick I can only agree.   It is deeply rooted in the old F.W. Taylor concepts of monitoring time and motion, seeing customers and employees merely as mechanical agents to be exploited by finely tuning the management systems.  Unsurprisingly many of the “uber” programmes that get launched fail to deliver on their projected benefits as global events and managerial changes take their natural course leaving the well intentioned one programme looking as cutting edge and useful as the aforementioned 60’s tower block.   However, despite the horrible statistics associated with the delivery of benefits from major change programmes the lure of the panacea of the “uber” programme is still very strong.  What we need is a new approach to the delivery of projects and programmes that is more akin to organic growth processes than the mechanistic waterfalls of the 1980’s.

Sadly the obsession with making things neat and tidy and ordered plays very well with the next mindset.

2.     The “Joy of cost cutting” mindset

This mindset is developed when times are tough and the clarion call is made to cut costs.  Of course the good people of the organisation jump into action and the accountants and cost cutters jump to the fore to take the necessary measures to convince the Board and the analysts beyond that the business is under firm control and discipline.  Positive results can often rapidly be shown and praise is forthcoming for those who can demonstrably cut costs.  However, the problems arise as the organisation re-stabilises and looks again to drive top line growth.    Unfortunately whilst the cost-cutting has been going on most organisations have abandoned their forward looking growth initiatives and focused on reduction.  Sadly the time required to derive benefits from top line growth initiatives is often greater than the organisation or the analysts are prepared to tolerate and so the organisation seems to stall at which point the temptation to further reduce costs (because it worked last time) takes hold and the “joy of cost cutting” mindset can be given free reign.  Of course we have now entered into the classic vicious circle and are doomed to undergo multiple rounds of cost cutting as the organisation shrinks its way to success.   Most of the UK Banks are now well advanced on either their second or third rounds of cost cutting whilst all the time hoping that somehow (maybe by magic) top line growth is going to be re found.  Dream on.

Now, do not get me wrong, I am all for an occasional review of how Banks are investing their money and delivering returns, but, to imagine that an organisation can continually cut its way to health and prosperity is madness.  I’m with Steve Jobs when he said* “The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament.”   Unfortunately for the UK most of our Banks are not run by visionary entrepreneurs but by financiers and accountants.  NB in my book there is a very big difference between cost cutting “because we can” and realignment of investment to help us deliver our shared vision to a rapidly evolving customer base.  The joy of cost cutting mindset is never going to be compatible with those looking to deliver cutting edge customer experiences to a digitally enabled customer base.

OK, enough ranting about the joy of cost cutting let’s look at a third mindset that is causing the UK Banks problems.

3.     The “size matters” mindset

Banking, being “one of the oldest professions”, is by nature going to be carrying some level of historical baggage with it.   Over the past 600 years, since the Medici’s professionalised the practice of lending money, size has mattered.  Interestingly, over the last 30 years as global opportunities have presented themselves to the UK banks, size has become even more important as many of the senior executives have sought to establish their Banks on the global stage.   However, whilst the traditional Banks have been seeking to build their own empires many new businesses have created massively devolved business models – preferring to lease “on demand” capabilities from 3^rd party suppliers.  Recently Facebook and HSBC had roughly the same market capitalisation – interestingly Facebook had approximately 3,000 direct employees and HSBC had approx 150,000.   Now before you argue that these are very different businesses let me point out that many of the new entrants into the UK banking market will and are, able to pursue some very different business models to the traditional banks.  Specifically they are not looking to own many of the traditional banking processing operations e.g payments, mortgages and cards – instead preferring to lease these services from the growing number of banking utilities (providing one to many services) that are beginning to get a foothold in the market.

So what is slowly beginning to happen is that the new entrants (who have a better control over their cost base) will invest relatively more on better products or service than the traditional players enabling them to gain more market share.   The traditional banks will be forced to cut costs again (see above), but will still want to maintain “ownership” of the majority of their operations so they can maintain control and prove to their traditional peers that they are important executives.  

However, my vision of the “successful” banking executive of the future is not of a command and control overlord but rather of a passionate executive who runs a small central organisation that affirms brand, leads on compliance and sets business direction.   She will have a team around her that are excellent at managing multiple suppliers to deliver quality services and products to loyal customers who love the brand.

To date the 3 mindsets I have outlined, the “unify and simplify”, the “joy of cost cutting” and the “size matters” mindset can all be argued to actually be useful management philosophies and for those who are students of situational leadership you may wish to argue that desperate times require desperate measures.   However, the next two mindsets are potentially even more toxic and insidious and when exposed infuriate the public and the politicians.

4.     The “entitlement” mindset

Power corrupts and absolute power corrupts absolutely.  For the public the biggest “eye opener” from the crisis has been the insights they’ve been served up by the press and politicians that all too transparently paint a picture of bankers as greedy, self-obsessed gorgons who enjoy the process of ripping off the man in the street in an attempt to prove to their banker mates that they are “winners”.  Harsh?  Not really – it’s actually a pretty good facsimile of what the public actually thinks.   And like in the Wizard of Oz when the curtain is drawn back to reveal the truth of the wizard’s true nature the illusion is shattered.   What has been amazing is that despite the unveiling the Bankers continue to behave in a manner reminiscent of any of the recent slew of dictators faced with the inevitable overrun of their regimes – i.e. talk bollocks and act as if you are still very important.  I’m ranting again (sorry). 

 

However, the point is that Banks do not have a God given right to make phenomenal profits and senior executives do not have a God given right to take home massive salaries.   What they do have a right to do is to carry out a simple, customer focused savings and loan business that makes reasonable profits, rewards effective staff and supports the redevelopment of the world economy.  Sadly, whilst this “entitlement” mindset persists, the ability of banks to “do the right thing” for their customers is going to be limited and we will continue to suffer from the succession of miss-selling scandals that have been a feature of the last 20 years.  Currently the regulators and legislators are having to create and enforce pretty heavy handed rules to ensure that the banks behave themselves – ie there is a persisting belief that the banks will not self regulate and need very careful supervision.

I think what is particularly challenging for the banks with this mindset is that to move away from it requires the senior leaders to display a genuinely new “humility”, a more human and vulnerable approach that sees them think customer first and bank second.  In essence it requires that the banks rediscover what it means to be “servant leaders” and become capable of understanding the valuable role they can play in society.  This will be very hard.  Remember Ozymandias**.

Which brings us neatly to the final mindset.

5.     The “customer as a wallet” mindset

Now I am going to sound like an incurable romantic as I lay out the details of this last mindset but I am happy to appear naive if it gets the point across.  Since the strategy planning sessions of the mid ‘80s the aim for growth orientated banks has been to increase their “share of the customer’s wallet”.  Whilst this seems on the surface like a jokey bit of shorthand, what it has enabled the banks’ executives to do, is to create a distance from their customers – to ignore the very human situations and circumstances of their customers – replacing them with a mental picture of their value to the organisation that would make old Fagan himself proud. 

I am not a wallet – I’m a husband who wants the right house for his family, I’m a Father who wants a safe car for his children to get to school in, I’m a man with a great idea looking to build a viable business, I’m a student hoping to enjoy university and not end up with a crippling debt.  I am many, many things but I am not a wallet.

Now don’t get me wrong – I’m not asking for every mortgage to be approved or loan granted, far from it, what I’m asking for is a partnership with my bank, a bank that will support me through the good times and the bad.  I want my bank to be like a benevolent uncle – close enough to me to know who I am and what I’m about and distant enough from me to give me level and reasonable advice before I do something stupid.  For those of you who have seen Jimmy Stewart in “It’s a Wonderful Life” you’ll know what I’m talking about.  This is a lot to ask, but, it is what I want and I do know one thing – it will never be delivered by an organisation that sees me as a wallet.

6.     Conclusion

Having laid out the challenges caused by these pernicious mindsets the question must now be how can the major UK banks change them and reconnect with their customers.   Being forever an optimist my view is that it can be done, but it will require a real act of leadership from a leader who is prepared to be humble enough to acknowledge the mindsets and innovative enough to elevate the thinking in their organisation to a new level.  To paraphrase the leadership guru Peter Senge – “Leadership is the ability to honestly articulate the current reality and the ability to passionately articulate the future.”  

As a psychologist with over 20 years experience working with Boards to change mindsets I am well aware that this is a massive challenge but I am determined to find an enlightened leader to work with to help restore the UK banking industry to its rightful place as a central and valued player in UK society . 

You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand - Woodrow Wilson

*As quoted in Apple Confidential 2.0 : The Definitive History of the World's Most Colorful Company (2004) by Owen W. Linzmayer

**Ozymandias – mythical leader discussed in Shelley’s eponymous short poem – moral – no matter how great we consider ourselves time levels the playing field

Starting My Own Business (Again) – You have to love necessity

21 years ago, I handed my resignation into my boss and took a leap into the unknown.  I’d loved the work I was doing, it was exhilarating and intense but I couldn’t keep on working for a boss who was driving me nuts.  I was burnt out, confused and pretty angry.  Not one to hang about I got straight on it and began the usual process of looking for jobs in the papers, filling in the application forms and turning up for interviews.  Bizarrely, (I thought), despite my best efforts, nothing was coming off.  Looking back, I think the low point was failing to get an interview for a £12K/annum job to be a traffic crossing supervisor coordinator (basically rostering lollipop ladies).   I was smart, I was talented, I had a good degree – I also had a young family and I needed to make something happen.  I started my first business.

Necessity was (and still is) the mother of invention and out of the ashes of my previous education and experiences, fuelled by a passion to succeed, I was able to grow a new business.  My nascent executive coaching business was little more than an idea and some headed paper but it was enough to launch me into a new world and through begging, blagging, taking some big risks and working really hard I managed to establish a suitably successful business.  Over the next 7 years (and a couple of rebrands) I developed a viable management consulting company that taught me lots about life, took me across the world and paid the bills (most of the time).   Unfortunately most of the time was decidedly problematic for me as I now had a bigger family and a sizable mortgage.    Necessity (in the form of an erratic cash flow) kicked my arse again and I folded my business up to join the dark side.

In 2000 I joined Accenture with the sole intention of easing my cash flow and getting a couple of years experience with a “proper” management consultancy under my belt.  Having been my own boss for 7 years I was dreading it.  How wrong I was.  It was a delight, someone else did the billing, the cash collection, the marketing, the HR processes etc.  All I had to do was the selling and delivery work I loved.   I made Partner, made great friends and built a bigger business network.  After six happy years at Accenture I was approached by Capgemini to join them.  I eventually succumbed to their charms and launched into five more happy years at Capgemini. 

However, by the start of 2012 I was beginning to feel unsettled at Capgemini and was beginning to think through my career aspirations.  By the middle of 2013 I had determined I needed to leave and do something new and thus began the search for the next career step.  Not in any hurry I put out some feelers, but didn’t push it.  Like the slowly boiling frog I just couldn’t get my bum in gear.  Then at the beginning of 2014 Capgemini engaged in a restructuring process and made me an offer I literally couldn’t refuse.   A month later and I’d left with a sense of relief and excitement.  Interestingly, rather than rely solely on the talents of recruitment companies to determine my next career step, I find myself starting my own business again.  I’m very excited.

I’m 21 years older, a lot less naive, less angry and considerably more financially stable.  I also have bags of experience and a huge business network.  Ironically it has taken necessity to get me to this position again.  My new company addonova is my second services company start up, providing consultancy services on Digital Innovation and Transformation.   We already have our first contract and I have found that I still have more than enough drive and energy to ensure that I can make the business work.  I do like to prove a point.  So, once again I’m living the innovative entrepreneur’s dream and I will let you know how it goes.

Reinventing Corporate Social Responsibility – a new business blueprint

Dear Reader, this article is a bit of a leftfield departure from my standrad innovation blog fare - but hey that's no bad thing for an innovation blog. This article gives my own jaundiced take on the current western economic context and for those of you who find this a bit political I can only apologise.  Normal service on the why's and wherefore's of Innovation will recommence shortly.  Have fun reading

It is now over 5 years since the western economic machinery almost ground to a halt as a result of the entrepreneurial/cavalier/negligent/fraudulent (choose your own adjective) activities that generated the credit crisis.  Now, regardless of your choice of adjective, you would had to have been living in a very isolated bubble not to grasp, that when it comes to the conduct of business and the general public’s viewpoint on it, the world has changed.

Prior to 2008 you could describe the general public’s view on how big businesses operate as at best apathetic.  For most people the economy was delivering, house prices were rising, jobs were plentiful and savings were growing.   There was a wonderfully/tragically naive level of trust in big business as it simply got on with doing its thing.   Little did we, the general public of the western democracies, realise that the economic “good times” were only temporary and that we would be paying heavily for them over the next decade or so.   

However, after the initial shock of the crash has faded, it is clear that the public has neither forgiven nor forgotten the captains of industry as the strictures of austerity are felt across the western economies.  Far from it.  Instead the public’s attitude has become increasingly hardened and militant when it comes to the conduct of big business and its leaders. 

This hardening of heart towards big business has been further fuelled by the continuing scandals that have battered the ramparts of big business.  Most scandals can pretty much be reduced to a combination of the following headlines – (Insert the correct adjective) Incompetent/greedy/fraudulent (Insert the correct noun) fat cat/banker/boss (insert correct verb) steals from/defrauds/rips-off (insert correct noun) customers/investors/public.

This diet of expose and scandal has only been exacerbated by the simultaneous undermining and exposure of both the politicians and media who are supposed to be the guardians of society who have also been caught with their noses in the trough and the seemingly ineffective activities of the multiple regulators.

Now whilst most citizens feel little or no desire to go on an Occupy Wall Street demo or riot in the streets you only need to do a quick vox pop to discover that the public is frustrated by/angry at/loathing of those who appear to have profited from the crisis whilst others have suffered.   Nowhere is this more obvious than in those businesses that the public consider to be vital to them as they conduct their daily lives.  Specifically, located in the bullseye of public antipathy are the retail banks, the utilities and the transport providers closely surrounded by the supermarkets, public services and the oil companies with the communications providers just a bit further adrift but still in range.

The public seems to have concluded that just letting capitalism do its thing in these vital areas of societal infrastructure is both highly risky and morally wrong, but how do you do it without getting into a big unproductive mess of public ownership and a return to the 1970s.   The beast of public opinion is hungry for action but it seems only to be being served up an occasional soupcon of schadenfreude by the regulators and courts and piecemeal tit bits and solutions by the politicians who seem remarkably short on ideas but long on rhetoric.

Leaving aside the specifics it appears that when it comes to the provision of the core societal infrastructure services, what the public wants is to have well run industries that price fairly, with a view to make enough money to both survive and reinvest into their services but do not make “excessive” profits for their senior executives.  In my opinion the public is now genuinely interested in creating a framework within which a socially responsible business could operate.  Last week the Swiss public voted against capping executive pay at 12 times the pay of the most junior staff.  Now, the fact that this was even an option for a public vote is truly notable and an interesting sign of the times.

So what would a true corporate social responsibility agenda be about?  Clearly it has to be about more than the standard delivery of the raft of the good and worthy charity related activities that drive employee engagement and positive PR.   Currently social responsibility is a corporate nice to have not the overwhelming business philosophy that the public are demanding.  To my mind there are a few key aspects that would both meet with public approval and deliver reasonable economic outcomes for the western economies.  These may feel very heavy handed and a tad “socialist” but I sense that the public is only interested in having this layer of social engineering sitting over its key infrastructural services not the entire economy.  Also, having worked extensively with financial services clients over the last five years it is clear that many are looking diligently to reinvent themselves and regain the trust of the public but they struggle to persuade their senior management teams and institutional shareholders that becoming a truly “responsible” corporate social entity is in their own best interests – legislation is therefore required.

And what would be the constituent elements of a publically acceptable yet business compatible set of legislation that could be applied to those businesses that constitute our societal infrastructure?  Here are 5 ideas as a starter, all other ideas gratefully received.   NB These are all ideas that already exist and are applied by some businesses.  I’ve just bundled them up and given them a context.

1)   Customer Stewardship.  Ensuring that a company actively supports their customers in the procuring, provision and usage of their products or services – actively keeping the interests of those who rely on the products and services at the heart of their business processes.

2)   Tax Probity.  Ensuring that all taxes are paid fairly and fully in their country of origin.   Not doing deals to hide taxable money but openly and willingly contributing to the country of operation by paying tax

3)   Reward Sharing.  Ensuring that the differential between the remuneration packages of the most senior employees and the most junior employees are within a defined ratio e.g. 1;12 as per the Swiss option

4)   Long Term Management – Ensuring that any additional rewards (bonuses/pay-offs etc) are related only to long-term positive outcomes for the business. 

5)    Infrastructural Reinvestment – Ensuring that a substantial proportion of the profits generated are reinvested into long-term infrastructure projects to ensure the effective long-term, low cost, assured delivery of the service for generations to come

Of course this kind of radical reengineering would be hated by the business world but the debate shouldn’t hurt us.  Look forward to hearing your viewpoints.

The coming rise of the wearable device

If the noughties was the decade of the meteoric rise of the mobile communication device (tablets and phones) then the teens will be the decade of the meteoric rise of the “wearables” – and you can quote me on that.   For those not familiar with the concept of wearables it is the blanket term for technology warn on or carried on the outside of the body.  Wearables are related to but different from the emerging embedded and ingested devices that are both just at the start of their development cycles. 

Now wearables are nothing new, we have been living with the modern version of the wearable since the introduction of the digital watch.  However, what encourages me to make such bold statements about the future of wearables is that it just seems as though their moment has truly arrived.  Why?  Well the recent advantages in several technological areas such as Tech Portability (size and robustness), Data Analytics and Mobile Access seem to have paved the way for the creatives to begin the process of using wearables to refashion our lives with the same kind of scale and impact as they were refashioned by mobiles and tablets.  Woohoo.

Of particular interest to me, is not so much the frivolous fashion applications e.g. T-shirts that go a different shade depending on your mood or even the miniaturised wrist worn Samsungs, Sonys and soon to be apple devices but the multiple potential business applications.  My sense is that wearables will undoubtedly change the way we work and live.

Here are a few possible application areas:

Health and safety in the workplace

This is perhaps the best explored area to date and a land of opportunity for wearable developers.   Multiple applications have already been identified and some are already developed.  Today’s workers can already have their stress levels, blood pressure and postures measured (and corrected) and coming soon will be all manner of additional services and devices assessing our physical state at work.  These will include our general levels of alertness, stress, sobriety, health and energy.  A sub group of these devices, which is already gaining exposure, will focus on our ability to safely operate machinery (including company cars).  These devices will provide a composite service that monitors both our physical state and our technical capability as determined by how the machinery responds to our commands/touch.

This should in theory reduce the risk of accident and ill health at work and put us as the workers into a more competent and productive space.

Healthcare provision and health insurance

Of course a closely related branch of wearable devices to the health and safety workplace monitors described above will be the personal healthcare wearable devices that we will choose to wear in order to provide a) the medical professionals that we are interacting with an in depth and up to date view of our key metabolic indicators and b) to provide ourselves and/or the emergency services with a range of specific early warning monitors that activate at the first sign of heart attack/stroke/major accident etc.   These devices are already changing the way that companies offer health insurance with reductions in premiums becoming more and more likely for those that can prove (through the info provided from healthcare wearables) that they are living a healthy lifestyle.   They will of course transform the way GPs “see” patients, enabling them to conduct appointments remotely.  This of course is very good news for all those of us who find it nearly impossible to book a standard appointment at a time that suits us.  Wearable infection monitors could also enable companies to send home infectious employees at the first onset of infection reducing general germ spread and safeguarding overall workforce health.  Obviously this would be very “Big Brother” and intrusive but really quite logical and sensible and probably a step too far.

Facilities management through location monitoring

Just like the marine biologists tagging a school of whales to study their behavioural patterns it will also be possible to tag the entire workforce to study their behavioural patterns and building usage patterns.  The ability to tag and monitor the workforce and its patterns of usage within a building would enable a company to deduce all sorts of information that could prove useful.  Which areas of a building are utilised the most? Are these the areas that will require the most heating and maintenance?  How much desk space/room space is utilised in real-time?  Should overflow facilities be provided?  Where do people gather to talk?  Are there enough quiet areas etc, etc?

This is of course an extension of the work being done on developing smart homes/smart buildings.  What is interesting is when the users of the buildings are themselves monitored and add to the richness of the data available to the facilities managers.

Access & Security (ID &V)

A closely related area is that of the use of wearable devices to act as access, security or ID and Verification instruments.  Whilst this is clearly already a part of modern life through the wearing of ID badges and building passes the ability to have an attractive and personal “ID bracelet/dog tag” that operates via NFC technology would be appealing.  There is much more that can be imagined in this space but it’s all pretty much based on the same basic ideas that any “worn” identifier needs to be matched by a second identifier if the security needs to be anything more than basic.

Sales Effectiveness

This next idea is a bit of an imaginary leap.  I want you to imagine yourself as a salesperson asking a client to wear a monitoring device whilst you are walking them through the process of making a significant purchase (car, house, loan etc).  The reason you are doing this is to be able to prove to the industry regulators that when you sold that particular good or service that the customer was alert, sober and not under undue duress.   Too far?  Well, given the increasing need to demonstrate good sales behaviours in many industries this may not be really that far-fetched.  Meanwhile, closer to the here and now there are a growing number of wearables that are already being used to monitor interactions and train new staff (including cameras or voice recorders).  These can only get more sophisticated.

To conclude, it seems to me that it is not so much technology that is now the impediment to the rapid development of wearables but rather our imagination and eye for an application.  As a result I think I can look forward to seeing a massive surge in the quality and quantity of wearable devices and applications throughout the rest of the decade.  Bring it on.

Excited about Digital all over again – thoughts from a digital enthusiast

Whilst touring through Spain & France this summer (on what was effectively an extended wine crawl) I had the time and inclination to ponder once more the whole digital revolution concept and it got me excited about digital all over again.  Now for those of you who are quick to judge and are righting me off as a sad case, I did also think about lots of other things on hols too and I swam in the sea, played with the kids, visited art galleries, admired amazing architecture etc, nonetheless, the notion of how digital technologies could change our futures is one I do find exciting.

Ironically on arriving back in the UK I was once again confronted by a wall of negative scare stories about digitally related topics on data protection, internet safety and government monitoring.  So to maintain my enthusiasm and redress the balance this is a blog from an unashamed digital enthusiast looking at the positive outcomes the digital revolution will bring to our lives in the next 10 years.

1)      Smart Homes:  Yes our homes will be getting a brain in the next 10 years and that will change everything.  Here are a few highlights.  No more faffing around under the stairs with a dodgy torch reading your gas and electricity meters, it’ll all be done remotely.  No more walking into a cold house after work or school, you’ll have put your heating on remotely before you leave work specifying the areas of your house that you are likely to use that evening.  No more wasting money on lights you left on when you went out, you can turn them off using your mobile.  You can also monitor and change all of your energy and resource usage as you’ll be able to see it all through a simple mobile interface.   Not only that your fridge will let you know you’ve run out of milk (or anything else you regularly use) and offer to have more delivered.  Your pantry will know you need more bread, rice, pasta etc and offer to have that delivered too.  Even your cats can be fed remotely and you’ll be able to watch them via your tablet device to make sure they’re eating OK.  There’s plenty more here but I’ll press on.

2)      Health & Safety:  Not the dull restrictive stuff but the really useful stuff that actually helps us to be more healthy and safe.  We’ll be able to monitor ourselves our family members and pets in a whole new way.  Location tags will enable small children, errant pets and the “at risk” elderly to be monitored remotely on our mobiles enabling us to find them when they wander off or worse.  Our heart rates, calorie intakes, sugar levels, temperatures etc will be constantly monitored via our mobile devices giving those of us that want it the chance to spot and respond to unhealthy lifestyles and/or potentially fatal diseases.  We might even be able to cut out the nightmare of getting a Doctor’s appointment via the receptionist by booking directly online and talking remotely to the doctor via our tablets from work or home whilst he in turn reviews our latest blood pressure and temperature readouts that we’ve given him mobile access to. There’s so much more good stuff here but I must move on again.

3)      Transport:  Whilst we won’t see teleportation in the next 10 years our transport systems will be far smarter moving us more safely and often times more quickly than we can manage on our own.  The vast networks of cameras and devices capturing data on our travel habits will be better utilised to provide real time “best options” for finding the quickest routing to our chosen destination.   In addition, according to Elon Musk of Tesla we will be taking autopilot to a whole new level on our major highways too.  An array of sensors and a slew of chips will ensure humans will take a back seat being merely a back-up system for the far more capable digital capabilities built into our vehicles.  In the meantime, driven by our Insurance firms, we will be deluged with more and more information about our driving styles and flaws in an attempt to improve our driving and reduce accidents (and of course claims).

4)      Shopping: In addition to the impressive integrated high street/digital shopping experiences we are already seeing from the likes of Burberry and the order anything online capabilities available via amazon and others we will see a further shift in our shopping habits at the far end of the decade driven by a maturing of the new capabilities of 3-D printing.  The ability to order and print out at home or the office an array of goods and spare parts for our lives will be revolutionary too.  It will change the way we shop for a large array of goods.   Need a new lightbulb, print it.  Replacing a dental brace, print it.  Want some new jewellery, print it.  We will also see the mass use of 3-D printing by the manufacturers themselves to improve and speed up the manufacturing process whilst reducing the costs and hopefully the cost of goods.  Seem like sci-fi?  It’s coming.

5)      Education: As we have all long understood, knowledge is power and the ability of our best educators to package up their greatest insights and post them on the net in bite sized, brilliantly constructed, accessible packages will continue to revolutionise the way we learn not only in the UK but across the globe.  Wherever there is a power source and a mobile connection people will be able to learn.  My son recently visited China and stayed in a village with no running water but great internet connections, definitely a sign of the times.   With the costs of universities increasing the option to learn at your own pace in your own time whilst working will be increasingly popular.  Sorry Michael Gove, digital advances will ensure that teaching will finally shift from being a profession that imparts content to being one that enables pupils to access and get the best from the available content.  We will see the use of immersive technologies (google glass, virtual reality environments etc) delivering far more memorable, tailor made learning experiences.  Personally I can’t wait to do a “nature walk” whilst my google glasses identify the birds, trees and plants I’m walking past.

OK, enough already.  There’s loads more that will change in entertainment, communications, finance and every aspect of our working lives but that’s for another day.  We are only just at the start of this digital revolution and it should be quite a ride.  Finally I’ll end with a plea.  Yes, of course there are challenges that arise from a digital future relating to ethics, security, privacy and others but please let’s not skimp on providing the infrastructure and investment required to underpin the rosy future.   Maybe we should be looking to invest billions in new technology infrastructure such as universal wifi coverage and broadband connectivity to ensure rapid internet access for all with the same level of doggedness that we are looking to spend billions on the technology of the industrial revolution such as the High Speed 2 rail link.   Here’s wishing us all a happy and prosperous digital future.

Oh and for those who need some further convincing check out the words of wisdom of MIT’s Andy McAfee on the subject http://www.youtube.com/watch?v=AZ5ePL36BbU&feature=youtu.be

Practical Innovation in a Digital World - Building the Ideation Ecosystem

Reader Warning:  If you are looking for the kind of levity, light-hearted banter and insightful amusement I usually conjure up after a couple of stiff sherrys then this is probably not the blog for you. This one is a bit serious and is the first in a series of similarly serious blogs that will take an in depth look at the sub-processes that underpin the process of Corporate Innovation.  That doesn’t mean the blogs will be dull (hopefully far from it) rather they will be quite technical and suitable for those that consider themselves practitioners in the field of Innovation.  Warning over, read on at your peril!

This blog is about Ideation* – the elemental and almost magical sub-process at the very genesis of the Corporate Innovation process.   It is a much misunderstood process and a little explored one.  The generation of ideas is often seen to be the exclusive, secret domain of the visionary entrepreneur, the maverick R&D guy or the corporate alchemist, certainly not the result of a process that can be quantified, systematised and regularly replicated.   Now whilst these rare corporate beasts can undoubtedly catalyse and accelerate the process they are most definitely not the process itself and quite often they can actually slow or derail the process in a fit of pique.  Now I have written about the detrimental propensity of CEOs to seek out these Wizard of Oz types in a previous blog and so won’t replay that rant here.  Suffice to say, in practice, the process of Ideation itself is a bit more mundane than the magicians and snake oil salesmen would have us believe.  The generation of useful ideas is a lot more about the outcome of the hard, disciplined work, carried out by dedicated professionals than the result of a favoured kiss from the ideas muse.  Those that have been tasked with delivering Ideation will nod sagely on hearing award winning novelist Philip Pullman’s quote “Amateurs think that if they were inspired all the time, they could be professionals.  Professional know that if they relied on inspiration, they'd be amateurs.”

So how does an Innovation professional set about generating a set of quality ideas that can potentially be formed into concepts that can be prototyped and tested?  There are three key elements for the Innovation professionals to assemble.  The first essential element is having access to a rich source of ideation inputs – the thoughts, suggestions, ideas, tech and stimuli required to generate innovative concepts.  The second is having a reliable, generative ideation process through which to sort, play with, combine and recombine the inputs in a way that generates innovative concepts.  The third is having access to a creative team of stimulated professionals whose brains this ideation process will be carried out in.

The rest of the blog will look at each of these elements in detail.   Without these elements Ideation is a random, haphazard and rare occurrence, pretty much what it actually is for many corporates.

A quick but related digression, I still smile to myself when I remember working with a UK high tech manufacturer that was short on ideas.  I asked them to arrange a meeting with the senior managers to discuss the Innovation process.  “Ooh,” said the coordinator, “we can use the Innovation room.”  I replied that sounded great.  On the day of the meeting I was ushered into the Innovation room – which turned out to be an oblong, grey walled, windowless room with plastic seats arranged in rows.  Strangely I didn’t have to work too hard that day to convince the client that they needed to make changes – especially of they wanted to think outside the very grey box in which they literally and metaphorically found themselves.  So let’s get to it.

1)      Creating a rich source of Ideation Inputs

Generating rich inputs requires high quality networking and an ability to expand and leverage the relationships and ecosystems of the corporation.   Below is a table of a tiny fraction of the different ways Corporates can and do plug into a flow of ideas from the easy to access to the more hard core link ups. 

Hard Core	Serious	Traditional	Easy
Tech Partnerships	Academic Links	Industrial Tourism	Conferences
Tech Start Up Links	Commissioned Research	Staff Suggestions	Social Media Feeds
Specialist Idea Brokers	Supplier Ideas Forums/Fairs	Customer Feedback/Complaints	Guest speakers
Patent Tracking	Big Data Analytics	Internal Data Analytics	Literature reviews

The key here is to generate a manageable flow of ideas that those charged with generating Innovation concepts can handle.  Too few ideas and the Innovation hopper will be barren, too many ideas and the Innovation hopper will be overflowing and unmanageable, creating waste and disillusionment.   N.B. There is no single “secret source”(sorry),  the successful Corporate Innovators will have a whole raft of sources from which they draw ideas.  The key skills required for delivering a rich source of ideas are network building and curiosity.

2)      Developing a reliable, generative Ideation Process

Now this element is a little more complex and a source of heated debate between Innovation professionals.  Again there is probably no right answer here but there are probably better ones.   The minimum requirement is the ability to structure the time spent playing with, combining, refining and assessing the ideas.  This is serious play.   There are numerous techniques available ranging from the basic brainstorming processes, through analytical and scoring techniques to the more developed Triz process and its modifications and abstractions.   The key factor here is that the Innovation professionals actively manage themselves through a process or a series of processes.   The complexity here is that the processes have to encourage room for play, spontaneity, what if debates, flights of fancy and slack time whilst maintaining their rigour as a process.  As a result facilitation is key.  The key skills required to be able to develop and operate a reliable, generative ideation process are playfulness, curiosity and facilitation skills.

3)      Building a creative team of Dedicated Professionals

Finally it is important to remember that innovation is not some abstract event.  Humans are not just catalysts in the process they are a living Innovation substrate.   Ensuring that your Innovation team is in the best possible shape to innovate is therefore important.   This, of course, means that recruiting or renting the right people, with the right aptitudes to work effectively as part of an Innovation team is crucial, as is providing them with the right physical locations, stimuli and props.  However, it does not mean keeping them overly comfortable.  Necessity is the mother of invention and diversity and conflict (in small doses) can be excellent catalysts.   I’m aware I’m making this sound a little like alchemy and of all the elements I’ve looked at in this blog this is the one that is the most esoteric.   However, having an effective team leader that can manage the state of their team to enhance Innovation is a real find.   Whether that means exposing the team to third world experiences or cosseting them in comfy cushions, the ability to keep changing it up is essential.  The key skills required to build a team of creative, dedicated Innovation professionals are therefore team management and creativity.

Hopefully that has provided a bit of an insight into Ideation, the primary sub-process of Innovation and its base elements.  There’s much more that can be said and written about these elements but that is not the stuff of a blog.  Do get in touch if you wish to discuss.  Further blogs on the other sub-processes will follow.

N.B. I’d be remiss if I didn’t add that in today’s digital environment it is also possible to “outsource” the ideation process by setting up hackathons, hosting social media discussion groups, sponsoring prizes for innovative solutions and all manner of other mechanisms.  These are all relatively new mechanisms but are proving popular and well worth trying.  Have fun Innovating.

*The process of ideation in a corporate setting is the process for the generation of ideas that, if applied to the corporation, could have a relevance to one or more of the stakeholders of the corporation.