Innovation and the Future-Proof Bank
I’m very interested in James Gardner‘s work on innovation and having had to the opportunity to interview him for our Consult Hyperion podcast series and involve him in one of my CSFI Research Fellowship roundtables, I was really looking forward to reading his new book on “Innovation and the Future-Proof Bank“. What a stroke of luck! I’d been meaning to order it as soon as my pile of business books had dwindled, when a review copy arrived from the publisher. But then I began to panic: I know James and admire his work, so how can I write a fair review? And I am violating new FTC guidelines by reviewing a book that I had been sent for free? And who would care what I think about the book anyway, since I don’t know about banking, only payments? Gulp.
In essence, James is setting out an approach built on two principles: that banks need an innovation process in order to move forward, not an innovation function, team or department, and that it’s a numbers game. Innovation isn’t about boffins toiling in underground labs waiting for the breakthrough that will change everything, it’s about a funnel of activity that needs to be constantly filled and then filtered to produce a huge amount of incremental change (more like Toyota than Barnes-Wallis). Less glamorous, but more effective.
The heart of the book, for me, is in James’ directed evolution of the well-known Shell scenario planning techniques into what he calls “futurecasting”: a shorter-term use of narrative structures to explore environmental changes and organisational responses. I was fortunate enough to be one of the experts invited to participate in the Shell process one year, and while I found it fascinating (and valuable), the quarter-century horizons and multi-year, multi-billion investment decisions that Shell is making are not typical of most organisations. In the excellent case study of P2P lending that James uses in the book, banks need 3-5 year strategies that are on a 5-10 year roadmap, so James’ approach of connecting “traditional” Delphi polling and perhaps more unusual innovation market approaches into longer-term narratives seems practical and effective.
For corporate practitioners I suspect that the most immediately beneficial part of the book concerns filling that funnel and then working out how to filter and progress the ideas that get over the hurdles. I am not qualified to judge the scoring approach that James sets out but it seems perfectly reasonable to me, and I did agree strongly with his comments about pilots and prototyping being used to learn more than simply whether the technology works.
If there is an area where the book might be developed further for a future edition it is towards the end, where the discussion about budgeting and allocating the costs of innovation (and its rewards) across business units seemed inconclusive. I’m at a loss to imagine what a more scientific approach to this topic might yield, but for typical practitioners in typical financial services organisations, accounting remains a great barrier to real-world innovation and that must be overcome at some point, perhaps by developing a grammar of innovation to connect the disciplines.
One final point: while the book is aimed at the banking sector, I thought that the processes and techniques described were capable of delivering to a much wider corporate market: if you don’t work for a bank, you will still find this book valuable.
In the future, everyone will be famous for fifteen megabytes [posted with ecto]
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