Some banks and insurers set up innovation labs. Others try to make initiatives germinate and grow outside the organisation. But what, if anything, does all this achieve? Gerrit Vos reckons that rather than just settle for ideas, you should build on any success and anchor innovation at the heart of the company.
Disruption is the buzzword
During the past few years the buzzword has been “disruption”. Fintechs and start-ups have invariably presented themselves as trailblazers, claiming it was just a matter of time until the rest of the world followed their lead. But what did we see instead? Most of them fell by the wayside. The real world, evidently, is more complicated than they thought. Take bunq, for example. The possibilities it offers are still rather limited, with only purists making use of it and its losses quite substantial. Later, it will be external financiers who will decide the outcome; there is no other way it can end. But it could all be done differently. Rather than blow their own trumpet, organisations like Adyen, Revolt and Cloudlendinginc, for example, just show what they can do. Adyen’s efforts were actually rewarded by its recent IPO.
Innovation lab? Or buy a start up?
Of course the market needs new ideas and initiatives. And it’s mostly the bigger organisations that are struggling with innovation. Confronted with their own bureaucracy, they feel the pressure to come up with new products. Some banks and insurers have actually set up innovation labs (well, perhaps a secluded room furnished with a few couches, IKEA tables and a corkboard inundated with post-its), while others have looked to hip innovation centres where creativity oozes off the walls. Another option is to simply buy a successful start-up. Why make things more difficult than they need to be?
Then there is the little problem of how to integrate innovation-lab successes or the newly acquired start-up into the business. In today’s real world I see two possibilities: the existing business is wound down, or the lab is wound down. I haven’t seen any other options. By the way, comparisons with pharmaceutical labs don’t count here, because theirs is an intrinsic part of the process. I’d even go so far as to say that for them, research and development (read innovation) is an essential part of their business model. Try emulating that as a bank or insurer!
Innovation from within the organisation
First and foremost, I think innovation must come from within the organisation, with the need to innovate firmly anchored at its heart. But that takes time, and money; otherwise you’ll find yourself fighting a losing battle. We actually experienced how this is possible first-hand recently, when a large organisation invited us to help with an internal innovation competition. All employees were asked to submit their ideas. The management then selected the best of these ideas and gave business units two months to develop them. An interesting twist was that every unit was given the idea that was farthest from its regular business. They were permitted to use external expertise, customers and even competitors. The three best ideas are currently being developed.
A culture in which ideas can flourish
Secondly, it calls for a company culture in which employees can bring their ideas to fruition. By sparring in teams, for example, involving customers and suppliers and combining innovations with existing activities. Companies like Google, Amazon and Facebook fare well in this context because their teams are given a lot of freedom and responsibility. And because they operate in the real world, they know what’s possible and what isn’t. This is a lot more practical and effective than conceiving your ideas outside the organisation. It’s also why I feel that you must bring innovation inside the organisation, where it can cause maximum disruption. By involving as many disciplines as possible. Only then will innovation become second nature throughout the company.
Gerrit also has ideas on how self-employed people can best insure themselves, namely the significant opportunities presented in blockchain. Read about his thoughts on the subject here.