Innovating in a Changing
Banking Industry
Day 3:
Innovation 101
JP Nicols
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JP Nicols
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This Changes
Doesn’t It???
Everything!
JP Nicols
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INNOVATION
is more than the next big idea
JP Nicols
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The Hype Curve
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Technology Adoption Curve
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Accenture, 2013
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Challenges for customer-centric experience
Accenture, 2013
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Digital ways to offer advice
A.T. Kearney, 2013
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Moven’s focus on disrupting the business model
Sources: Moven, Accenture, 2013
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“The Discipline of Market Leaders”
Michael Treacy and Fred Wiersema, 1995
Customer
Intimacy
“Unbundling the Corporation”
Harvard Business Review– John
Hagel and Marc Singer, 1999
Customer
Relationship
Management
Infrastructure
Management
Product
Innovation
Product
Leadership
Operational
Excellence
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“Unbundling the Corporation”
Harvard Business Review– John
Hagel and Marc Singer, 1999
Customer
Relationship
Management
Infrastructure
Management
JP Nicols
Product
Innovation
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Customer
Relationship
Management
Infrastructure
Management
Early Market entry
enables premium
prices and acquiring
large market share;
speed is key.
High cost of customer
acquisition makes it
imperative to gain
large wallet share;
economies of scope
are key.
High fixed costs
make large volumes
essential to achieve
low unit costs;
economies of scale
are key.
Battle for talent; low
barriers to entry;
many small players
thrive
Battle for scope; rapid
consolidation; a few
big players dominate
Battle for scale; rapid
consolidation; a few
big players dominate
Employee centered;
coddling the creative
stars
Highly service
Cost focused;
oriented; customerstresses
comes- firsts mentality standardization,
predictability, and
efficiency
Product
Innovation
Economics
Competition
Culture
Hagel and Singer, 1999
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Diagnosis
Low Touch
Intimacy/EQ
Touch
High
Execution
Standardized
Process
Specialized
Adapted from True Professionalism by David H. Maister
© 1997 David H. Maister, used by permission
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Execution
Diagnosis
• Goal Setting
• Financial Planning
• Nonfinancial
Issues
• Moral Support
Low Touch
Intimacy/EQ
Touch
High
• Standard Credit
Artificial
• Product Advice
Intelligence
• Onboarding
• Estates Learning
Machine
• Complex Issues
Data
Aggregation
• Retail
• Small Business
• Basic Service
• Statements
• Std. products
• Transactions
• Item processing
• Payments
Technology
• Custom Credit
• Asset Mgmt
• Trust Admin
Data
Analytics
• Corp Banking
Business
• ABL
• Syndications
Intelligence
Data Aggregation
Standardized
Process
Specialized
Adapted from True Professionalism by David H. Maister
© 1997 David H. Maister, used by permission
JP Nicols
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Maturity Life Cycle
Emerging
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Growth
Mature
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Declining
Death
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Product Portfolio
Escape Velocity, Geoffrey Moore, 2011
Material
Current
Financials
Not
Material
High
Low
Growth Rate
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Three Horizons Model
Horizon 3
36-72 months
Horizon 2
12-36 months
Horizon 1
0-12 months
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Goals and Metrics: Three Horizons
Time Frame
Horizon 1
(0-12 Mos.)
Horizon 2
(12-36 Mos.)
Horizon 3
(36-72 Mos.)
Driving Goal
Maximize Economic
Returns
Become a Going
Concern
Create a Category
Key Performance
Indicators
• Revenue vs. Plan
• Bookings
• Contribution
Margin
• Market share
• Wallet share
• Target accounts
vs plan
• Sales velocity
• Deal size
• Segment share
• Time to tipping
point
• Name-brand
customers
• Deal size
• Name-brand
partners
• PR buzz
• Flagship projects
OPEX
TIMEX
CAPEX
Escape Velocity, Geoffrey Moore, 2011
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Innovation Portfolio
Renew
Disruptive Product or
Service
Radical
New Product Development
Business Model Innovation
Incremental
Disruptive Process
Small changes to existing
capabilities and offerings
Disruptive Processes and
Capabilities
Offering
Enhance
Capability
Renew
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Innovation Strategy
External Involvement
More
Less
Open Innovation
Social Based
Traditional R&D
Employee Sourced
Internal Involvement
More
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Innovation Approach
Depth of Involvement
More
Less
Leadership Driven
Social Based
Innovation Team
Employee Driven
Breadth of Involvement
More
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Innovation Frameworks
EXTERNAL
VALUE PROPOSITION
INTERNAL
Shift from IDEA
to DESIGN…
Know your
MARKET FIT
… and align NEW
with LEGACY
Do you know what SOCIAL
behavioral changes are
taking place?
Contextual landscaping and your
value statement creates…
INNOVATION FOCUS
Context
How is the ENVIRONMENT
and landscape changing
around you, and what
can you expect?
Type
And
builds
your…
Impact
INNOVATIO
N
PORTFOLIO
Develop
continued
LEARNING
Build the
transformation
ROADMAP
Understand NETWORKED
ACTIVITY in context of the
organizational structure
Identify
ARCHETYPES
Align to R&D
and venture
labs
Drive INNOVATION EXECUTION
How is innovation
approached and
adopted by others in
the MARKET?
Understand EXECUTION and
engagement strategies
RHYTHM framework development
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Innovation Frameworks
EXTERNAL
VALUE PROPOSITION
•
SOCIAL FACTORS
•
•
•
Generational Research
Social Dilemma
Behavioral Research
•
•
•
•
Experience
economy
Market fit
Focus areas
Ecogenetic
probing
Landscaping
•
•
Dominant idea to dominant
design
•
Heritage protection versus
new
Dematerialized
Value
Statement
•
•
Learning
model
•
Transformation
roadmap
Integrated
architecture
INNOVATION FOCUS
ENVIRONMENT
•
•
•
•
•
•
Strategic
paradigms
INTERNAL
Context
Wave theories
Information transformation
Future landscapes
Hype curves
Assimilation curves
Type
Impact
INNOVATION
PORTFOLIO
•
•
•
Network theory
Organizational shadow network
Social network analysis
•
Archetypal
analysis
•
Traditional
R&D and
labs
MARKET RESEARCH
•
•
•
Innovation patterns
Innovation adoption
Market adoption
•
Horizons of
execution
•
Engagement
model
•
Business
health
•
Asset
health
• Innovation rhythm
INNOVATION EXECUTION
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Lean Startup Lessons for Bankers
Build
Learn
Measure
The Lean Startup, Eric Ries, 2011
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Business Model Canvas
Skype
Maximum
Outsourcing
Software
Development
Roughly
Similar Voice
Offer
Automated
Mass
Customization
Video
Mobile
No
Infrastructure
Cost Structure of a Software
Company
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Software
Distribution
100% Low
Cost
Channels
Global
Reach
Without
Limitations Of
A Network
90% Free Usage
10% Paying
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