Most leaders today know they need to be more innovative, but they are not often sure the best way to get started.
Generally, our answer is to start by creating a Declaration of Innovation™.
Many organizations have some sort of strategic plan. Often, this is a high-level plan for defending and extending their existing core businesses. Sometimes it embraces loftier aspirational goals about transforming the organization.
Nearly every organization also has a list of projects they hope to get done over the next 1-5 years. This list usually runs the gamut from the very pedestrian and incremental to the more ambitious and transformational. What is almost always missing is any kind of substantive connective tissue that link these lists to a broader strategic intent. This lack of connection makes even harder to prioritize all of those projects that are competing for limited funding and bandwidth.
Your Declaration of Innovation™ can bridge that gap by helping you address the necessary questions of the who, what, when, where, how, and why of your innovation program.
Who - Who should be involved in our innovation efforts? How broad should participation be? Is it a narrow group from a single business line or does it spread across the enterprise? How deep should it reach up and down the organization? Should it be driven top-down or bottom up?
What - What kinds of things should we innovate on or around? Should we focus on customer-facing activities or the back office? Do we need to reduce costs, improve experiences, protect existing revenue streams, or create new ones?
When - What kind of timeline(s) should we have for our projects? Are we looking for quick wins or for major transformation? How do we manage a portfolio to balance both short and long term goals?
Where - Where in the business and/or where in our customer base should we focus our efforts? Are there certain business lines that are being disrupted more than others? Do we want to play defense or offense?
How - What are the most effective ways to innovate, given the choices we have made? How can manage uncertainty and risk along the way?
Why - Why are we doing this anyway? What is our strategic intent? What are we trying to accomplish and how will we measure it?
The answer to these and related questions are not carved into stone to be treated as internal gospel and never raised again. Over the long run, they are fluid and situational and should be revisited periodically as a part of your strategic planning process. But in the short tun, they serve as important guideposts that provide valuable direction and boundaries to the people who are charged with actually “innovating” new solutions.
Those people need the freedom to test and learn and sometimes fail, but to do so within some established boundaries. Your Declaration of Innovation™ is an important foundation to what we call a FIRE Break™ that ensures that even the most disruptive and transformational projects won’t put the organization’s customers, capital, or compliance in harm’s way. More about FIRE Breaks™ in a future post.
________________________________________________ The corporate and executive growth programs from the Alloy Labs Institute are the industry leaders in helping financial institutions build and leverage their innovative capacity to create competitive advantage and drive growth. We have taught these principles in boardrooms and classrooms around the world, including at leading graduate schools of banking. Unleash exponential growth potential, build internal innovation capacity to "unbreak the bank", and quickly forge ideas into results. You can also learn and apply some of our industry-leading tools and frameworks and learn best practices from peers on operationalizing innovation in our open (co)Lab sessions. Both are open to non-Alloy Labs member financial institutions.
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