NEW YORK–Credit unions here were offered four lenses through which to look to sharpen their focus on innovation and digital transformation.
Rowan Gibson, an innovation expert and president of Innovation Bridge, as well as co-founder of InnovationExcellence.com, said credit unions aren’t alone, and that in his work he has found the one thing that keeps companies awake at night is the threat of digital disruption.
Gibson defines digital disruption as “the discontinuous change that occurs when new digital technologies and business models displace the value proposition of existing goods and services.”
With digital disruption, a threat to every company, said Gibson, the obvious question is, “What are we going to do about it?”
“The only insurance policy we have against digital disruption is digital transformation,” said Gibson. “But when I talk to companies about this the reaction is usually a knee-jerk reaction to get more technology and more data.”
Gibson said companies can learn from the tragedy of the Sept. 11, 2001 terrorist attacks. The 911 Commission report said the attacks were able to take place for three primary reasons”
- Failure to seamlessly integrate the data of various government agencies
- Failure to discover critical insights by joining the dots between the data
- Above all, failure of imagination
“How do we unleash imagination across our organizations? How can we drive not just digital transformation but digital innovation? Everyone is doing the same thing, so how do we get ahead?” asked Gibson, whose book, “The Four Lenses of Innovation,” looked to the minds of innovators for answers. “What I discovered was that if you can discover the thinking processes that innovators use, then there is the possibility to reverse-engineer them and turn them into a set of tools and a methodology that will enable all of us to think like Steve Jobs or Jeff Bezos or Leonardo da Vinci.”
The four lenses, according to Gibson, are:
Challenging Orthodoxies
“This is about challenging conventional wisdom and the status quo,” he said. “These are the deeply held and broadly shared conventions about how things are supposed to be done in our industry. We’ve got to unleash our imaginations. We’ve got to imagine a time when those cards and those ATMs are going to disappear. A lot of the change occurring in financial services weren’t imagined by banks and financial institutions.”
Gibson shared the quote by Dee Hock that, “The problem isn’t getting new ideas in your mind; it’s getting the old ideas out.”
“This is why the newcomers always present the biggest threat,” said Gibson. “What if you challenge your assumptions? List them, and then reverse them.”
Harnessing Trends
This is not about having a crystal ball, but instead having a wider lens and asking how to harness power of change to bring into our business model, said Gibson.
“In financial services, it used to be you would wait until someone was 18 and need a car loan. Now, if we move to ‘auto as a service,’ you’re not going to own it or even rent it, you are just going to use it when you need it.”
One challenge in harnessing trends, said Gibson, was captured in a study by Microsoft that found 46% of business decision-makers think their senior leaders are unwilling to disrupt their model and challenge what they have always done.
“Innovators are wave riders,” he said. “They welcome change rather than trying to resist it. They have learned how to make change work for them rather than against them. Are you riding these waves of change, or are you sitting on the beach waiting for the tsunami to hit you?”
Levering Resources
Gibson noted that if Facebook, with its two-billion users, were to enter financial services, if just 10% of its users became clients, it launches with 200-milion customers immediately.
“So, ask yourself what core competencies could we transfer to new opportunities? You need to be asking this on a daily basis. This is about the shift from the old to the new,” he said.
Understanding Needs
This is the “holy grail,” according to Gibson, who said it’s about getting under the skin of the customer and understanding the changing needs of customer demands, and then designing solutions from the customer backward.
Gibson said understanding needs can best be summed up by an advertisement once run by IBM: “Stop selling what you have, start thinking what they have.”
“It’s not how do we deploy this new technology, it’s how do we meet a need?” he said. “Digital innovation isn’t about gadgets, it’s about improving human experiences.”
He said credit union leaders need to become “solutionaries.”
“We need to find ways to apply those lenses to our business models, who we sell to, how we differentiate, how we make money, and who we serve. It’s not about leaving it to chance.”
Gibson called on credit unions to train their employees to see challenges through these lenses and to look to create innovation centers within their own offices.
“What it’s all about is making digital innovation less serendipitous and more systematic. We want to put the conditions in place so that luck happens more often. Turning digital innovation into an enterprise capability requires leadership and structure, processes and tools, people and skills, and culture and values.”