It takes more than a Covid-19 crisis to become innovative

Innovation comes in many shapes and forms but rarely at speed. Right now, as businesses and workers respond to Covid-19 disruptions, we are seeing businesses pivot and working practices change drastically.

In our podcast on innovation, our speaker Dmitry Bagrov stated that although there is a perception that during Covid-19 there has been a waterfall of innovation, we are mistaken. Instead, what we are witnessing is the rapid adoption and acceptance of technology which already existed pre Covid-19. So right now, there has been little visible innovation.

While insightful this might not give the credit due to the many FinTech, RegTech and other available technologies which have carried us through this difficult time in our industry. It is still a wakeup call about our perceptions. The adoption and implementation of FinTech, RegTech in the Asset and Wealth Management companies puts them in the position of followers instead of initiators.

Industry innovation – what’s the deal?

The “Innovation Garage” has been widely used in the past 5 to 10 years in the Asset and Wealth Management industry as the place to work on trends and develop technologies of the future. Employees from all company areas and levels have come together on an equal footing and form interdisciplinary teams. Young trainees work hand-in-hand with experienced staff members.

The idea of the Innovation Garage is to move away from the traditional approach to research and development and instead offer employees a platform away from their day-to-day duties to try out new things and put them into practice quickly. Focused on the really pressing issues of our time, this aims to generate new concepts, solutions and products from the collective know-how available.

There has been considerable success with this approach especially in the more engineering and digitally focussed industries, and some of the current giants are based on the “garage” innovation (Apple, Amazon, Facebook.). The Asset and Wealth management industry has however not seen a wave of new technologies, products, processes or operating models coming out of their own garages.

The question therefore is how they can become innovative so that it goes beyond the buzz word and they become more the inventors than the adopters.

Innovation mindset

Agent provocateur and author, Nigel Barlow^[1] moves away from the “innovative garage” as a separate unit of the company, evolving it into “Garage thinking” which is a way of thinking throughout organisations to ‘accelerate innovation, unrestricted by the demands of short-termism, bureaucracy and limiting silos’.

He also acknowledges that the “the everyday, bread and butter processes needs to run better, faster and cheaper where at the same time the company needs to scan for or instigate the next wave of disruption” (Bi-modal thinking).

In his view the traditional improvements – doing it better – can be accomplished through more formal, keenly focussed methods. However, the innovative, game-changing leaps – thinking differently – grow in a different kind of soil

Innovation essentials

There is no a simple shortcut to achieving the garage thinking with the consequence of becoming an innovative company. Another thinker in this field, Jeffrey Baumgartner, author of The Way of the Innovation Master; defines the “Essential Characteristics of Innovative Companies”^[2] as these seven traits:

1. A unique and relevant strategy
2. Innovation being a means to achieve strategic goals
3. Innovators are leaders
4. Innovators implement
5. Failure is an option
6. An environment of trust
7. Autonomy

Clearly it does not stop by creating the characteristics of the company, but they are a fertile ground for the behaviours which are needed to become an innovative company. These might be but are not limited to:

1. Experimenting – going beyond the obvious and piloting new ideas
2. Questioning – having a strong innate sense of curiosity
3. Observing – taking in the world around you and look for acute insights
4. Connecting & Networking – finding radically different views & opinions and new ideas
5. Focussing on the customer – bringing new value to their needs, how to improve a service, product, process
6. Collaborating – looking for ideas inside and out and share knowledge and perspectives
7. Implementing and sense of urgency – being agile from idea to bringing to market

Innovation behaviour

Innovation involves change and many people are not comfortable with this, especially right now where job security, career uncertainty and a precarious world view are underpinning our daily outlooks. Much of our change in working practices has been forced upon us at speed so now is a good time to begin reflecting and planning for the next stage. Coaching, mentoring, consultancy, creative project management and inspirational speaking are all very powerful tools that can be used to develop the necessary changes in attitudes and behaviour which will help to nurture innovation.

And if the challenge is not already big enough to achieve being an innovative company you equally have to think about

1. Tone from the top with leaders actively supporting innovation and employees at all levels see or hear about it
2. Availability of resources and time
3. Embedding innovation as a consistent, explicit element of performance reviews
4. Incorporating innovation, creativity and curiosity into core values in word and in deed
5. Rewarding people for learning from failure and allow to fail frequently

Innovation team

Everyone plays an essential role in innovation. Therefore, the team should represent all parts of the business and changes over time; “You have to think of people as units of Innovation, not units of production”^[3].  Participants should not become too cosy and comfortable – they want to innovate their exit from these confined quarters as urgently as possible!

The road to become innovative takes more than a Covid-19 crisis and we should not forget that it will be messy, wasteful, failure prone, risky, and will create short-term inefficiency.

Equally it could provide you with a company that thinks beyond asset and wealth management, adopts a ‘Possibility Mindset’, reaches fresh and new markets, re-invents itself and becomes more assertive in selling its true value.

[1] Garage thinking, Nigel Barlow, November 2016

[2] Jeffrey Baumgartner 2012

[3] Dr Mahindra, CEO of Mahindra Industries