Jeff Judy

Jeff's Thoughts - March 23, 2016

The Six C's of Innovation

 

I recently participated in an ICBA "Leader Summit " where we discussed a wide range of issues facing the financial services industry. One topic that got a lot of play was the need for innovation, and some of the factors that seem to be holding innovation back.

That brings me to the first C of innovation: Challenging. This is not the environment of several years ago, when innovation was plentiful. Some would say, too plentiful, as credit and investment products proliferated, many of them almost impossible to understand. "Innovative" standards and practices did a lot of damage.

The reaction from the regulators has been to establish a very Conservative environment for our industry. Institutions are nervous about taking new approaches, as they see their regulators as being in a rather inflexible mood these days.

That certainly places some Constraints on innovation. That does not make innovation impossible. The whole point of innovation is to get more out of a given situation than do your rivals, who face the same constraints. The tighter the constraints on the way you do business, the greater, not the lesser, the need for innovative thinking.

It takes some Courage. Instead of throwing in the towel and doing everything the same way everyone else does, you make a commitment to finding better ways of running your business.

One of the secrets to innovation is to take a Comprehensive view of your institution and how you do things. For too long, "innovation" has referred mainly to products and services. There are many ways to innovate that can contribute to your success. There is always room for new interactions with your community, for instance, new ways to garner attention for your institution. You can always improve how you motivate and reward employees for embracing and implementing the strategies you have chosen. There is plenty of opportunity to find new ways to interact with customers to ensure their satisfaction and loyalty.

To find these new ideas, it helps to Cultivate a variety of inputs to your strategies. For instance, how old is the youngest member of your Board of Directors? If your answer is 50, or older, perhaps that is not helping you see the needs and preferences of the millennial generation of customers.

It may be true that there is not much opportunity for innovation in some aspects of our industry. But there is plenty of room for new ideas, new ways of doing things, if you look for improvements in everything you do.

Yes, the freewheeling times are gone, and a conservative attitude has taken root, there is no doubt about it.

But the competitive advantage still falls to the innovative player.