November 2024.
Mead Technology Solutions provides technology consulting services for the financial services industry.
As financial services natives, the mts team unparalleled understanding of the intricacies of our industry, including regulatory requirements, market trends and pressures, and customer expectations.
Innovation Success in Financial Services
4 Tips to achieve your innovation objectives.
Innovation must be purposeful.
Technological innovation is a critical imperative for the financial services industry. C-suite executives pursue it in the hopes of lowering costs, improving revenue, or attaining a competitive advantage. Technology vendors and third party service providers advertise it as a core underpinning in the design of their offerings. Internal IT staffs assess and analyze it to understand the performance, security, and resiliency impacts to core systems.
However, the definition of innovation can vary depending upon the differing perspectives of the players and the audience. Multiple meanings can lead to multiple or unclear objectives. Regardless of whether you are a key stakeholder representing the business or information technology, successful innovation is a matter of achieving a common understanding. We refer to this common understanding as “Purposeful Innovation” and it is the result of a cultural commitment across the organization where all members have a view of the innovation objectives, paths, and strategies required to achieve the stated goals
What follows is a series of observations and tips that can help add purpose to your innovation initiatives.
Organizational Innovation is not an Information Technology product.
It’s easy to assume that innovation is invented within the bowels of an organization’s technology department. This assumption results in a business that is almost always disappointed with its ability to innovate. Innovation cannot be the purview of any single department or business unit. It should be the result of a tightly managed collaboration between the key stakeholders from all of the affected business units.
Purposeful Innovation is a culture brought about by specific strategies and based on a partnership between an organization’s business leaders and technology leaders jointly collaborating to determine specific objectives and outcomes and selecting the best solutions to satisfy them at the right time. It provides business leaders with a seat in the technology decision process, and technology leaders to have a seat in the business decision process. “Having a seat” includes the ability to influence the decisions and, share in the accountability for them.
It is the job of the information technology department to deliver the innovation platform and tools. The business unit stakeholders are responsible for defining the purpose and outcomes anticipated for innovation initiatives. These groups then collaborate to define risks, strategies, tactics, time and resource requirements, and projected ROI metrics.
Not all innovation is seismic.
IIt’s easy to think about technology innovation as a process or methodology that somehow substantively changes the underlying business model. While this certainly may be the case, innovation isn’t always synonymous with disruption. The scope and scale of an innovation project is more typically driven by the “why.”
Purposeful Innovation could be a series of adjustments and “tweaks” rather than a replacement. It is more correct to judge innovation initiatives by the size of the impact on the business and intended ROI metrics.
Create a culture of change.
Innovation, regardless of its scope and scale, almost always results in changes within the organization. Most areas within a financial services operation don’t always react well to change. In a heavily regulated industry this isn’t necessarily a bad thing. What it means from an innovation perspective is that success is based on an organization’s ability to effectively manage change. Creating this culture of change is not something that should be left solely to the IT organization or tackled at the end of the project. Change management must be a top down effort that realistically communicates and manages process, procedural and business changes and expectations across the entire organization.
With innovation, comes failure.
If your organization does not have a list of innovation failures, you’re probably not really innovating. While no one wants to set out to fail, it’s important to know that innovation comes with proportionate risk. This risk can stifle an organization’s appetite for innovation. It can also be the inspiration for alternate innovations. The art is in understanding that failure is a possibility.
Putting it all together.
Purposeful Innovation is not a “one and done” prospect. It is a cyclical effort that is constantly changing and evolving. Being successful in your innovation efforts requires an organization wide commitment to innovation and change with clear understandings of the purpose and objectives of each project.
