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Innovation has to be driven top-down

I did a webinar on innovation yesterday.

It's a one-hour session, which you're welcome to watch if you have the time:


Alternatively or, in addition, here are the slides I presented if you want a quick view of the info provided.

As you will see, there are case studies of firms ranging from USAA to Bank of America, Barclays to First Direct, PayPal to Square and more.

The whole thing is also summarised in a white paper soon to be released, which I will also share when it is online.


One of the points I made regularly throughout the presentation is that you need commitment from the most senior person in the organisation if you are to make innovation happen.

This is something that some folks disagree with, particularly in Asia where collective decision making is the culture, so I will say that different cultures will see innovation differently but, in every firm I’ve worked with, innovation only succeeds if the person with the responsibility for the business has their balls or bra on the line.

I can illustrate this well through the years, but here’s my personal take on why senior management commitment is so important.

Most people who become CEO’s of businesses get there by working up the organisation.

They become CEO by playing within the organisations rules.

They know that, as CEO, they’re going to have a limited time at the top so they want to make a difference by increasing revenues and margins, delivering shareholder value, achieving financial objectives.

They’re never going to get that by breaking the rules, disrupting the organisation, shifting its focus into new markets and cannibalising their existing business.

That’s why most innovation occurs as a result of a change of management or a fresh start-up, but not from an incumbent with a culture of avoiding innovation.

I well remember dealing with one insurance company who wanted to innovate.

We came up with a transformation program, but it was switched off by the CEO.

The CEO said that it was too radical and, as he knew he only had 18 months at the top before retirement, he wanted an incremental improvement of around five percent, not something so radical that it might change the industry..

In another instance,  I worked with a bank on a transformation program.  We determined that there were two areas that could be re-engineered: the mortgage process or the money transmissions process. 

The mortgage process would give the most radical results, but we went for money transmissions as the latter resided in one function and was more manageable.  The mortgage process would affect four or five lines of business and was too radical.

There are many examples of programs of transformation that financial firms have discussed and the majority pull back from the brink of radical reform because the passion is not there from the top of the organisation down.

And you can only destroy sacred  cows in business by having someone at the top who can swing the axe.

That is why most innovation fails if there is not a total passion and commitment from the top-down.





About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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