I get asked often, “What can my bank do to be more innovative? I suppose that’s a fair question for someone who has a title of Chief Innovation Officer. 🙂 To me, innovation is not about technology; it often involves technology but it’s more like a state of being that any of us can inhabit, including companies. To do this though, we must shed the concept of innovation as a destination or an activity. I would propose to you that innovation is more about a set of mental muscles that lead to change in cultures, products, and processes.
In an attempt to exercise these very muscles for myself, I wanted to share a few tips that we’ve taken to heart at our bank, Quontic. And, remember, none of these tips are about the tips themselves (that’s a destination, if you will.) It’s about a state of being.
1) Embrace Discomfort. If you mean you want innovation, then you have to come to embrace the discomfort that is inextricably connected to it. It seems that the fear of discomfort is much greater than the actual work to overcome it. In other words, it’s paralyzing in our minds but there are exercises we can do to help quickly ease those anxieties. For example, we gave all of our employees a small amount of Bitcoin; the vast majority had never owned Bitcoin before. This wasn’t about the Bitcoin at all, it was to intentionally create an uncomfortable experience of a kind in which employees would have to learn to use a totally new app that asked for a lot of personal information for something they didn’t understand, by and large. Another example: Getting some of our more experienced bankers go make a video on TikTok, then show us. Do you think that’s comfortable? But once you show people it’s ok to be uncomfortable, the paralyzing fear quickly becomes vapor, and you will find energy building for innovation.
2) Identity Matters. I know this “tip” will probably get the most pushback, but I think it’s one of the most important. The words we use to categorize ourselves, ideas, companies, they matter SO MUCH. Each time we take something unique and extrapolate it to a category, the uniqueness is replaced with the connotations we have of that category. Take, for example, Quontic, which is unique with its customers, culture, employees and community, but the moment it’s labeled a “community bank,” all of what made it “Quontic” is replaced by how that person defines what a community bank is. If you want to innovate, carefully guard the words you use to describe your organization to yourself and your employees. Come up with a fun name or a new category, even. We are a Culture Bank. It’s not necessarily just about the words, it’s about helping break mental ruts and processes that inhibit innovation.
3) Mash That Shit. “There’s nothing new under the sun.” In so many ways, that idiom is true. But we also know it’s not. Some of the coolest innovation I’ve seen happened when people combined two already existing products or ideas and mashed them up into something totally new. Let me give an example. Why does someone who has done the same job the same way for years rarely come up with breakthrough innovation? Rhetorical question. But you know who may help that person see their job totally different? Another employee from a totally different division in the company. Again, if you suggest this, you will likely get pushback. (Side note: Learn to look for innocent pushback as it’s often a leading indicator you are on to something.) Have two or a few employees even shadow each other at work with the goal of coming up with 3 tips for how to do things differently. Make this a habit. And remember, it’s not actually about the 3 ideas one team member has for the other, it’s about building a mental muscle that will lead to innovation.
4) Create a Common Language. Reflect for a moment on one of the best friends you had in high school or college. Maybe reflect on a group of friends or team you were on as a kid. Are there certain words or phrases that stand out to you even now? Do you remember the nicknames? Do you remember the code words you guys had? You can’t go through life, and especially work, without relationships like these. If you are going to have a culture of innovation, then you have to trust one another: Bosses, coworkers, direct reports, all of them. You have to feel like this “crew” is special and others won’t really understand them. Remember those feelings? Feels good. This is where companies seem to FAIL to use core values well. Think about these as more Core Phrases that really define who you are and who you want to be. And then make them fun. Make them catchy and watch how quickly everyone in your organization knows them. You can stuff those other values you have—“honest, integrity, hard work,”—on a HR doc and say, “If you don’t have these, you’re out.” And then move on and build a unique language.
5) Compensate the Team. Imagine you are one of 5 direct reports that share a boss. How often in your career has the work your peer performed actually caused you to earn a bonus? On the flip side, how often do you feel like they may have cost you a bonus? Does it feel out of whack? It’s comical, in a way, when you think about the ideas of how bonuses usually work. We are supposed to work together to accomplish a common goal, whether it’s the company’s objective or our boss’s. But my bonus is about my performance. So why would anyone of us really care to help the other in a systematic way? If you want the same results every time, deploy a system. Everyone should still have goals and bonuses tied to their performance, but how can there be a meaningful shared goal with peers? So often innovation fails because it can’t get out of a silo. So, systematically break the silos down.
6) Pay for Failure. I don’t mean this how you likely expect. Innovation can deliver HUGE rewards. Look at Elon Musk. But, have you ever heard of the risk/reward spectrum? Taking practically no risk usually doesn’t bring in a massive reward. If you really want to build a culture of innovation, then you have to give your employees your risk/reward spectrum comfort. If you are going to lose your shit and yell at someone for signing a $10,000 contract that ended up being a dud, you can’t really expect your employees to come up with that $1M new product idea? Stop being a tyrant. Stop being a hypocrite. You know who you are. Develop your spectrum and share it widely. One tangible idea: For every $10,000 we spend on the status quo, we are okay with spending 10% on failure. So let’s say your bank spends $500k a year on your Core provider. Give your staff a budget of $50k to try out a Fintech.