The role of innovators in future thinking

So yesterday I wrote about the idea of machines having bank accounts. Apparently, that post was met with some surprise. James from Aqute Research said that I'd extracted the basis of a science fiction story from the original Peter Cochrane article. And Neil suggested I was waiting for the birth of Max Headroom. These are amusing remarks, and I smiled when I read them.

I admit the scenario seems far fetched on the surface. But then, so do many scenarios when you initially start to think about them. Credit Crunch seemed far-fetched a little more than a year ago during the housing boom.

There are many possibilities that have far reaching consequences and seem equally implausible, yet bankers would be highly remiss if they didn't consider things in advance.

What if the government imposes a carbon tax on data centres and the result is we can't afford our infrastructure any more?

What if peer to peer lending does take 10% share as Gartner suggested earlier this year?

What if a Telco launches an NFC based handset with full wallet capabilities and starts competing directly with banks for transaction accounts and loans?

Here is my question to bankers: who in your organisation is thinking about the future in a structured way? Who is it that is surfacing these potential realities to senior leadership so you can rehearse your decisions ahead of time?

I'll guess at the answer. No one is doing it routinely, and if they are, they will likely not be backing it up with actionable data.

But the thing is, performance of banks is quite correlated to their ability to think forward. I wrote about that here.

Actually, senior people don't have all that much time to be thinking about the future in terms of potential realities. They are running businesses worth billions. That is the focus of their attention, and rightly so. To think about the future, they need to have the information massaged, structured, and presented in chunks of appropriate size.

Who does have time to be thinking about it? Why, the innovators, of course. An innovation team that doesn't routinely scan scenarios for potential futures, isn't really doing its job. The point is not just to cause new things to happen inside the bank, but to guard it from things that might be done to it from the outside.

And, as I discovered (to my surprise, actually), when speaking with a very senior innovator from another bank here last week, we are not the only people who tell stories to help senior people think forward. Stories are just the kind of bite sized chunk that leaders need.

Try this experiment. Dream up some bank-important scenario. Create two stories, one in which the bank makes a decision, and the other in which it doesn't. Present both. Watch the mind set of leadership change as they begin to rehearse the implications through for themselves.

I have to tell you, having now spoken to a very large number of innovation teams for Innovation and the Future-proof Bank, that few organisations do this kind of work in a very structured way.  Its a pity, because it leaves a lot of opportunity on the table to make a real difference.

Comments

[Clint Swift]

Wonder whether your research has given you an idea why many FIs don't do this work in a structured way:
Don't see the usefulness
Don't have the resources
Don't know how to do it

[James Gardner]

Clint:

So far, I've come to the conclusion that all three of your reasons are valid. But the main reason is that most innovation teams are still developing their abilities to roll out innovation in a predictable way. There is little point in talking the strategic talk if noone at the top table is listening, and having a track record of predictability is the best way to get there.

[shailesh]

I don't agree . I see lot of banks in India and also FI are thinking innovatively . New models are being experimented and cross learning from other industries widely shared .