This evening, I'll be getting on a plane to Australia. The trip is mainly personal, seeing family and friends. There's also a wedding on.
Consequently, I'll be infrequently updating this blog, until I return on the 20th of April, though I'll likely check in from time to time, especially if I am inspired by something Antipodean.
Last week, I was in a meeting and, as you do, I handed over my business card. I got what has become a very typical response: "Head of Innovation? You must have the best job in the bank!"
Whether or not I have the best job is immaterial here, of course. The real sum of this statement is the perception that innovation equals exciting.
The fact of the matter is a lot of what we do in our innovation team is rather boring. And, as the financial crisis flows around us, we're doing way less of the exciting work. I don't regret this, actually. It is the mark of decent programme, I think, that it is able to prioritise its investments in any way that makes sense considering the business climate.
And from our perspective, that means two things. We have to keep the business running, firstly, and secondly, we have to integrate our latest acquisition and release synergy benefits for shareholders.
Now, obviously, the kind of innovation you want with such priorities is quite different to that you'd generate if you were in different economic times. Today, the name of the game is short term wins, ones that don't distract you from your key objectives, and making sure you can demonstrate a return on innovation investments.
The best way to do that is focus on small, incremental things.
No innovator worth their salt gets up in the morning and imagines that today, they'll move a checkbox on a form, or investigate how to cut half a second off the queue length in the call centre. These things might not be ground-breaking, but they help pay the bills.
So, when I'm asked if I have the most exciting job in the world, my response is almost always "yes, but I try to make it as boring as possible". This usually gets me a raised eyebrow.
Whilst our bread and butter – as innovators – is the truly new, dealing with newness is a routine matter if you do it all day every day. Nothing there to get excited about. An idea arrives, it is evaluated, and it either executes or not.
What you have, when you have "the most exciting job in the world", is the complete opposite. Emotional engagement in specific initiatives. An ability to "drown the puppy" when things go wrong. And, above all, too little time to process enough stuff to get to scale.
Yesterday I got an interesting package in the mail. When I opened it, it was a book entitled "Never put confusion on top of a crisis", and the author was a James Gardner. Immediately, I thought someone had sent it to me thinking I would like a book by someone with the same name as me. As you do, I turned immediately to the bank cover to read the About the Author part:
"James Gardner has achieved industry wide recognition for transforming the way his bank engaged with its customers…. With simple changes focussing on rich user experiences and improving front and bank office productivity, Gardner led the dramatic change across his organisation. Today, the bank is still continuing to deliver strong revenue and cost savings across it service delivery, sales, compliance and IT functions – without compromising the customer experience"
Now, until this moment I hadn't realised there was another James Gardner in banking, and then on the inside cover, where it talked more about the content of the book, it mentioned my bank by name.
The penny dropped when I opened the book and found only blank pages. The book, it turns out, was a marketing gift from Adobe Systems, who were advertising their enterprise document management solutions.
Now this is a very, very clever piece of marketing. The book looks exactly like a real one, except it is targeted to me and my institution. Everyone I showed it to was sooooo impressed that I'd published a book, and spent a few moments examining it before they, too, realised it was a marketing item.
And then, even with this realisation in hand, their first question was "how can I get one too?"
Imagine that – a piece of marketing collateral that has inherent value to the recipient, as well as to the company that wants to deliver a message.
I often say that real innovators know that boring, incremental work pays the bills. But then, every so often, you see a small idea coupled with excellent execution that makes you realise that even small ideas can be very significant. The amount of time I spent examining this book – which has a table of contents outlining every significant feature of their solution – was orders of magnitude higher than I would have done on a simple brochure. In fact, the brochure would have been put in the bin immediately.
This book, however, will stay on my desk, probably indefinitely.
Here is a demonstration of the real power of innovation: it generates something unique that causes potential customers to change their behaviour.
The holy grail of innovation teams, of course, is to find a way of doing so reliably and predictably.
Last night, I had a meeting with our Microsoft account director. After we talked about the state of the industry, and the state of the bank, and the state of everything else (a rather gloomy set of musings, if I may say so), we moved swiftly to a discussion of my present position with respect to Linux. Readers are probably aware that some months ago, I'd finally lost patience with Windows, and eliminated it from everything.
Linux replaced Windows Media Centre for all the televisions at home, all our ordinary computers were converted over, and my work laptop ran Linux just perfectly.
For a while, I was in heaven. There is nothing more delightful than having a laptop go to sleep when you tell it to do so. And come back up in a few seconds, also without bother.
But, everything is not as blissful as you might imagine, even if you can make the computer work as it was designed.
You see, the fact of the matter is that no matter how hard you try, with Linux you can't do everything you can with Windows. This, mainly, comes down to the fact that some software only works on Windows and there is no available substitute.
I travel a fair amount, and one thing I rely on is iPass, which enables me to access most wifi access points around the world on the corporate account. It doesn't work on Linux.
I also need to use our Cisco VPN solution, which is barely operative on Linux.
For my television network at home, the drivers for the TV cards are less stable in Linux. Under Windows, they receive television better.
And on our home laptops, there were constant complaints because things worked differently.
With Linux, I got a lot of stability and perfect uptime. I also got a lot of inconvenience.
So now, having been reminded by my Microsoft colleague I was vocal here when I switched Microsoft out, I thought it best to 'fess up that I'm back on Microsoft.
I am still of the view that you want Linux on the server, especially for mission critical workloads, and most especially when you have to scale things out. The economics of Linux definitely beat Microsoft for those kinds of workloads. But, right now, stability and uptime are less important than convenience for me on the desktop.
Microsoft have not converted me back completely, though. I will not return to my Windows Mobile phone, giving up my iPhone. Not only is the user experience better on iPhone, but I can't find a Windows Mobile phone which takes every call perfectly 100% of the time.
Still life seems better now we are a Microsoft home again. Because at least the technology in the household isn't causing fights any more.
I've often wondered, as I sit here on my train every morning writing a blog post or doing email, whether readers find my lack of comment on the current financial situation surprising. Obviously, there are few things more important at present than the happenings in the market, yet not once have I made any substantive statement on the matter. You'd think, since I am relatively outspoken on other matters, such as the business practice of analysts, or the various antics of vendors, that I might, at least, make some effort to offer critical insight or commentary from the perspective of a bank.
I thought it might be appropriate, at this point, to clarify the reasons why I've been reticent on this subject. Obviously I have my own very strong views, and Isometimes I sit on my hands when I read what else people say in the blogosphere on this subject in order to prevent myself throwing caution aside.
But those of you who work in banks will know how very difficult it is for an employee to be seen, and heard in public. My own bank allows me very great latitude in this regard. But I doubt that would continue if I added to the public debate on various subjects presently at the fore. We are presently not at the stage where unbridled comment on sensitive matters would be seen as a positive contribution to the debate, and I doubt very many bank employees anywhere are in such a position.
That's why you don't see much comment from the few bankers who have blogs and can be traced back to their institutions.
Now, there is nothing much wrong with this. As I've said before, we are on a social media journey, all of us in the financial services industry. The kinds of openness about corporate affairs pioneered by Robert Scoble at Microsoft might be an aspirational place to get to one day, but I can assure you we are a long way from that place right now. One can't change cultures overnight. Indeed, the traditionalists in banks would be horrified to discover anyone had such aspirations at all.
The key question is whether opening up a public debate via social media at this particular difficult time from the perspective of an insider – which I have no doubt at all would be lively, interesting, and good reading – would actually be worth the risk of putting social media in banks back years or not. My own view is that it is not.
This, of course, is frustrating. I don't like the fact that I can't share what I'd like. But I also know that there will be plenty of corporate-relations type things in the future to comment on, and I am patient. I am confident that caution now provides a solid platform for other more revealing posts in the future.
In the meantime, I am interested in the experiences of others. Colin Henderson, who writes BankWatch, used to be a banker and is a source of very critical insight into the current situation. Colin – would you have been so forward were you still with your former institution?
Over at Bank of America, the Future Banking blog has lots to say about the work of the innovators there, but I'm not seeing a great deal of commentary or analysis of our market conditions at present. Jeff and Co, do you feel, as I do, that its inadvisable for bankers to get into the public arena on these subjects right now if we want to keep blogging?
About the closest I've seen anyone associated with a bank come close to commentary on this stuff is Rob Findlay at NAB in his BankChannel blog. But even he is reserved? Any comments Rob?
I think, in the end, that banks will get to complete transparency in the medium term. The current crisis may even speed that along. But in the meantime, I'm quite certain that small, careful, baby steps towards that goal are much, much better than an all out race to the finish line.
Here in London, we are experiencing the heaviest snow falls for almost 20 years. It is causing havoc everywhere. Yesterday, there was no possibility of travelling inside or outside the capital. And today, as I write this sitting in a waiting room on a station, only slightly warmer than the temperature outside where additional snow is falling, the train service I ordinarily catch has been reduced from 8 to 4 cars, and everything else is operating on a reduced timetable.
The amazing thing is that anything is working at all in a city which is simply not optimized for such extreme weather.
The point of this post, however, is to reflect on the fact that even now, whilst everything is seaming to grind to a halt, it is possible to continue the business of the bank.
Yesterday, I worked from home, thankful that I had mobile phone connections and virtual private network access into the office. Most of my staff, similarly stranded, did the same.
Some, however, were forced to go into the office anyway. They’d failed to take the right precautions to enable them to work remotely. Their alternative course was not to work at all, and surprisingly few took that option.
Working remotely in business continuity situations requires that you have prepared in advance. You need to have all your security tokens up to date and working. A fast network connection to transport your office data. And decent phone service. As well as access to all your passwords and credential data.
For those in the habit of home working, none of this presents a difficulty at all. But in a large institution, one that is just beginning to take its first steps to habitual remote workers, all this takes preparation. It needs to be practiced and debugged.
My point is that whilst most institutions have mature business continuity plans for key staff, you simply can’t expect those to work without taking some personal accountability to make sure it all operates in your personal situation. My staff that hadn’t prepared were clearly disadvantaged yesterday as we made critical decisions without their input.
And here’s something else. Although everyone has a business continuity programme, they can never be comprehensive enough to consider every single thing that needs to happen. Not every resource needed to continue work will likely have been provided in advance by some central authority. Who could plan such a thing anyway? The complexity involved is monstrous.
Taking personal accountability for business continuity means that sometimes, you’re going to have to use personal resources temporarily to make things work. I had to use my personal broadband yesterday, even though I am provided with a 3G data card by the bank.
The lucky thing, I suppose about all this is the next generation of workers, all those Gen-Yers who are just starting their careers with the bank, would never have the difficulties that some of our more experienced people had yesterday. They are permanently connected to the digital world anyway, and largely location independent.
In fact, the only reason they come to the office at all, most of the time, is their Gen-X and Traditionalist managers like to see their faces to reassure themselves that work is actually being done. An antiquated perspective on things, I suspect, but cultures do not change overnight.
From a business continuity perspective, however, Gen-Y workers represent the future. Our planning will become much less complex when we can rely on the fact that our people will be connected to us, and will be personally certain to make sure they are. Massive centralized planning for continuity will focus not on individuals, but on the vestiges of the centralized infrastructures that remain.
In this new world, business continuity is not a massive discipline that must be planned and practiced.
It is, instead, the way that everyone works ordinarily.
Last night I was on a panel at the WeBank event at Nesta in London. It was a debate on the future of peer-to-peer lending and social finance. The panellists included Giles Andrews CEO of Zopa, and we had a lively debate, me playing the role of antagonist of course. I always seem to get cast in that role, as I was saying to a few people afterwards, the token banker with an innovation job who "doesn't get it".
I always laugh, of course. Being a bank innovator is quite a different thing to being one in a start-up, or even one in a well running company with some years of history such as Zopa. In exchange for our greater access to resources, we are also subject to far more significant constraints. We have to run what I call the "Can we get it up" test: an assessment of whether we have the political capital to actually make something happen or not. The more unusual and unprecedented something is, the more political capital we need.
In a start-up, by contrast, if you want to do something, you just do it.
Anyway, I was at this panel, and both the other P2P companies (the other was as yet un-launched Kubera Money) said something very interesting: they have cordial relationships with the regulators, and expected that to continue. In other words, they were expecting fairly light touch supervision.
Now, don't forget these are outfits running on fee income. They aren't going to have any fat in their operations, and so it is probably just as well they don't have the compliance load a fully supervised bank would have.
The regulator is also very, very busy, of course, particularly now.
But I can't help but wonder what would happen if one of the big four banks here in the UK rang up the FSA to tell them that they were entering peer to peer in a substantial way.
I simply cannot imagine that a light touch supervisory regime would be the result. Perhaps they'd go even further than the U.S has already gone on this topic.
Now this brings me back to the main point I raised on the panel. P2P is either disruptive to banks or it isn't. In order to be so, it needs to serve customers we can't, at a price lower than we can, or else be more convenient or have some other operational advantage which is unattainable for banks. Credit crunch aside, I don't really see how P2P has any of those things, frankly.
As Giles said yesterday at the panel, though, "we are absolutely going after share from the big banks". So these are not new customers going to P2P, then.
So rather than a disruptive, under the radar insinuation into the business which P2P might win, what we have here is a long drawn out competitive battle for share. That's a pity, in my view.
If they grow too big, banks will respond. The response will trigger a regulatory avalanche which banks are already set up to manage, but smaller P2P companies aren't.
And during all of this, they'll be engaged in a ruinous price war with bankers on fees and other charges. Costs going up, but revenue going down.
Not a pretty picture.
This year, I am going to try to stick to one of my New Year's resolutions: to post here every other day at least, and to respond to comments much more regularly that I have been. As someone who's been blogging for years, I know the basics as well as everyone else. If you participate in the conversation, you get much more out of the blogosphere than otherwise.
But this presents an interesting dilemma, because participation in social media conversations results in exponentially increasing demands on one's time. If I respond to every comment here, and many of the comment that refer to here on blogs elsewhere, I'll be spending a lot of time doing nothing but commenting. Then, of course, I want to comment on other's people's posts, and these are conversations I'll want to track as well, so I can continue to contribute.
I also write a private blog for my staff internally, and I do an update for a circular that goes out to all the people in our programme every week.
On top of that, there's the flow of private emails that arrive from each and every post I write, and though it might take me a week or two, I try to respond to all those as well. Forgive me, by the way if you've written to me and not had your response. Sometimes I have to declare email bankruptcy just to keep up.
This has lead me to consider whether there might be declining marginal returns on my time the more I participate in social media. Might it be the case that the more you do, the less you get out of it?
This is counter to what most commentators are saying about social media, of course. But most of their arguments seem to assume the point of social media is social media. In their world, time is a utopian free resource: it is a public good that is in infinite supply. They can afford to spend all their free time being on blogs and friendfeed and twitter and all the rest.
I doubt that is true for those people who don't "get" social media though. They, like me, are severely time constrained. Every task one undertakes has to be balanced against the opportunity cost of doing something else.
The opportunity cost of doing social media tends to rise the more I do. For example, I could do so much commenting on blogs that I am no longer doing what I am paid to do by my bank. That will result in me losing my job, of course, which is a very substantive price to pay for participation in social media.
On the other hand, the posts I write here and the comments I manage now are value additive to what I do. In fact, this blog has been one of the most rewarding things I've done. The problem is getting anyone else to quantify the value to my day job.
The basic issue is this: those of us engaged in this kind of activity in addition to our day jobs have faith that there is an economic benefit from doing so. That doesn't cut it when you have to go into your annual review and explain you've written 60 essays on a blog and written 1000 comments in 2008, because the relationship between output and value is inherently unclear.
The fact of the matter is that if it were possible to ascribe such an economic value to this kind of work, bankers the world over would have teams and teams of us doing social media full time. Because then, truly, there would not be declining marginal returns on the effort.
I doubt there is much chance of getting to a reasonable resolution to the problem. In 2009 we'll all still be living on faith that doing this adds real – as in cash – value to our enterprises. And we'll all still be trying to justify our faith to our management.
But I don't want you to think I am complaining. For banks, social media is still quite the bleeding edge. It's very exciting, as long as the edge doesn't turn into a knife.
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