BankZero - the start of a new banking movement?

In 1966 the architect Cedric Price said: "Technology is the answer, but what was the question?" in order to highlight the problem of jumping into tech-solution mode - no matter what the problem requires. This is what I felt around the news this week about the launch of new banking value proposition called BankZero in South Africa. This prominence would have been boosted by the fact that Michael Jordaan - Mr. "bank innovation from FNB - is amongst the founders with another senior ex FNB partner. All of the current media reporting focuses on the fact that this bank will be "digital", "branchless" and "app-driven" - ignoring the real business model innovation driver contained in their press release: "Bank Zero will make use of a mutual bank licence. The mutual banking concept mirrors current social media trends and benefits customers by allowing for the support and creation of financial communities. It also provides for a capital-efficient framework, and Bank Zero will be sharing the subsequent cost benefits with its customers (both businesses and individuals)."

This launch of BankZero is part of a much bigger global trend to deviate from the current largely exploitative banking business model and create institutions that are owned by their customers - see here for an overview of different models. As previously mentioned this very relevant in our African context where many customers come from a "stokvel" group banking tradition that does not know exorbitant fees and interest rates - and also cares very little about black credit cards and VIP lounge access . Globally we have had some interesting start-ups like Fidor Bank in Germany where customer-owners jointly decide on fair lending rates. In our case we are tapping into the COOP Banking model that is also making a come-back all over the world - see here for UK perspective. One of the really great benchmarks is RaboBank from the Netherlands - see more about them here and also here.

As you will see when digging deeper into this trend its again not about the technology - which is an enabler - but a much more human insight about the types of organiations people across the world want to engage with and be part of that is the real driver behind this innovation. There is some good reading available from ReD Associates here and here.

We are keen to connect with anyone that shares our vision - so feel free to reach out,.

Re-Designing the C-Suite with Creative Leadership?

It was quite big news to us in the design leadership space when Ford announced Jim Hackett would be the new CEO in mid 2017. As a business designer Jim has a long history in the creative space and close alliance with IDEO during his many years at furniture maker Steelcase - a recent article even mentions him having a permanent webcam link with David Kelley to be able to discuss any issue that arises. But also outside of the motor industry - which has always seen the business value of design - it seems designers are getting their shot at C-Suite influence.

But it seems that the US and parts of Europe are still ahead of the curve here. In South Africa the majority of senior leadership roles are still filled with lawyers or accountants - hardly disciplines that are known to drive empathetic, creative and future-focused thinking. But there seems to be a business case for giving designers a seat at the executive table. The Design Management Institute has been tracking the Value of Design with their Design Value Index and you can find some useful data to support this from their research into design as a driver for business performance. Also the friends at McKinsey - we have looked at their industry's appetite for design skills before - have looked a the bottom line impact of creative thinking.

One way to test this in large organisations is by maybe trying the Chief Design Officer route and hiring a senior creative leader to apply this thinking to your C-Suite discussions. According to the UK Design Council a CDO this will have some immediate impact on rewiring a business to be more customer centric and provide a richer narrative to large investment decisions. These are some of the attributes that one should look for:
1. Versatility / Employ a designer who has worked across a number of design disciplines.
2. Strategic mindset / Their track record should include designing systems, processes and experiences as well as objects.
3. Agency background / The senior talent pool of the design-led agencies is a great place to find candidates.
4. Cultural fit / Hire someone who will get along with the rest of the senior team.
5. A storyteller / Convincing the business that design has legs in a corporate world can require a lot of learning by doing – the CDO needs to be able to take people through meaningful and powerful experiences that change their perceptions.

But this change requires a long-term, patient view as Hans Neubert from FrogDesign mentions: "When companies view design as a catalyst to innovation, they do not judge design on aesthetics alone, but on value creation, problem solving, sustainability and process innovation as well. They will put their customers at the nucleus of a human-centred design approach. This might require reframing and restructuring the company, which can take years to implement."

There are some interesting case studies how corporates are starting to implement this design-centric mindset across their organiations - like this one from Deutsche Telekom - and we are keen to showcase some more of these journeys.

Media Innovation - jumping before it's too late

Today's post is dedicated to an industry that we are actively pursuing with one of our own ventures - media. For all the evidence that your own demise should create a sense of urgency to innovate, this industry has been surprisingly slow to change at the business model level. Which is the key area for innovation if media is going to thrive and prosper, but it seems most current executives still want to squeeze as much as possible out of the old advertising funded model - even trying to fight the likes of Google and Facebook for a share of the pie. This takes their eyes off the major assets they could leverage in a time when high-quality content and "fake news" are king - and people will pay for this ever scarcer commodity.

The first big shift that enabled the tech companies to play in their space was the shift towards digital media interfaces - which also created a weird rift inside many major media outlets as the "leaked" New York Times Innovation Report shows. Instead of using this change as an opportunity to move beyond the advertising funded business model, it created a situation where the new digital units stayed the always unprofitable family members that never get a proper seat at the table of "real" journalism. Slowly this is shifting and there are some rather interesting partnerships developing between tech companies and media houses like "Upday" between Samsung and Axel Springer that pre-loads smartphones with aggregated, daily news content. Axel Springer has put some of their top journalistic talent into this venture and it seems t be going well.

There are some key requirements to thrive in this new era for media - one being a radical focus on media audiences and their needs - and this is where we believe design thinking can prove to be helpful. IDEO and others been used by different media houses over the last few years to stimulate a more user-centric innovation conversation and we have even had some attempts at creating Personas based on ethnographic research - instead of the typical low fidelity audience profiles created by the banner sales department. But to start creating content value propositions around deeper audience insights also requires that we liberate content from any pre-defined platforms or formats. This allows media houses to then start content distribution partnerships with anyone that has access to large audience e.g. mobile phone companies - with a revenue sharing business model. Another interesting experiment is Blendle which allows you to create your own media bouquet with a pay-per view business model.

The other innovation opportunity is to leverage the power of storytelling and disrupt the creative agency space. This is starting to happen with some positive commercial impact in most major players like the New York Times or the Guardian  - with separate teams and structures to not compromise the journalistic integrity of the "mothership" but transfer brand equity in subtle ways. In learning from the music industry another avenue for growth will be "Live Events" space - with all the thought leadership, high profile networking, content creation & distribution benefits associated with it. And also going into Education can prove to be very successful as the recent forays by Bertelsmann and other show.

As we can see there are ways to win outside of the advertising business model and we hope to see more media companies make the jump this year.

Are Banks really too big to fail?

Last week the team at Gemic published a very interesting white paper entitled: "We don’t need more credit. We need credit to be more." which referenced some of their recent work with so-called Millennials in the US and Europe. As we know from the likes of a "Occupy Wall Street" movement, this generation is opposed to many current exploitative shareholder value maximisation practices of "Casino Capitalism" - see also here for a very good project run by Claro Partners & Anthemis called "Always in Beta" that explores the future of banking from this emerging customer perspective. A key growth mechanism in the banking game is the role of credit - mostly supplied for instant gratification in the form of a credit card. It seems the tide is turning with younger consumers seeing the credit card as the embodiment of everything that is wrong with banking at the moment. Banks are not seen as partners that want to enable financial freedom and fitness but would rather stick to the "debt drug addict" model - give me just enough of a credit fix to survive without dying of an overdose so I can pay my monthly fees.

Debt is seen as a big dark hole that needs to be avoided at all cost - which is where the story gets interesting from an African perspective. In our extensive work with financial inclusion on the continent we also see this fear of debt informing the often negative perception of traditional banks. What is interesting to note is that these are people that often have very little or no exposure to traditional financial services - so they respond purely from a common sense perspective to the banking value proposition. The other parallel is that banks are not that important in people's lives anymore - we don't wake up every morning and think of our bank. They are a necessary component to participate in everyday economic activities - effectively a commoditised, low value transactional role that can also be fulfilled by any other institution like mobile phone companies as in the case of MPESA or chat services like WeChat that are growing fast. From a customers perspective it's quite simple - either banks keep your money safe to invest or they lend you money - but banks have made their business artificially complex beyond these core functions. This has opened the door for non-traditional competitors like WeChat mentioned above or N26 - and hopefully soon Bettr in South Africa that are simplifying our financial lives by transparency. Also see this post that explores the value of simplicity as a crucial success factor for banks in future in more detail.

The other vulnerability for banks will come from another key driver of financial services needs  that is informed by wanting to save for long-term goals instead of the instant joy of bad debt that most banks ride on. This opens up the door for insurance companies that also want to play a more relevant everyday role in people's lives and are more credible in driving prudent, responsible behaviour based on financial planning. Some of them are getting banking licenses  and will give banks a further run for their money and build some tools for financial savvy that make people ever more immune to the debt story.

But the real financial services innovation - in both the developed and emerging markets - will come from creating alternative institutions that are less exploitative and more equitable in their make-up. Africa could lead the way in this development given that the likes of crowdfunding, peer-to-peer lending, Coop Banking were invented here. This will be powered by alternative credit scoring models, branchless service delivery and new business models, so we invite the millennials of the world to come to Africa and co-create the Bank of the Future with us.

What is New Venture Design?

Today's post is focused on the core value proposition of LeftFieldLab - New Venture Design. This practice was popularised by the likes of IDEO and others, so you can find some more reading here. It's still early days for these kinds of offerings in Africa, but I think many of us in the local innovation game have seen this movie and can relate: you go on an inspiring innovation journey and come up with some really disruptive new concepts - only to realise that you have been to a different planet than your colleagues back home and the new ideas die a slow "death by committee". This has many reasons as any real innovation radically challenges the status quo, key assumptions and established business playbooks - which might also mean that someones job is on the line. Also we have often seen that an innovation business case sometimes needs to compete for funding with very established offerings - not easy to get the "green light" for innovation in most cases under theses circumstances. The final problems is the that the risks associated with innovation are also too much too handle - even though sometimes the risk of not doing anything to change the status quo is the greatest risk of all.

This leads to a situation where we see that most innovation projects don't see the light of day and many great ideas get watered down as they move through the bureaucratic system. One way to counter this is to run innovation projects as under-the-radar "skunkworks" - with some senior aircover needed though. The other problem is that people don't fall in love with PowerPoint decks and as we know: the desk is a dangerous place and often the voice of the customer does not drive decision-making. Our solution is to take innovation outside of the corporate machine into a less risky "sandbox" experimentation environment. This means taking concepts a step further so they can demonstrate more impact and realise their potential by running them as real-life experiments in order to provide a proof of concept layer to a prototype. This model is also used by the likes of BCG Digital Ventures - see here for details of what they are working on and here for a great model of what happens locally.

Another good resource to start you off and which is more suited to our African Venture Design context is this site by John Collery from IDEO.org - see here.

There is also a nice online course offered by Ethan Imboden from FrogDesign - see here for details.

Please get in touch if you want to find out more and are keen to give this model of innovation a try.

"Zoo's vs. Jungles" - where to find the "real" sources of innnovation

Today's reflection focuses on 2 key phases of any innovation journey that have become core practices for us over the years: Listening and Learning. These are also the most messy, time-intensive and often seemingly unstructured parts of any engagement - which is why many organisations just skip them or fast-forward them as much as possible. We often hear about the importance of "falling in love with problems" or staying out of "solution-mode" for as long as possible, so it's been rather surprising to note how much time pressure is applied to corporate innovation efforts - often caused by an unclear innovation mandate or lack of buy-in from senior leadership, so that the innovation team keeps on having to prove a business case for innovation.

This often means that many so-called innovation initiatives are underpinned by quite weak and backward-looking market or customer insights. We prefer to spend as much time as possible in the "listening" and "learning" mode before jumping into action, so prefer to use more exploratory research methods instead of confirmatory ones like focus groups, questionnaires or user acceptance testing. This is even more important when looking at any issue involving solutions for a complex, future market environment - see here for some inspiration.

In research we use the metaphor: if you want to learn how the lion hunts, go tho the jungle not the zoo. In order to understand how your organisation and it's offerings can add value to and fit into peoples complex lives to solve a real problem, you need to spend as much time as possible with them in their natural habitat - using a variety of ethnographic research methods that will generate sufficient rich, "thick" data to bring back into a co-creation environment for further analysis and reflection. This is especially true in an environment where we are confronted with lots of "thin" or big data, so we know exactly "what" people are doing at any given moment, but still lack an understanding of the "why" behind their behaviour - which no questionnaire will ever tell us.

This also means that you need to build or partner with a next-generation research practice - see here for some good foundational thinking. There is also some really good reading about how deeper people insights can spark real innovation e.g. "The Moment of Clarity" and "Sensemaking" by the people at ReD Associates.

Exploring the "life after death" for Design Thinking

One of the LinkedIn posts I came across today titled "DESIGN THINKING – Drowned, mutilated and murdered" very much echoed some of my current sentiments around the topic. Somehow this had to happen: after making it onto the HarvardBusinessReview cover late in 2015, Design Thinking entered the management methodology hype cycle and was suddenly part of the everyday corporate strategy and innovation vocabulary - with those that hadn't tried their hand at it having some real FOMO. Then the inevitable happened as the traditional management consultants became interested and started making massive investments into acquiring design thinking skills - this M&A feeding frenzy spilling over into corporates (mostly software firms and large banks) as documented by John Maeda in his annual report.

This meant that some of the most amazing design firms were integrated and morphed into software sales organisations e.g Fjord into Accenture, DesignIt into WIPRO, FrogDesign into Aricent etc. Much credit is due to IDEO that was hunted down by some big players and rather chose to enter into a creative collective called "kyu" to retain some level of independence. This has created the situation that many independent design thinkers find themselves in - were design thinking as a human-centered problem solving mindset is used as a software pre-sales innovation circus show. There are countless examples of typical Design Thinking workshops or "sprints" as the friends at Google like to call them that we and others have hosted over the last few years were the outcome was biased towards a software solution - and clients expected us to start building "an app" on Day 1 only to invite the users in on the final day of a "typical design sprint" to see if they like the drop-down menus. One should not underestimate the massive effort put into this deployment of a very narrow usage of Design Thinking by the likes of Deloitte, McKinsey, PWC and others - who often offer these sessions for free and also "train" large clients in Design Thinking - all premised on a large software sell at the end. This reduces Design Thinking to filling out a bunch of templates and also limits the impact the design thinking has on corporate innovation efforts - by narrowing down the innovation conversation into one dimension only: technology.

We need to come together as a community of design thinking practitioners and share applications of the broader, people-centric practice of design thinking to rescue this powerful antidote to a singularity-infused tech utopia from oblivion. We invite you to share your stories with us e.g. like this article from Gemic I recently saw.

 

The Business School of the Future?

A current FT headline about the demise of the full-time MBA caused me to come back to an earlier post that I have started writing. As we transition into the New Year I felt it apt to dwell on one of our core practices that encourages deep reflection - learning. Last year I finally visited the Rotman School of Management in Toronto – to date still one of the few business schools that takes a creative approach to executive education and which has created the discipline of Business Design. Roger Martin famously coined the phrase that Business Leaders should not merely think like designers but actually become designers e.g. in mastering the art of integrative thinking. In our work we often see the value of using a "business designers" mindset – beyond the creative methods of design thinking that have become better known through the work of IDEO and others. Because for creative thinking to fully realise it’s business impact, it needs to become the core driver of future business strategy. A creative mindset helps to liberate us from trying to re-engineer, optimise, tweak and fiddle with our business’s growth levers to start from a designers favourite place: a clean slate. With the power having shifted firmly into the hands of the people (e.g. as consumers / users / partners), business leaders need to embrace a creative mindset that allows them to build meaningful connections with key audiences and design more relevant experiences. Last year the World Economic Forum outlined these Top 3 skills of the future: Complex Problem Solving, Critical Thinking and Creativity.

This challenges established practices of management education and leadership development. With one of our clients we are currently trying to understand what the "Business School of the Future" could and should look like. As we started unpacking this theme with various internal and external stakeholders - as well as subject matter experts - we discovered some rather exciting experiments that are taking place in the field of executive education. With the advent of "massive" online learning offerings (MOOCs) from most top schools - we can now all take a course at Harvard -  one of the key trends is creating a more immersive, contextual, rich and transformational learning experience. Some of the local and global examples that we found inspirational in this context are The Camp in France (click here) or The Field Institute in Cape Town (click here) - as well as the Kaospilot School in Denmark (click here). We have started a partnership with latter institution and hope to bring some of their executive courses to South Africa next year - please see the "Events" section for more information.

Please also get in touch if there are learning journeys that you are keen to create in order to build an advanced innovation capability into your organisation.

 

 

 

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Making Business More Beautiful

Today I would like to pay hommage to a community of like-minded thinkers that provided some key moments of inspiration for starting the LeftFieldLab. This global movement was started by a guy called Tim Leberecht (read his book and blogs) who also studied something quite "left-field" with me in Germany; although we sadly never met at University. Tim then went on a deep dive into the underbelly of Silicon Valley to understand the inner workings of the "Tech Industry" to shape his latest start-up called "Humanity". In reference to an era that faced similar challenges to ours, they call themselves "Business Romantics" and many of the positions they hold resonate with my current beliefs about the future of business as well:

  1. We thrive in the tension between profit and meaning.
  2. We trust that by creating a more human experience of work, we will create growth and find opportunity.
  3. We respect cycles of life and honor the disruptions to those cycles.
  4. We pay attention to culture and context.
  5. We value service and sacrifice from passion rather than from enforced policy.
  6. We are curious and questioning.
  7. We pay attention to the intangibles.
  8. We value flexibility in how, when, and for what compensation we work.
  9. We are resilient.
  10. We are biological, natural creatures, not machines.
  11. We are thick, dense, and inefficient
  12. We shift from the rational to the intuitive
  13. We work with purpose and strive for significance.
  14. Our work is transformational for the people involved, not just about getting bigger.
  15. We look for new frames.
  16. We believe that the most beautiful route brings more value than the most direct route, and that we will find productivity through obliquity.

(also see the web for more detail on the WorkFuturesManifesto above)

One of the signature events is the "House of Beautiful Business" and in 2018 we will try and build a local community rooted in this spirit and hopefully also host an event of this type in Cape Town. This link gives a good summary of what happened recently during the Web Summit in Lisbon.

Please also see here for more information:
The Business Romantic Society
House of Beautiful Business
15 Toasts to Humanity

 

Why this now? Being the 10th Man

This is my first post, so allow me to share some of the thinking that got me to this point. A while back I did some reading about a concept that is prevalent in jewish culture – the 10th man (or woman) principle . This principle comes from the Yom Kippur War and more than the better known devils advocate it’s designed to institutionalise contrarian thinking.

Having been part of the innovation management community for many years now, this mindset immediately resonated with me, as I have come to realise that we are at war – facing  a powerful adversary that seeks to limit our conversations around innovation and new ways of working into one dimension only: technology.

To me a certain “luddite” approach to “software eating the world” is a much needed alternative voice that seeks to balance current innovation narratives and experiments with a more holistic view of innovation – one that is driven by people, enabled by technology and activated by new business models. This approach is neatly captured by the three core dimensions of design thinking: Desirability, Feasibility and Viability – which provide the foundation for our operating model.

LeftFieldLab is an alternative “sandbox” environment that links up DesignThinking with other emerging leadership disciplines to drive a people-centric innovation agenda.

We invite you to join us on this journey.

I have put together this basic site to outline the value proposition - more content will follow.