Three simple things about innovation.

I was a keynote speaker in San Diego last week for the PSCU Senior Leadership & Member Forum. I was honoured to be following Captain Mark Kelly, NASA astronaut, onto the stage.

The conference is attended by senior executives of credit unions from throughout the US.

My keynote, built in close consultation with the client, focused on key three points related to the overall theme of innovation:

• it’s urgent that credit unions focus on innovation right now
• it’s important that as they do so, they re-evaluate the concept of what they believe innovation to be
• it’s critical that they take on a large number of experimental projects oriented towards innovative thinking, and that they do it now

Putting each of this issues into perspective explains my thinking:

Do it now: The world of financial services is faced with unprecedented change — the impact of mobile banking, the transfer of wealth to a new generation who thinks about financial management in entirely different ways, the emergence of new competitors. The list goes on and on. That’s why it important that credit unions establish a culture in which innovation is a priority, in order to keep up with and take advantage of the trends swirling around them

Reframe the concept:  Many organizations fail at innovation because they don’t really understand what it could be. For many people, they think innovation is for cool people who design cool products that change the world: call it the “Apple effect.” But for years, I’ve been reframing innovation from another perspective that helps to open up the minds of people as to its opportunity.

Innovation is a culture in which the leadership and the entire team continually challenges themselves with three questions: what can I do to run the business, grow the business, or transform the business?

There’s a good video clip that you can watch on that theme, “Rethinking Innovation”  

A few years back, I was interviewed at ProfitMagazine, and had this to say about the concept of innovation as I see it:

Profit: So Jim, one of the frustrating things that I find with the term innovation is that people often equate it with only product development.  So what’s your definition of innovation?

Jim Carroll: It’s absolutely true.  I Call it the Steve Jobs iphone innovation problem.  Everybody hears innovation, they think of the iphone, they think about iPod, they think about Apple and they think that’s all that innovation is, you know, coming up with cool products.  To me, it’s about much more.  It starts out with a fundamental presumption, it doesn’t matter what your business is or what industry you compete in, you’re going to be faced with more competition, more challenging customers, your business model is probably going to be subjected to greater changes.  You’ve got issues in terms of cost input, you probably finding your top line, your revenue line is being subject to the pressure.  You’ve got all kinds of challenges being thrown at you.  And from my perspective, innovation is coming up with a lot of unique ideas, whether it’s around your business model, whether it is around the manner by which you compete, whether it’s around your structure, whether it’s around, you know, the methods that you use to compete in your market place, whether, you know, nothing to do with your skills, I mean, it’s everything.  It’s simply, you know, taking the mindset that that my world is going to change on a continuous basis and I am going to make sure that I have a constant stream of ideas as to how I can keep up and how I can deal with those trends.

Experiment – a lot: There is so much changing the world of banking and credit unions. Technology, social networks, new competitors, the emergence of the digital wallet — you name it, and there is an absolute flood of ‘new stuff.’ World class innovators continually establish a regular series of projects by which they can build up their experience with the stuff that comes from the idea-flood. The more experience they build up, the more “experiential capital” they create. I’ve argued that going into the high velocity 21st century economy, “experiential capital” will become as critical if not more important than financial capital.

I actually spoke about the concept of “experiential capital” when I was the opening keynote speaker for the annual general meeting of the PGA of America – it’s worth a watch.  

Suffice it to say, if you rethink innovation in terms of these three basic concepts, it will help you deal with a world in which the future belongs to those who are fast!