Digital Speedboat: A Simple, Frugal, Fast way to Innovate within Fintechs
There's a reason innovation is a top priority for many companies. It's the lifeblood of progress, fostering new ideas and solutions that propel businesses forward. From dedicated innovation teams to high-profile summits, organizations are clearly celebrating the power of innovation. This emphasis fuels a culture of exploration and problem-solving.
The inherent opportunity beyond these titles, events, and processes is to make innovation an everyday affair. Make it a ubiquitous part of the enterprise’s functioning. Companies that have embraced this philosophy have gone on to deliver innovative products and services that have handsomely added to their bottom line. 3M is a posterchild for operationalizing innovation by, almost, forcing the behavior in terms of building key metrics and financial measures around this idea.
Of course, if it were easy, it would have been done. Any number of facts stand between the stark reality of the need for permissionless innovation and why companies have such a hard time doing that.
Even in organizations where innovation is an everyday affair, turning the result of the innovation into a product or service that can be used to solve a practical problem or taking it to market is usually a challenge of its own. Operationalizing the commoditization of innovation is not easy as it might sound. For one, most large organizations are like oil tankers. Large, heavy, thoughtful, and slow. Not to mention stable and secure.
Structures that fueled growth and all the encumbering actions that were necessary to go big, also make it difficult for organizations move in nimble ways. Change is slow, usually. Testing of an idea needs a lot more effort. Failing fast is not easy as pundits make it sound. An unpleasant consequence of this situation is delayed response to market conditions even when the capability exists within the organization.
Under these compelling circumstances, it is not difficult to imagine a digital speedboat that is capable of maneuvering tight curves, accelerating as needed, and delivering the goods at astonishing speed and time limits.
If you are a large corporation, the answer has to come in the form of being able to build a speedboat while still cruising at a steady pace as an oil tanker. The need is not new. Nor are the solutions that have been proposed, tried, failed, and succeeded.
Here we explore three digital speedboat ideas – from ones that take the most organizational effort to the ones that can be implemented within each department or group with relative ease.
Skunkworks
The history behind how Skunkworks came to be an everyday noun for fueling speed and innovation is quite interesting in and off itself.
Skunkworks was founded in response to a request from U.S. Army’s Air Tactical Service Command to produce America’s first fighter jet needed to counter the growing threat from other countries. Lockheed Martin was quick to realize the need to respond quickly and realized it will not happen within the confines of the structures and processes of the existing operation. And thus, was born the Skunkworks. Operating outside the normal “organizational” umbrella, the high degree of autonomy, ability to turnaround high quality prototypes, avoid administrative overheads, the spirit of competitiveness and collaboration, bringing together small and very specialized team members gave Skunkworks the unique ability to deliver on the XP-80 in 143 days, seven days less than was required.
Operationalizing Skunkworks in organizations can come about in any number of ways. From spinning of a group of individuals with a specific mandate to operate as a subsidiary, to allowing the freedom for a two-pizza-team to operate in complete autonomy, or allowing an acquired company to operate on its own the variations to implement Skunkworks can only be limited by imagination.
Skunkworks has since been the source of a lot of key lessons that, to-date, can be readily embraced to achieve or deliver on a new product or test out an interesting idea.
Rapid Prototyping
One of my personal favorites is Rapid Prototyping (RP). RP is not an idea. Or practice. It is a culture. A profound shift in how a team is motivated and inspired to be forever at the cusp of technological brilliance. A leadership skill that cultivates curiosity within the team.
Technology proliferation is constant. The number of new technologies, products, vendors, and new ideas are not going to slow down. Rather than sit on the sidelines and see it happen, good leaders make the best of those technology innovations by testing their applicability for their organizations. By building prototypes or proof-of-concepts (terms used interchangeably), great leaders inspire the teams to venture into the unknown and less-known by custom creating or implementing the idea for their organization.
Recommended by LinkedIn
From implementing a vendor product to check the feasibility of a fit for their organization, to building a product to fill a specific need, great leaders create RP Factories that continually challenge the technical prowess of their teams.
Lori Beer embodies this idea elegantly and in some very practical ways. The CIO of JP Morgan believes in the power of POCs and the larger good it can do to the bank by way of helping spot best-in-class products and vendors out there. She achieves this ideal at scale when she reveals that “at any point in time we have 300 POCs going on”. For Lori, it is about “doing innovation at scale and do it in a way it will drive speed and agility”. To ensure the POCs are relevant and useful to the organization JPMorgan focuses on key areas that matter to the bank – things like AI, Data, Cybersecurity and so on.
Beyond the obvious benefits of finding cool technologies or products, POCs and RPs also have the fabulous by-product of keeping the teams continually challenged, hungry for more knowledge, helps improve morale, keeps the bank at the forefront of technology, drives down attrition and so on.
Not every organization can afford to do 300 POCs at one point in time. Depending on the size of the organization, three to five POCs at a time is certainly a possibility.
Simple, Frugal, and Fast
An effort to innovate or doing a POC does not have to be expensive. It can be a cost effective, fun, simple, frugal, and fast way to gain insights into the applicability of a technology to the organization or a product-fit for specific circumstances. Simple, Frugal, and Fast has to be the least common denominators.
Sticking to these basic tenets will allow the organization to try out multiple “experiments” in a short period of time, fail-fast any number of times, gain sufficient insights, and keep it fresh and challenging for the teams working on it.
As Michael Schrage would say “If you design your experiments [to be] simple, frugal, and fast, you frequently can capture 80 percent of the useful insights you need for 20 percent of the time and money you’re used to investing.”
Michael’s book, The Innovator’s Hypothesis, offers an elegant way to put this into action. He talks about “the idea of “5x5” experiments as a useful tool for business innovation: having a diverse team of five employees come up with five experiments that can be tested within five weeks, for under $5,000 each.”
I’d like to propose an extension of that elegant formula to say each experiment has to bring a diverse team of 5 people together, to test an idea over a period of 5 days or weeks (based on the complexity of the idea), for under $5000 each. Essentially, a 5x5x5 method. 5 people. 5 days. $5000.
Yes, we are not going to get an MVP that can be shipped to customers. But that has never been the point of a POC or Rapid Prototype. Here is the beauty of this formula. Bringing five smart and committed people together is a great way to set the idea for success. It is also the classic two pizza team. Five days or weeks – essentially draws the boundaries around what minimum set of features can be built to demonstrate the feasibility of the technology or idea. And the kicker – getting it all done within $5000.
The nuances and boundaries to make this idea succeed can be defined as necessary. But the real benefit of the idea “isn’t just in terms of innovation portfolios,” Schrage asserts. “It’s in helping boost the human capital, the creativity, the innovative capacity of individuals who participate,”. Leaders who can think like that and use innovation as a tool for inspiration and creativity are the ones that can lead the organization during technologically active times like today.
Permissionless Innovation
Skunkworks, Rapid Prototyping, and the 5x5x are all practical ways to go about innovating and moving the creative boundaries of our teams and organizations. More fundamental and integral to each of these different ideas is the idea of inculcating ‘Permissionless Innovation’ as a basic tenet of the organization’s culture. Innovation has to be basic and integral to the core fabric of the organization. Not a glorified idea meant for the 1% club within the organization. Every team member has to be inspired to innovate. To see a need and fill a need. Without having to be reminded about it constantly. Or ask for permission to innovate.
As Adam Thierer states in his article, “As an engineering principle, permissionless innovation represents the general freedom to tinker and develop new ideas and products in a relatively unconstrained fashion…In this sense, permissionless innovation refers to the idea that experimentation with new technologies and innovations should generally be permitted by default and that prior restraints on creative activities should be avoided except in those cases where clear and immediate harm is evident.”
The speedboat analogy is an investment the organization commits to make innovation an everyday activity. It is a commitment to remove the shackles that holds creative thinking down and impairs it with any number of organizational processes and approvals. The technology or area of focus can vary from organization to organization. For Lori Beer, it is Cybersecurity, AI, and Data. And Automation, Composable Architecture, and Cloud for someone else.
For a financial institution intent on transforming the customer journey, or capturing new markets, digital speedboats offer a proven way to make that leap in ways it can empower and bring the employees along for the ride.