service design network uk conference- mark priestley sdn uk
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Why experimentation is the new target operating model
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Why experimentation is the new target operating model behaviour
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Adaptive Lab are strategic design and delivery partners for ambitious product teams.
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In the next 10 years, 40% of the Fortune 500 companies will be gone.
John Olin School of Business, Washington
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Since 2003, 236 $bn software companies have been founded.
Atomico
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Source: Accenture and CB Insights
$M invested in Fintech companies worldwide
20142013201220112010200920080
2,000
4,000
6,000
8,000
10,000
12,000Disruption creates opportunity, which attracts investors.
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technology behaviours competitors regulation
changing
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technology behaviours competitors regulation
changing
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Smart everything, ubiquitous connectivity, limitless storage …
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Cloud computing, PaaS, infrastructure as code, Bitcoin …
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technology behaviours competitors regulation
changing
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There were 179.6m contactless transactions in March this year.
Up 184.0% from the previous year.
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In January 2016, more than$1,000,000,000 was sent using Venmo.
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A difference in what a customer expects
perceivesand
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perceives
A difference in what a customer expects
andcreates a customer gap
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technology behaviours competitors regulation
changing
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18
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These new companies typically share a common set of characteristics
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Small, empowered teams
Focus on doing one thing well
Modern tech stack and approach
Outcome focused
User centred
Data driven
More willing to take risks
These new companies typically share a common set of characteristics
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technology behaviours competitors regulationchanging
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[Even] though it appears to be some obscure European Commission directive about application programming interfaces, it’s not about technology.
It’s about the future of banking and it’s really important for banks to take advantage of it.
Dave Birch - Director, Consult Hyperion, on PSD2 and XS2A
PSD2
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What do these changes mean for banks?
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Banking is necessary. Banks are not.Bill Gates - The ex-Microsoft guy
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Banks are responding…
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• Transformations• Innovation Labs• Digital diversification• Internal agencies• Venture Capital / Acquisitions• Accelerators• Beta banks
Banks are responding…
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• Transformations• Innovation Labs• Digital diversification• Internal agencies• Venture Capital / Acquisitions• Accelerators• Beta banks
Banks are responding… but often focus on
changing what they’re doing, without addressing the how or the why.
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69% of banking executives didn’t believe retail banks were able to react quickly enough to changing consumer needs.
Adaptive Lab / Research Now
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Depending which bank you talk to, they will tell you that anywhere between 50% and 90% of their IT budget is being driven by regulatory changes. It makes change very difficult. Anonymous banking exec
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79% of banking executives felt their leadership weren’t knowledgable about digital.
Adaptive Lab / Research Now
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This is the third agile transformation I’ve been through in the bank. This time we might be able to make it stick.
Anonymous banking agile lead
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To navigate uncertainty you have to understand your environment.
The best way to do this is to experiment.
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Experimentation is not trial and error.
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Eight experimentation enablers.
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An ability to launch stuff quickly, at low cost.
1
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Smart thinking around ways to reduce risk.
2
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Easy access to customers.3
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Funding for products, not projects, or programmes.
4
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Backlogs rather than roadmaps.
5
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A decision making process built around testing hypothesis.
6
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The ability to collect, process and use data.
7
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A supportive culture and governance process.
8
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A supportive culture and governance process.
A decision making process built around testing hypothesis.
The ability to collect, process and use data.
Backlogs rather than roadmaps.
Funding for products, not projects, or programmes.
Easy access to customers.
Smart thinking around ways to reduce risk.
An ability to launch stuff quickly, at low cost.
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Experimentation is an organisational behaviour.
Encouraging and enabling it is key to real transformation.
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You need to setup and organise so that you can do as many experiments per unit of time as possible.Jeff Bezos - Amazon