where is your institution now in the innovation maturity...

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Engagement•Efforts are ad-hoc, informal, or non-existent•Change mandate may be new

Effectiveness•Putting innovation into regular practice•Current program may be ineffective or stalled•Extending and defending core products/services

Emphasis•Tackling a lot of things at once•Often playing catch-up from past underinvestment•Need to prioritize competing projects

Efficiency•Typically more advanced teams•Want to focus on big strategic bets and/or proprietary ideas•Creating viable options and building emerging businesses

Where is your institution now in the innovation maturity cycle?

1© FTForge, LLC | FTForge.com Self-Assessment: FTForge.com/Inventory


What isInnovation?



NOTInnovation Theatre



NOT TheFintechPettingZoo

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NOT synonomous with“Technology”



Innovation ISimplementingnew ideas thatcreate value



Innovation vs. Core Business• Existing Products• Existing Customers• Existing Markets• Internal Resources• Reduce Variability• Meet/Exceed Metrics• Increase Volume• Maximize Profit• Manage Known Knowns• Enforce Best Practices

• New Products• New Customers• New Markets• Partner with Others• Increase Variety• Create New Metrics• Nail it, then Scale it• Maximize Learning• Explore Unknowns• Discover Next Practices

EXPLORATION EXECUTION7© FTForge, LLC | FTForge.com


Innovation is NOT

like managing a typical IT project



HighlyRegulated

Environment

DynamicFintechLandscape



To bridge the gap, we need an

Empirical Approach to Value Creation

11© FTForge, LLC | FTForge.comFIRE™

Empathy

Define

Ideate

Prototype

Test

Business(Viability)

Technology(Feasibility)

People(Desirability)

Discovery Validation

Modern agile business methods

Risk Management Compliance Infrastructure

Culture Core Processes

Custom tailored for a highly regulated environment


FastIterativeResponsiveExperiments

Shorten the gap between idea and results

Process of continuous improvement

Data drives subsequent iterations

Structured to maximize learning


Empirical Approachto Value Creation

Strategic

Investments

Internal Accelerator

Proven Tools and Frameworks

• Consistent approach• Governance and process• Declaration of Innovation

• Rapid trials for quick learning and deployment

• Select partners• Network effect reduces

risk, accelerates wins

• Focus on strategic value• Impact outcome• Early insights• Compliant



Area of existing

expertise?

Sufficient return profile from

existing tactics?

Predict results of any tactic +/- 10%?

Unlikely area of

disruption in mid to

long term?

Do you want to

play defense

vs. offense?

Use Existing

Strategies, Tactics & Processes

Use FIRE™Exhausted learning

potential?

Sufficient return to

maintain in core biz?

Identifiable hypothesis

to test?

Capture data &

mothballSTOP

Yes Yes Yes Yes Yes

Yes Yes

Yes

No

No

No

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Programs: Change the state

Systems: Maintain the state

Processes: Effective Execution

Structures: Foundational Frameworks

Culture: Beliefs and Behaviors


High Level Solution Design

Refine Approach

Review Potential Partners

ComplianceValidation

Rapid Prototypes

Executive Leadership

TRIAL 1 TRIAL NTRIAL 2

FIRE Break™

Funding and Governance Frameworks

Risk and Compliance Controls

FIRE Teams™Test and Learn Sandbox


Refine Approach



Rapid Prototypes


Refine Approach



Rapid Prototypes


StructuresGovernance

Group

FIRE Break

FIRE Team

• Executive Sponsor + Members of ELT• Determine priorities• Build FIRE Teams • Approve experiments / course of action based on results.

• Cross functional team from product, marketing, operations, technology, delivery as appropriate

• Refine the opportunity & prepare experiment proposal Execute approved experiment & recommend next steps

• Team from risk, security and compliance• Supports the FIRE Team through proposal, execution and

recommendation.• Responsible for getting to ‘yes’


Test and Learn18

Test and Learn18© FTForge, LLC | FTForge.com


No Battle Plan Survives Contact with the Enemy

- Helmuth von Moltke



Everybody has a plan until they get punched in the face.

- Mike Tyson



Plans are worthless, but planning is everything

- Dwight D. Eisenhower



Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

The Next Big Idea?

The Gartner Hype Curve, 1995


Early Majority

34%

LateMajority

34%Laggards

16%MIL

Early Adopters

13.5%Innovators

2.5%

Chasm

Diffusion of Innovation

Everett Rogers, 1957 Geoffrey Moore, 1993


Early Majority

34%

LateMajority

34%Laggards

16%

Early Adopters

13.5%Innovators

2.5%

Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

Chasm

Incumbents


Plan your Work,Work your Plan.$400

$8,500

($613) ($830)

1997 1999 2000 2001

IPO

Bankruptcy

2500 Orders Per Day

8000 Orders Per Day

Capital ($M)



GBFMVP

>


Minimum Viable Product (MVP)

Must be able to test along the way

Iterations help build value at every stage

Not this…

But this!


Nail itthen

Scale it

31© FTForge, LLC | FTForge.com 31© FTForge, LLC | FTForge.com


“The facts lie outside the building.”

Steve Blank


Sales? •Hire sales manager• Initial sales hires

• Build sales organization• Build sales plan/strategy

• Sales activity and management

Marketing? •Create materials•Create positioning

•Hire PR Agency•Create early buzz

•Create Demand• Splashy launch• “Branding”

Finance? • Initial forecast: revenue and expenses

• Finalize budget•Managerial commitment

•Measure/ analyze/ report results

What does this mean for:

Adapted from Steve Blank, 2007

Business Plan/ Requirements

Product Development

Alpha/Beta Tests Launch


Customer Development

Customer Discovery

Customer Validation

Customer Creation

Company Building

STOP STOP STOP

Turn Hypotheses into Facts

Identify Scalable and Repeatable Sales Model

Exploration Execution

Steve Blank, 2007


Plan your Work,Work your Plan.

Lean Startup

Build

MeasureLearn

The Lean Startup, Eric Ries, 2011


Types of Innovation Trials

Trials can start anywhere in the process and steps can be jumped; an MVP can take many different forms

Assessment & Development External

Opportunity

Launch

Evaluation Proof of Concept(Feasibility)

Prototype(Desirability)

Pilot(Viability)

Phased Rollout

Flush out idea, organize team,

develop action plan


Business(Viability)

Technology(Feasibility)

People(Desirability)

The Sweet Spot


Desired Outcomes of a Trial• Both failure and success are expected.• Goal is to reach a quick decision.• After everything necessary has been learned, it’s a waste of

time to continue with the same trial.• Success cannot be viewed as consistently moving along with

the same idea.• It is desirable to have trials that don’t work. That means we

are learning.


“Insanity: doing the same thing over and

over again and expecting

different results.”- Albert Einstein



Focus on most basic level of technical

feasibility

Run rapid, controlled trial (no customers

impacted)

Measure and interpret results

Move to next trial if feasibility is confirmed

Proof of Concept: Technology/Feasibility


Low-fidelity mockups

Text and

graphics

Travel

through

user

experienceDemonstrate the look and feel and product design

Gather feedback on how product will be used in real world

environment

Prototype: People/Desirability


Pilot: Business/Viability


• Product introduced to customers in cohorts

• Product, messaging and processes adapted to results

• Timeline is flexible and can be changed as needed

Phased Rollout


Homework:Come to class

tomorrow with a customer problemor opportunity



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where is your institution now in the innovation maturity...

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