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Digital kabuki – strategy or theater?

  • Posted on May 29, 2019
  • Estimated reading time 3 minutes
digital buzzwords

Design-led thinking starts by focusing on a challenge. Only by defining the problem can we – technologists, strategists, humans – then work to build a solution that achieves our goals. This is innovation: creating with a vision to solve problems and address the needs of the user.

Focusing solely on a stated problem isn’t enough, however. As Henry Ford famously said, “If I had asked people what they wanted, they would have said ‘faster horses.’” We want our inventions to affect meaningful change and so we must go beyond the challenge at hand and consider if it is the root cause or a symptom of something more. Thinking broadly can help. Have other industries faced similar problems? What interesting lessons can be learnt from other disciplines?

For example, to improve the patient handover process at a children’s hospital in St. Petersburg, Florida, the team studied Formula One pit crews and applied those principles, which address personal strengths, essential roles and appropriate task assignment. In Japan, the beak of the kingfisher provided the inspiration for the nose of the Shinkansen Bullet train; allowing the train to run more aerodynamically and quietly.

But what happens when innovation doesn’t work?
In the financial services industry, we’ve seen bad innovation multiple times. Large institutions, their budgets exhausted by monolithic initiatives, come to innovation as a ‘nice to have’ or ‘luxury expense’. Rather than coming at the challenge with an open mind, they have frequently deployed the shiniest tech in a scattergun approach hoping to hit innovation in the process. This is a solution in search of a problem. This is what I call, “Innovation Theater.”

It makes for great marketing, and investment banks get to say publicly that they’re using XYZ technology to bring value to their clients, and shareholders. In reality, they’re simply changing the customer or user experience by increments, and potentially missing the chance for a bigger play.

Consider robotic process automation (RPA). As it rose in popularity, more and more banks invested in RPA, identifying rote internal processes that they could “teach” code to perform. A robotics developer works with the business to identify those parts of a complex business process that can be ‘taught’ to the technology, replacing the need for human intervention. The promise of RPA was that we would bring automation to bear and reduce errors while reducing costs through downsizing our workforce.

Those same banks are now discontinuing that spend and re-allocating the investment to machine learning (ML) or artificial intelligence (AI) efforts. Rather than simply converting human tasks into code (i.e., “faster horses”), firms are looking to create ways to continuously “teach” code, scrape data, and automate the business in ways that will have longer-term impact and generate strong returns for the business. AI and ML are more agile technologies that improve as they’re used. While RPA automated mundane, commoditized work, AI and ML can simplify, and in the long term improve, complex processes.

Although Blockchain is undoubtedly one of the most exciting technologies of recent times, I see that it is headed down a similar path. Many of my clients come to me with very specific problems that they wish to address with Blockchain. Part of my role as the “blockchain pragmatist” in the room is to dispel the blockchain fog and look for those specific challenges that will truly benefit from this solution. Our ‘Blockchain Evaluation Framework’ uses a negative supposition to exhaust other possibilities to ensure that we arrive at a use case that makes sense; both commercially and technologically.

When we consider any emerging technology as a path-to or a part-of an innovation, we must also recognize that just because we can do a thing, it does not always follow that we should do that thing.

Even if blockchain may be the solution, there are a lot of steps businesses must take before investing in the technology: parties must agree on rules of engagement, permissions and user identity issues, then build consensus to secure the funding for an investment.

All this is to say that sometimes technology is the answer, but there’s nothing innovative about using these technologies in an ineffective and inauthentic way. Instead of looking to business and news headlines for ideas of where or how to innovate, capital markets firms should instead look inside – and identify areas in their service offerings or in their own core technology that could be improved. Identify what could be better within a specific business or offering, and then work to design ways to solve for this problem.

Look for inspiration in small wins that may be happening in pockets in your own organization. Dan Heath called them ‘Bright Spots.’ There will be breakthroughs from other industries and disciplines that wouldn’t normally hit your radar. How did those products come to be so seamless, so thoughtless? How could that be replicated in a way beneficial to my own business; to my own daily life?

That is the first step on a path to true innovation.

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