Banking on Digital Growth
Banking on Digital Growth

Episode · 1 year ago

95) #ExponentialInsights: FIRE: The Secret to Strategic Planning & Innovation


On the Apollo 13 mission, NASA only had one way to get its astronauts out alive: innovation.

It’s something every financial brand should take to heart.

Because you have a choice: Innovate, or die.

So says JP Nichols, Co-Founder at FinTech Forge & Alloy Labs Alliance, whose wealth of experience has taught him that innovation is messy, but it’s the key to survival.

He joins me in the latest episode to discuss:

- Why the real opportunity for financial institutions are at the edge

- How to innovate without going all-in

- How FIRE fuels innovation

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

Let's be honest banks credit unions that they sell 95% of the same products at 95% of the same pricing backed by 95% of the same policies and procedures. And yet you know my my favorite conversation with bankers as always. Well, our markets a little bit different. You're listening to banking on digital growth. With James Robert lay a podcast that empowers financial brand marketing sales and leadership teams to maximize their digital growth potential by generating 10 times more loans and deposits. Today's episode is part of the exponential insight series where James robert interviews the industry's top marketing sales and fintech leaders sharing practical wisdom to exponentially elevate you and your team. Let's get into the show greetings and hello, I am James robert, ley and welcome to the 95th episode of the Banking on digital growth podcast. Today's episode is part of the exponential insight series and I'm excited to welcome jP Nichols to the show. J. P. Is a top rated speaker advisor and podcaster. He is also the co founder of Fintech forge as well as the co founder of the alloy labs alliance and has been named one of the top Fintech influencers in the United States. Welcome to the show, J. P. Well, thanks and thanks for having me. I'm excited for this conversation. Um, you've been thinking a lot, writing a lot about innovation. But before we get there, what is one thing that you are just excited about right now, whether that be personally or professionally? Well personally, I'm excited that it's soccer season again. Uh, not only playing horribly, uh, a little bit every week and uh, but my beloved Seattle sounders are back in action and off to a good start this year. You're getting back in the game yourself playing 11, 11 again, right? Yeah. For the first time in 37 years. And how is that going? How are you feeling? I'm exhausted. It's a lot of running. The good news is on the full field like that. There are times when the ball is a mile away from you so you can actually stand and catch your breath a little bit. But when you have to run, you really have to run. Absolutely. You know, it's, I've been getting asked to go playback basketball, played basketball growing up and they asked me to come back and play on some leagues and I'm like, I have four small kids, you know, I've got this business and everything else I would love to and so I'll just keep doing my running thing in the short term. But no, I I feel you on that on that out of breath. Um The only good news is I qualify this year for the over 60 age bracket and I'm at the lower end of that. So I finally found a peer group I can keep up with. Well there you go. And I want to talk about this idea of peer group because that's a that's an interesting segue Into some of the work that you've been doing um really over the last year, 12, 15 months since this pandemic surprised us all, let's start collaboration. Um They need to collaborate in an environment like this versus trying to continue to work independently Amongst one another. Where the opportunity is there for Collaboration. There are so many. I mean you think about the industry, let's be honest banks credit unions that they sell 95% of the same products at 95% of the same pricing backed by 95% of the same policies, procedures. And yet, you know my my favorite conversation with bankers is always, well our markets a little bit different. I'm I'm always still waiting for explain to me the part that's that's really different. Um right, you have customers that have financial needs and we have to take care of them. And so there are so many things that um you know, every bank is creating on their own where it would be much cheaper, much, much faster and a better outcome if they were collaborating with others. And that's one of the reasons why we started the alloy labs alliance.

We we started with 12 founding banks in 2018. We got about 50 today who are working together to bring new ideas to market and um together make investments in the future, adopt new ideas and uh you know, the pandemic actually proved to be a good time for that because they were really faced with some complete uncertainties. You know, banking as a profession has been around hundreds of years now and so many of the so called best practices have been around for decades if not centuries. And um we were talking before we recorded about some of the teaching I do with the graduate schools of banking and and they're all about like teaching those best practices the same things that everybody else is doing and the pandemic really um you know, kind of throughout the playbook for everybody and they had to adapt um to that banks. Even the biggest lag arts that were you know, holding off on digital transformation suddenly found, well if none of my branches are open and I still have customers that I need to take care of. Um we're gonna have to find some way to do that. So it really kind of opened things up over the past year or so. Yeah. And you think a lot about this idea of Innovation in financial services, you you wrote an article that was titled Banking's Apollo 13 moment. And in that you had shared for more than a decade now I've been trying to convince bankers that innovation is not optional and that organizations that were not innovating were slowly dying. So I want to go back a decade because you talked about this idea of centuries and decades. Let's go back a decade and review what has happened around innovation in banking. And first off, what really kind of spurred the idea for you to focus on innovation to begin with in the first place. What inspired you? Well, I spent 20 years as a banker helping to grow a $6 billion bank to a $400 billion bank today, that's known as U. S. Bank. And in 2000 and seven when Richard Davis became ceo, he said, you know there's a lot of great things you would say about us bank. They were then as they are now back to peer group, right, the leader of the of the peer group of the top 10 banks. Number one in our own way. Number one in are we Number one on an efficiency ratio. But they weren't very innovative at the time and Richard wanted to change that and I found that really exciting. I mean I had a full time day job. I was chief private banking officer but I was asked to join a group of people to build what would end up being the first enterprise innovation office um uh led by Dominic ventura who who's now leading all of that across the whole firm and quite capably. And I really got onto this idea that, you know, there we just spend so much time doing the same things a little bit better, a little bit better. And that's important too. I don't mean to denigrate um incremental innovation, it's important to continue to improve the things that you're already doing. But there just weren't enough of us thinking enough about how do we do something completely new? How do we look at? You know, 10 years ago we were still pretty early in the rise of Fintech, but Fintech were starting to come out and solve problems that people really had that banks weren't thinking about yet. And, you know, we can go through any number of the biggest innovations of the last decade or so. And uh I don't know if I can think of one that originated at a bank. It's interesting that you talk about incremental innovation versus what I would consider exponential innovation or more of that 10 X thinking versus two X thinking. And and when you think about this and this is something that you've you've written about change happens in in two phases, gradual change and then changed. It happens suddenly, which you know, gradually takes time decades uh from a horizon...

...line. And then suddenly we've we've seen that with with Covid being the accelerant. When we think about the story of Apollo 13 um when the crew uttered the famous words Houston Houston, we've had a problem, we've had a problem. You feel banking has had a problem, How would you frame this problem? And what is that biggest challenge confronting banking right now? Well, I wrote that post a year ago because we were on the 50th anniversary of that, it was kind of timely, but I saw parallels to um the pandemic, the Apollo 13 mission left Cape Canaveral, Cape Kennedy um with, you know, one of the most ambitious missions ever. They were going to do a lot of research on geology on the moon and and looking at um uh flight pass and an orbit paths of the moon. And and and Some of the other things that were happening in space. And they really went very ambitiously. They had done however many trips to the moon by this point and, and, you know, kind of became didn't seem as risky, right as Apollo 11. Uh we we've we've done this a couple of times already. Let's let's just get up there and and let's do all this research. And suddenly one little thing change, An oxygen leak that that threatened the life of the crew. And so suddenly the mission of Apollo 13 and all of NASA. In fact all of the nation, I would argue, I'm really focused on can we bring those three men back to earth safely? And I think the pandemic did that for the banking industry where people did their strategic planning in the fall or Early in 2020 and all that got thrown off the window. And suddenly they had improvised. And and one of the stories about Apollo 13 is uh the ground crew in Houston were um mocking up a way to use the oxygen tanks from the lunar escape module to be used in in the command module. And it didn't quite fit. Another analogy to banking technology, right? The pieces didn't always connect very well. And they literally were using duct tape and uh covers of manuals and at one point they said, you know, stuff a sock down in the bottom to fill it up. Innovation is often messy like that. And bankers are kind of not wired to think about messy and duct tape and stuffing socks and things. Uh they really want to believe it's something that we could put our best minds around a big conference table at a nice resort somewhere and say boy, we've got a good strategic plan. You know, now let's go after it. And it really threw a wrench into that. So I think it the pandemic exposed this lack of real commitment to digitization that is right in front of all of us. We live our lives so many of us um pretty digitally watching whatever we want on demand, ordering whatever we want. And that only increased during the pandemic, you know, from food to merchandise delivered, Contact Leslie to our home and to kind of hide all of that and say, well yeah begrudgingly, I guess we should have digital account opening but I'm not really going to change and anything else. And I call that putting digital lipstick on the analogue pig just isn't good thing, yep. Same thing. And you know I think this idea of change and transformation you hit the nail on the head when you say that most of the core functions of banking have not and probably will not change, you know will continue to take and hold deposits, make loans provide liquidity, move money in and out, provide financial advice and products. But even though the what won't change you believe it's the how the how a financial brand delivers these core functions for example, to back to this point. The way we buy and consume media, movies, music, even food now post...

...pandemic groceries. It's the how that has transformed the most. And so when we look at the howl of transformation, what what are those opportunities there for financial brands? For banks, for credit unions? Well maybe I'll hit a quick threat first before I talk about the opportunities because what what you described there um the medium is um invisible, right? It's not that I want to be staring at my phone or my ipad or whatever it is that I want to watch that new series on amazon and the phone makes it possible. And so for banks that are used to being that um you know third party between borrowers and depositors between um you know counter parties and transactions and so on. Um The distribution of finance uh you know with with a middle man being taken out is an existential threat. And and I think the opportunities um are first of all say I think that's one of the things that's hardest for leaders to understand. Um they look at their customer satisfaction scores because they often asked the wrong thing, hey, you came into the branch. How did that go when people go? It's pretty good. Everybody is really nice. And you know, I did exactly what I wanted to do. We're not asking kind of the other questions. Well, what if that could have been done automatically? Not only, you know, done on your phone? What if you didn't even have to come in at all? And it already did it? And so that's pretty daunting to a lot of leaders. But your question about the opportunities before we get there, I actually want to give an anecdotal story because I think this would make a lot of sense. Like you talked about, the medium is invisible. Let's go back. The year is 1996. Um, what are you doing on a friday night? Uh, you know, where are you going? Uh, if you have kids for the dear listener, where are you going yourself? With, with, with, with your, your significant other, you walk into this place and what are you going to rent? Yeah. Right. Um, you know, you're, you're, you're alluding to blockbuster, which, which is uh, you know, an overused analogy and yet under examined in mind the under examined piece of this that I want to dive into because so if you think about the home entertainment market, the home video market, right? That was a super fragmented industry, mom and pop shops couple 100 square feet, a couple 100 Titles in stock and Amazon, uh, sorry, blockbuster at the time executed that business model better than anybody else. Right. So they invested in um, 10,000 square foot stores in grade a space is trained people to make recommendations. They put massive investment into quantities of the movies so that the ones you wanted were in stock. They had regional warehouses with barcode because it it was horrible you to walk in there and you want to get the latest release and all the films would be gone. It was a bad experience. Well, I used to joke, you know, you walk in all excited after work to come home with Beverly Hills, A cop, and then you walk out with camp Beverly hills because that's the best you could do. And so blockbuster changed all that and they were at one point had 40% global market share of the home entertainment market. I mean it's easy to laugh at blockbuster now. Um but that was not just a good company, it was a great company. And if you think back to the first major competition, what would end up putting them out of business netflix and think about what their original business model remember? It was red...

...envelopes. Uh, and I often use this as an example in the boardroom and in the classroom. Um I asked people to put themselves in the shoes of the leadership of the board of Blockbuster and somebody says, guys, we have to pay attention to this, we've got this new competitor, it would be completely normal and rational to laugh at that and say their mailing a DVD and you'll get it in a few days. Uh That's not, you know, look at our customers who are just thrilled at at walking around on friday night. It's packed in here and they're buying Twizzlers and popcorn along the way. But you know, we understand what the experiences. Yeah, well, The apocryphal story is supposedly, is the egregious late fee. Um right. The supposedly now reed Hastings is as some sort of disavowed the story, but that he returned ironically Apollo 13 um and had a massive late fee and um so began to, you know, craft a a new um competitor for this. Now. Also apocrypha lee is supposedly, he also had an eye towards digital all along. And um I don't know if this is a little bit of reckon history, but supposedly um you know, the story goes well, we knew that this was going to be all digital at some point, the technology just wasn't there yet. So we were building our database and building out the long tail where we could have nothing was ever out of stock because we could always have it here. You might have to wait a few weeks to get it. But um it's completely understandable how blockbuster missed that. And you probably also know this part of the story that um you know, uh netflix had a hard time scaling and offered to sell themselves for 15 million, Eight million. They were literally laughed out of the room by a blockbuster management, we'll just watch you die and you know, so you asked the question, you know what, what's the pain point and um it's not always obvious and so where I try to help people spend more time is really digging deep beyond those surface questions of hey, how is the branch transaction day? Oh it was good, so everything's good, we don't need to change everything. Um I'm a big subscriber of jobs theory. Um You know, people hire products to do jobs for them and the more you can understand that job, the pains they're trying to avoid and the gains they're trying to achieve. And and it's um it's often several layers deep and the customers don't know uh supposedly Henry Ford. Never really said um If I could ask my customers, they would have said um they wanted a faster horse. But that's too good of a story to let go. Um So I continue to repeat that story too. It's not just asking the customers, hey, what about this? There there are so many um opportunities and where we're focused right now the banks we work with is um what my partner, Jason Hendriks has been calling the edge of money. And his point is that financial institutions have been focused on being the center of money. And um the opportunities are really on the edge because at the center of money it's debits and credits and dollars and cents. And we're really good at managing that. We're really good at that. What were not so good at is understanding the context and the subtleties that you know, the reason I'm I'm here applying for this loan is not because I want a banking experience is because I need a new home because my I'm relocating or my family is expanding or whatever technology has transformed our world and digital has changed the way consumers shop for and buy financial services forever. Now, consumers make purchase decisions long before they walk into a branch, if they walk into a branch at all, but your financial brand still wants to grow loans and deposits, we get it. Digital growth can feel confusing, frustrating and overwhelming for any financial brand marketing and sales leader, but it doesn't have to because James robert wrote the book that guides you every step of the way along your digital...

...growth journey, visit www dot digital growth dot com to get a preview of his best selling book banking on digital growth or order a copy right now for you and your team from amazon inside, you'll find a strategic marketing manifesto that was written to transform financial brands and it is packed full of practical and proven insights you can start using today to confidently generate 10 times more loans and deposits now back to the show. Well, when you think about being at the center of money, think about Blockbuster, they were at the center of that movie rental entertainment experience and we remove the middle man out of the equation. You're starting to see that now trending with crypto because now we can I can pay directly Blockchain, all of that. That's and so I like this idea of moving from the center uh out to the edges. Um, I can't help but think of another film analogy of Mr Miyagi, when you walk in the middle of the road, actually when you walk on the left side, you're okay. When you walk on the right side, you're okay. But when you walk down the middle, just like grape. So it is, yeah, that's that's a great point right there about moving from the middle to the edge of money. Uh, and and and that's where the blue oceans are, right? That's where the opportunities are to do something different. Everybody's playing in the middle of all that. And, you know, I just don't have a lot of brand promises to make about, hey, don't worry. Um, we'll move your money quickly and efficiently and cheaply and we won't lose a penny. Well, neither is any other bank. It's kind of like, you know, so many. And I know marketing is your domain and not mine, but I think about, um, you know, just like automobiles, Hey, I want an automobile and you know, I need to have, um, power windows and I need to have power brakes and airbags and the navigation system and all of those kinds of things. Well any car will do that. That's not what what marketing is is all about. It's about a much bigger and more esoteric brand promise around that. And that's hard to do. And I know a lot of financial institutions have tried that may try kind of fluffy, you know, marketing around, you know, feel good moments and all that kind of stuff, but it has to be met with, um, kind of solving, um, some problems that customers actually care about. That's what jobs theory I think comes back into play and Derek Sutton and I over Auto Books, we just had a really good conversation about that a couple of episodes ago, because it really is about, you know, one of the people's biggest questions and concerns, what are their hopes and dreams and then what what jobs are needed to perform to bridge that gap between. And so when you look at the edge of money, what are those opportunities at the edge that you're seeing for financial brands? Well, first of all, I would say Auto Books is great. We love Derek, we're actually working with him with a number of our members and assume he talked about this with you. But you know, they're really looking at um you know, paying the invoice that ought to be the center, right? That's the key job that small businesses have. I think there's so many opportunities um for the small business, we were still in the early stages of all Fintech um in consumer banking, but we're really just barely out of the starting gates on the small business side and customers have so many needs around moving money. And um uh 81% of businesses don't have any employees. Uh Derrick may have talked to you about this, we talked to him about this recently and um he's talked about looking at banks and finding customers hiding in consumer accounts, but they're making business transactions because they're blending that they don't want, yes, they can go open zero or Quickbooks account or whatever, they don't want to, they don't want to be a CFO, they wanna, you...

...know, make furniture or so hats or whatever their business does. The rise of the gig economy too. I think we're going to see more and more of this going forward Well and and the rise of the gig worker and the needs that they have are barely being addressed. Um you know, so much of the banking industry is still built around. Um you know, you work for a company for 35 years and have a pension and a 401K. And a regular paycheck and um all of those kinds of things that are less and less true every day for everybody. So there are so many opportunities around understanding um what are you actually trying to achieve here? And is there a better way of doing it? Another plastic story outside of banking? We talk about a lot swiffer, right? Um You know for years um manufacturers made more water absorbent mops, less absorbent mops. Or ergonomically designed buckets and all of this when when the final solution came about it wasn't a mop or a bucket, right? The swiffer is a category in and of itself multibillion dollar category for Procter and Gamble because they understood there was a job to be done. Yes. Clean the floor. But a good enough job that's really quick and doesn't make me messi in the meantime. It's those subtleties around things like that. And that's why it's interesting to see like what players like Shopify are doing, right? So that's the e commerce side. But then they have this whole new line that they're bringing on. And when you look at the website, it almost is framed around the jobs to be done, start like start a business, sell online, market your products and manage and under manage, you have payments, shipping and capital. So it's really framed around these different jobs that a business would need to do to make money. Right? And I think Square and Paypal do that really well. And um, you know, some banks do, but there's still a lot of opportunity for traditional financial institutions, banks and credit unions to, to really, um, you know, every rock hasn't been turned over yet. There's lots of opportunity out there. Absolutely. And when you think about innovation in financial services and think back over the past decade or so what is a commonly held belief that others might have that even the dear listener might have, that you just might passionately disagree with. Um, I think financial institutions, um, Take much higher stock in there. Very definition. Hey, we're a community bank and that really means something to people or where a credit union and that really means something, it means something greater than zero, right. They're not completely wrong about that. Um, I mean this, this came up recently with the ruling against chime and apparently pending against some of the other neo banks, they can call themselves a bank. And I tweeted out kind of a joke that the laggard banks are going to say, checkmate game over right, can't call yourselves a bank now, what are you gonna do? Well, they're going to continue to have 12 million customers who are really happy and they're going to continue to grow. And so I think the labels matter far less to consumers than um, than the financial institutions think they do. You know, and you think this idea of legacy of, and this is from a marketing perspective, the, you know, position around with the best place to work in the city and that's their, that's part of their go to market strategy and I come in from the outside like no one cares now, maybe best place to work from a recruitment and Hr Absolutely that's important. But if you're talking about growth and acquisition and retention does it really matter? So personally I think there's some value in that I and and The people that I know in the industry are really sincere...

...about this, they really do care about their communities and they really do invest in their communities and that's wonderful. I don't want them to stop that. All I'm saying is um there are probably about 48 other things that consumers value higher than that and you need to pay attention to those things. I agree. And when you talk about paying attention and looking for areas to focus around, you teach a framework about innovation through the work that you're doing over at alloy labs called Fire. And I love acronyms because that's how this 80 D mind can actually remember things. And so we have a lot of acronyms that we use over here as well. And Fire is an acronym for fast iterative responsive experiments. Can you briefly break down this framework and really kind of this idea of experimentation? Sure. Um, well, I'll hit each one quickly right first is fast and that's really important. Um, I often joke that um, financial institution leaders tell me, hey, we're fast follower. And I often reply, well, you're half right, There's nothing fast about anything you're doing, but you're definitely a follower. And um, I get that very few institutions want to be out on the bleeding edge to launch something nobody has ever done before and that's fine. But you've got to be reasonably fast. There's literally a bank in 2019 that was practically bragging to me about how you were going to soon be able to take out your phone and take a picture of checks and actually make a deposit through their mobile app. Can you imagine this? Right. What an incredible innovation they had. And I said, yeah, that'd be great if this was 22,009, right? Not not in 2019. So if you don't have remote deposit capture by all means, go do it. But don't tell me that that's game changing for you, right? That's catch up spending. So that's fast intuitive meaning that um we want to continually tweak. It's not um think really hard launch and success. Um it's that we're continually learning from the market, learning from customers and adapting from that um responsive meaning that what's driving those iterations is data. I also like to joke that in the absence of data, what we have to go with is what we call the hippo, it's the highest paid person's opinion. And I think of Jim barksdale when he was Ceo of Netscape and he used to say, look, if we're gonna go with data, let's go data. But if we're gonna go with opinions, let's just go with mine. And sometimes you have to do that. Sometimes you just need to make a leap and the leader has to make a decision, but leaders can make better decisions, the more data they have and finally experiment. Um, and the important thing about experiment is it means you don't really know what the outcome is. You have a hypothesis and you want to test it so that he is testing it as quickly and as cheaply as possible to find out. And the analogy I use here is often talk about uh playing poker and I often joke around um if I'm in the classroom over the board room and, and I'll say, hey guys, does anybody here play poker I'm learning, I'm watching it on television and I understand that what you are supposed to do is push all your chips into the center of the table at the beginning of the game and you stand up and you say I'm all in, is that how you play? And of course anybody that understands poker kind of laughs and somebody usually says, oh boy, I'd love to have you at my game if you think that's how it works. And so it's a little bit of a Socratic dialogue to get them to understand that, look, you want as little money on the table as possible when you don't have any cards, because cards represent data, I have no idea what's going to happen. Um, what's the minimum I can do to get in this game? And then once I get cards I get data and if the data looks good, I want more money on the table. If the data looks bad, I'm gonna fold and come back and try something else. A different experiment Now. It's not a guarantee right? Even if I hold four kings, um, I can still be beaten, but at least that's where I want to put more money...

...and so, uh, so it makes so much sense in the context of, of poker. But yet that's not how we do strategic planning. We think that when we look at big projects with big risks and big budgets, that the idea is to think harder, ask more questions, create a longer um, set of due diligence questions or an RFP um, to try to get all the technical questions answered and, and then, you know, threaten somebody with, you know, this is your tail if this doesn't work and then then you know cross our fingers and launch. And reality is it's a lot less risky if we figure out how to break that down into a series of smaller bets and try things. And so that's really the art uh fires how do we break these things down into small experiments and learn along the way? Yeah. M. V. P. Minimum viable product 80% getting 80% of the way, get it out, tested iterated. Just had a conversation with joe palette. See who was the ceo of the Content Marketing Institute and wrote a great book that he is re releasing now called Content Executive Edition. And there's a lot of this thinking that can be applied in multiple areas of the financial brand. Whether it be on the innovation side, whether it be on the marketing side, the technology side, the cells side, the opera. I mean, so literally we can keep, keep thinking about this idea of fast iterative responsive experiments. You know, when, when you go in and you're, you're teaching this. Yeah. What what are some of the mental blocks that might hold an individual or a team back from really saying? You know what? I get it. I understand it philosophically and I love the idea of Socratic discussions. That's a conversation for another day right there. But uh, that's the teacher in me coming out. But what holds people back from really accepting and acting on this type of thinking here? Well, I think there's, there's a lot of things and we're fans of the worker carol Dweck and the growth mindset. Yeah. And um, you know, any time you're an incumbent in an industry and especially a mature industry, um, it's really easy to um, have your your mind kind of framed by, look, there's an empirically right answer here. And um we're doing the best practices and and we're looking at um our peer group and and we're measuring all these things and and we're missing all those things that are happening on the other side. Um There's probably another layer of financial services in particular, a business where um you have to be right, 99 point something percent of the time and your credit decisions and that's the number one driver of earnings is net interest income. I was just with a group of students a couple of weeks ago and we got into a little bit of this discussion and I said, you know, I find it ironic. I said, please tell me if there's one I'm not aware of because I can't think of a single bank that failed because of their innovation program or their digital banking. Alright. Every bank that's ever failed has failed because they've taken on, you know, too much of the wrong kind of credit. And um and isn't that ironic? That's the part that they know the best, the part that's been perfected of the whole industry is is, you know, taking in deposits and marking it up and lending a back out yet. That's the number one cause of failure. And then, but I guess it's just the devil, you know, this is the devil that you don't know. And so there's just a lot of um fear around the uncertainty of things. Technology creates another layer of fear and uncertainty. And so many of our leaders today um in the financial services industry don't have a strong technical background and um I don't know that you have to be a programmer necessarily, but you do have to be kind of comfortable with technology and so what they often do is then delegate important strategic decisions to the tech team. And I'll never forget the C I. O. That once told me, you know, my...

...worst day is when the Ceo goes out to another tech conference and it comes back with 10 business cards. Hey, these companies are all cool. You gotta go, you know, we have to work with them shiny object syndrome. Right? And so then you have all of these kind of disconnected um projects that aren't moving the needle anywhere. And you know, we've seen this, you know, we've talked about over the past decade or so. One of the other things that's kind of come and short of gone is the rise of the chief innovation officer and an innovation team. Right. All the big banks have them and still have them. Most of them have turned over. Um some of the smaller banks have tried it and have said, well that was a whole big waste of time because they thought it was about, you know, thinking really hard and finding the next big idea, not finding a little idea and iterating on it till it becomes meaningful. Yeah, I just heard a great conversation from Jeff Bezos is talking about this idea of innovation at amazon and how all of the massive failures and he was talking billions and billions and failures. One success though, it covers all of that and then some I want to bring this all the way back to the beginning and jp this has been a great conversation and appreciate the thinking and the insights that you've shared today for the dear listener. But to start this conversation, you said, innovation is messy. Uh innovation is messy. And when we think about this idea of change and transformation incremental, you know, small start, small progress is greater than perfection. What is one small step? One small recommendation? You can leave the dear listener with today that they can take action on Just to take one step forward in their innovation journey. Um you just start running experiments, right? Even if they're not framed very well. Um just try some things and and then the key there is, there's a misunderstanding that that risk is kind of binary things. Are the risky or not risky. Um So so think about what are the degrees of risk if if you're going to test this thing, um what's the biggest question you have? My partner Jason likes to call the killer experiment, right? If this one thing isn't true, nothing else matters. So go test that. And so most often that probably has something to do with customer acceptance. And instead, we see so many institutions spend all their time on the technical feasibility unless you're doing something incredibly experimental. Uh, it's probably technically feasible maybe at a price. You can afford, maybe not. Um, but I would really encourage everybody to focus their experiments on the customer and um, just try some things and that you don't have to build it. You can build brochure ware and vaporware and um, you know, I can't tell you how many so called quote websites I build on power point. Just say, hey, it would look like this and you click here and it does this, you know, tell me what you think, um, and development exactly. And just trying some things and then, um, talking to your customers in that way, You know, you know maybe a couple of years ago James robert I might have said um the answer that was talked to your customers and I think what I've heard a lot in those years as so we do that we we do talk to our customers but we talked to them about the stuff that we already do and so um experiment with your customers is probably better advice. And um we've seen just such positive um learning experiences from people that have done that and learn things that they never knew. Never would have found out absolutely to build upon that thinking as we wrap up here talking. Yes but people don't always tell the truth. That's why you can undercut that talking by just simply watching and observing their behavior and action in any type of...

...these experiments. And you combine the two data sets together the quantitative and the qualitative and that's where I think you're gonna get some massive breakthroughs JP anyone who is listening, they want to continue the conversation that we started today. What is the best way for them to reach out? Say hello, connect with you. Well I'm in twitter and linkedin, JP nickels and I C. O. L. S. No H. Um and uh alloy labs dot com. All right connect with JP learned from J. P. And J. P. Thank you for joining me for another episode of Banking on digital growth. Thanks for having me as always and until next time be well. Do good. Make your bed. Thank you for listening to another episode of Banking on digital growth with James robert. Ley. Like what you hear, tell a friend about the podcast and leave us a review on apple podcasts, Google podcasts or Spotify and subscribe while you're there. To get even more practical improvement insights, visit www dot digital growth dot com to grab a preview of James, roberts, best selling book banking on digital growth. Or order a copy right now for you and your team from Amazon inside, you'll find a strategic marketing and sales blueprint framed around 12 key areas of focus that empower you to confidently generate 10 times more loans and deposits until next time, be well and do good.

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