How to structure your credit union for innovation

by: Matt Calman

Innovation, we can all agree, is critical for success, and even survival, in today’s fast-evolving banking industry. At the same time, as every banker knows, innovation is easy to talk about but hard to accomplish, particularly in large organizations. Inevitably, departmental silos, personality conflicts and/or mismatched strategic goals come into play and hinder the teamwork required for success.

Fortunately, there is a better way and it starts with organizational structure. Where you place innovation teams in your bank plays a large part in channeling their activities and generating a positive outcome. Matching the right organizational plan with your innovation expectations will greatly affect your odds of success while a mismatch will reduce output and increase tension as the organization tries to work out role clarity.

Let’s start with what I call “point of attachment,” in other words, where you place innovation teams on your org chart.

Question of Alignment

When an innovation team is aligned to Technology under a chief information officer, their exploration typically focuses on emerging technologies that deliver productivity benefits such as higher performance, higher reliability and lower cost. Most technology-focused innovation teams display a willingness to experiment with new technologies to find a context in banking before a solid financial plan has been worked out. Tech teams have the advantage of close relationships with vendors and can work with their product development teams to conduct proof-of-concept experiments on new platforms much more easily than a team attached to a business line. The down-side is that tech solutions are often developed without a deep understanding of customer needs and financial factors; they may miss the market’s overall need while solving only one piece of the puzzle.

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