Disruptive innovation not just for Apple, Google anymore
Community financial institutions can create cultures of innovation in one of three ways, Soren Kaplan tells TMG Executive Summit attendees
DES MOINES, IA (June 29, 2016) — Wall Street Journal best-selling author Soren Kaplan told 2016 TMG Executive Summit attendees breakthrough innovation doesn’t have to be monumental. Nor does it have to come from big-brand organizations with powerhouse fan bases. With a culture of innovation supporting them, even small ideas from small organizations can lead to big disruption.
Kaplan, who specializes in disruptive innovation, innovation culture and strategic change, has worked with organizations like Disney, Kimberly-Clark and Hershey. At today’s TMG Executive Summit, he shared three ways credit unions and community banks can begin to develop their own disruptive innovations.
The first strategy involves uncovering what Kaplan calls unarticulated insights. Financial institution leaders are encouraged to dive into discussions about which consumer segments represent the greatest future opportunity. From there, Kaplan encourages teams to explore the question: What are the unarticulated needs and pain points of these segments?
The second strategy Kaplan recommended is building new business models. A business model, he said, answers three questions:
How do we add the most value for consumers?
How do we create a sustainable business (i.e. make money)?
How do we create the most differentiation?
To get audience members to rethink the mainstay financial institution, Kaplan shared three examples of the ways in which innovators have reimagined traditional business models:
Mediate the transaction — Disruptors like NeighborGoods allow people to borrow unused or underused tools like lawnmowers and power tools from each other, saving users time and money while facilitating community.
Build relationship bridges — Mealsharing.com, which Kaplan called the Airbnb of dinner, connects home cooks with people looking for home-cooked meals. These individuals, who may not otherwise have ever met, get to sit down to dinner together thanks to Mealsharing.com.
Help people help others — A car wash owner in Colorado invited the local high school football team to host their fundraising car washes at his business and split the profits. The owner reports bringing in more money on fundraising Saturdays than he ever made before.
Kaplan’s third strategy is “disrupt yourself.” Much of this involves bringing the outside in. In other words, credit unions and community banks should listen closely to their members and customers. They can also create this self-disruption by allowing actual time for the development of new ideas, for instance by challenging teams to dedicate 20 minutes of each day to working on innovative strategies.
Kaplan encouraged the executives in the room to be intentional about allowing for experimentation. Zappos, he pointed out, began as a prototype. Its developers had no idea if people would buy shoes online before they put their concept out there. But they gave it a try, and found they had met an unarticulated need among shoe shoppers.
“Leading innovation requires innovating how you lead,” Kaplan said near the end of his talk. “Norms and values are very hard to change, but with innovation, you can influence them.”
TMG is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit www.tmg.global.