Finance and Innovation

Screen Shot 2014-08-05 at 01.16.20Fast Company listed their most innovative companies for the year, including a top ten for innovation in financial services, companies who are building great things for their customers; new services and new platforms.

There were very few on the list I’d ever heard of so I started reading through the list and the company profiles; I started to wonder (a) how new are these companies? and (b) why is it so hard for incumbents, despite their resources, to innovate their way onto this list?

Answering that first question, here’s list of the companies in the top ten with the year they were established. Only two of the ten are more than ten years old.

Company Name  Established  Service Provided
 Nice systems  1986 Consumer service for mobile, including within apps.
 Square  2009 Send money via email.
 Bitcoin  2009 Cryptocurrency, removing all the middlemen in financial services.
 GiveDirectly  2008 Donate via cellphone, direct to the recipient.
 Dwolla  2008 Building a better banking network and launching a credit card.
 Transferwise  2011 Peer-to-peer international currency transfers.
 OneID  2011 Creating a single login – no more remembering multiple passwords.
 Mastercard  1966 Re-imagining the mobile-payment network with MasterPass.
 Estimize  2011 Crowd-sourcing estimates on company performance, and doing better than most of the pros.
 Etoro  2007 A social network for traders, lets you copy the investment of other traders.

All of these innovations take advantage of something in the digital space, some on the growing world of mobile. To be fair the banks have also been active and innovative in this space – just not at the same rate. Some of the innovations above support and use

There’s already some discussion on why it’s so hard for large companies in established industries to innovate. Even the best techniques from Silicon Valley aren’t a magic path to increasing innovation according to this HBR article. It comes down to culture; the things that make a company successful at execution at scale aren’t the things that make a company naturally great at innovation. There are companies that are able to innovate and to scale their operations, but it’s a rare combination.

Is there something about the financial sector that makes it even harder? Perhaps, some sectors (music, travel) show a similar batch of relatively young companies, but the energy sector has more than twice the number of companies over 10 years.

I think there are two things that make it harder for financial services companies to innovate. The first is the risk mindset, in theory financial services companies should be expert at assessing risk and take decisions that maximise return for an accepted risk. In my experience the growing pressure of public opinion and increasing regulation have reduced whatever appetite there was for risk since the global financial crisis. And that’s the second thing – the global financial crisis began in 2007 and during the crisis and in the years since affected financial institutions have had to focus on legal cases,  restructuring, cost control and divestment. All of that left little room and few resources for innovation. It’s probably not a co-incidence that half of the companies in the top ten were started between 2007 and 2009.

It’s great that there’s innovation in finance, and many of the solutions are customer-focused either as improved service or as de-mystifying the world of finance. I hope it inspires the “old” banks; there are more opportunities for more innovation.

Image; Fixing the Money Pipeline / ShellyS / CC BY-NC-SA 2.0

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Do you build satisfaction or happiness?

Screen Shot 2014-07-28 at 13.08.50Not all brands, not all industries, are able to use social media as a brand builder in the same way.

I see sweeping general statements in many books, blogs and articles about social media that make me cringe as a customer. The latest was “Customers seek identification with their brands”, do we? Maybe I’m weird but I don’t. Or rather I only identify with a tiny subset of the brands I use.

I can remember listening to a presentation by the Lego’s Global Social Media Director, Lars Silberbauer, talking about all the fun things they’ve done, and the way that customers are using lego in innovative ways. I looked longingly at the examples, and seriously doubted that the financial company I worked for could ever do this. I wrote then about two factors of social media motivation.

I likened it to Herzberg’s two factors of motivation, and came up with a simple diagram linking the factors to levels of engagement. I’ve been rethinking that a little, I think some brand are satisfaction builders and some are happiness builders. So which one are you?

Satisfaction builders

You are a satisfaction builder if when your products and services work correctly customers don’t talk about you, if something goes wrong they do – and everyone piles on.

For example, a bank customer might appreciate that their application for a loan of several thousand euros was approved quickly but not want to discuss it on facebook. But if they’re stuck at the supermarket unable to use their card for a transaction of 120 euro, a much smaller transaction, they have access to complain immediately via their mobile phone.

I put infrastructure (including mobile phone networks), financial services, public or government services and grocery staples into this category.

The brand is not part of the customers identity and customer stays due to high switching costs or apathy, rather than brand loyalty.

Happiness builders

You are a happiness builder if when your products and services work correctly customers talk about you, if something goes wrong they forgive you quickly and sometimes publicly. Other customers will support you during a crisis.

For example, everybody loves Lego. The most common complaint about Lego is the pain of standing on an abandoned piece, which is  usually told as a cute story. Even when Lego came in for stronger criticism around sexism in its minifigs or its advertising the criticism was focused on improving the company rather than outright anger. Even those campaigning for change seem to trust that Lego would find a good solution.

Fashion, personal grooming and leisure industries are in this category. For many people cars, computing, home accessories – some people really love their coffee machines – are also included.

Context Matters

Many companies will have some customers who see them as satisfiers and others who see them as happiness makers. They may also have customers who see them differently depending on the context.

My phone is well-loved and well-used, you can tell by the state of the cover. My mother doesn’t care about the phone she has; both phones are the same brand and almost the same model.

Computers are satisfiers for lots of people, but part of happiness and even personal brand for many (try saying you hate apple on certain forums).

Even an indvidual customer may say the brand differently depending on context. Mostly airlines are happiness for me, I associate them with holidays and seeing friends and family. If I travel for work they become more of a satisfier.

Of course a brand can move from happiness to satisfier during, for example, a crisis. Or from satisfier to happiness under positive circumstances, but a sustained shift in this direction will be challenging. It will require more than action in social media.

Look around your house for the brands you own – where are they on the spectrum? which ones do you seek out on social media?

Image; Smiley Egg Head / The Monnie / CC BY-SA 2.0

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Starting a Community

Companies have different approaches in who gets to start a community on their enterprise social network; some want to control who opens a community others want to put as few barriers as possible in the way of starting new communities. What’s your approach?

Let me know in the comments of any other options I haven’t thought of – or the background to the decision.

 

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Employee Engagement

parkerWhat is employee engagement?

Employee engagement is often cited as a contributing factor to improved company results, and Kevin Kruse defines it as;

Employee engagement is the emotional commitment the employee has to the organization and its goals.

Engaged employees will go to extra lengths to do their job and serve the business and the customers. Kruse cites examples of people choosing to work overtime without being asked because the work needed to be finished. Essentially they’ll care for the company and its customers.

What’s in it for employees?

If you’re engaged at work you feel pride in your work, in the company you work for, a loyalty to the company. You’re likely to have more intrinsic motivation; a sense of purpose, a willingness to take responsibility, and a desire to learn.

What’s in it for companies?

Engaged employees are seen to be more productive, more service oriented, and better for the profits of the company. It’s so important to companies that they put considerable, and growing effort, into measuring engagement year on year. There is criticism on how it’s measured, but large companies still find value in measuring it.

What do the cynics say?

It’s a term that is an easy target of cynics, some label it as a new name for employee satisfaction, or teamwork. Others consider it a measure of window dressing to make the company look good. It’s often connected to “manager speak” as in this brilliant Dilbert cartoon.

Can you have too much employee engagement?

Tomas Chamorro-Premuzic points to a dark side of employee engagement, reminding readers that engagement is a means to an end – companies pursue it for the productivity results. He also points out that it’s dangerous to expect higher performance to automatically come from higher engagement, managers should instead focus on developing performance at a higher level.

So much for the company perspective, what about for individuals? I believe that in some cases burnout is the direct result of excessive employee engagement. I’ve seen more than one highly professional, highly motivated, engaged employee take on levels of responsibility beyond their capacity, when the company failed to notice – and failed to support them – burnout was the awful outcome.

Can companies build employee engagement?

A friend whose work in internal communications I admire has suggested that engagement is something intrinsic to the person and not dependent on the company. I think there’s some truth in that but I’m not quite so pessimistic. I think you can destroy engagement or you can build it up.

I would like to see a change in how we talk about engagement, the conversation now centres on expectations on the employee and benefits to a company.

Instead I propose that we recognise that the contract between an employee and a company is about the exchange of money for skills and time. That agreement must be a fair exchange. Beyond that it’s up to a company to earn the engagement of all employees by how they treat their staff.

So next time people talk about “building employee engagement”, suggest a switch to “earning employee engagement” and go on from there. It’s a one word change but the approach is completely different.

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Hotel Wifi; a charge fiasco

Screen Shot 2014-07-07 at 23.04.00In the last 10 days or so I’ve stayed at 5 different establishments each with a different wifi service.

I needed internet to access email messages, research plans for each day, and my current writing projects. My mobile phone would let me do all that, but it’s not a comfortable tool for writing and there is a daily data limit when roaming under my current contract.

Boutique Hotel

The first was a boutique hotel in central London. Wifi was free throughout the hotel, but password protected. The room rate was high, and every luxury is included so it’s not surprising that wifi was also included.

Central London

I then moved to a more budget friendly option, still in central London – walking distance from the district line. Wifi was considered an additional service and charged at 10 pounds per day. And that’s 24 hours of availability, not 24 hours of use. Plus it was for a single device – I was carrying three devices that could use a wifi network. But the staff are obviously sick of discussing the wifi charges, the concierge gave me an extra login when I needed to send a quick email related to my booking.

Tourist City, Business Hotel

I left London and went to a tourist city, staying in a hotel geared to business people. The charge there was 15 pounds per day. But free in the public areas – for one hour.

It made me regret my booking. I’ve done some research and come up with half a dozen hotels in the town with free wifi for a range of room rates – often lower than I paid.  I complained via twitter and was told “it’s hotel policy”.
Screen Shot 2014-07-07 at 19.21.37Fair enough, now that I know I won’t book there on my next trip.

Airbnb

I stayed at an airbnb place for two nights, where wifi was free. I’ve stayed at Airbnb places in several cities now, wifi has been included for no extra charge at all places. I realise there is a different level of complexity providing wifi to 100 rooms rather than one, but it does show that there is an expectation for wifi that airbnb hosts are meeting.

Yotel

For my last night in the UK I stayed at the Yotel at Gatwick airport; wifi free. The room rate is less than half that of the Central London or Tourist City hotels. The room is very basic, in fact they call them cabins. There’s another hotel, a more upmarket version of the same concept called Bloc Hotel at Gatwick, which also provides free wifi – and boasts of its speed.

So the places at the top and bottom ends of the price range include wifi; they know their guests need it and they’ve responded to that demand. Two and a half years ago I predicted that there would be a growing demand, for wifi, in that I was right. I wouldn’t have guessed that the customer demand would take so long to shift the policies of mid-level hotels.

There are of course plenty of other options for wifi; cafes, bookshops -even McDonalds in London provides free wifi. I used it even though I wasn’t a customer (probably not their intention!).

But if McDonald’s will provide free wifi for the price of a hamburger what is the issue for those mid-level hotels? Given the growth and growth and growth of internet access via mobile relative to desktop why aren’t hotels changing their policies? Why am I asked to pay a 10% surcharge for what should be a standard feature? After all they don’t charge me based on water used or TV watched.

It’s going to be a selection criteria from now on. I bet that decision saves me money.

What’s your take on wifi in hotels?

 

Image; Wifi / themaninblue / CC BY-ND 2.0

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Twitter Basics; The whole series

I’ve been writing a series of blog posts on twitter basics, and figured I’d do the smart thing and compile them into one easy post, complete with dodgy drawings.

If you’d like the whole series in one document, I’ve done that too! Please go to scribd to download my Twitter Basics.

twitterbasics1_crop 3 Twitter Basics

Your profile, twitter conventions and who to follow.

twitterbasics2_crop 3 More Twitter Basics

Your tweets, building a following and twitter etiquette.

twitterbasics3_crop Twitter Basics; Tools

Using twitter, analysing twitter and managing your following. I’ve highlighted some of my favourite tools, but there are new tools every week.

twitterbasics4_crop Twitter Basics; Companies on Twitter

How companies can use twitter for business, some “do’s and don’ts”.

twitterbasics5a_crop2 Twitter Basics; Trolls, fakers, hackers and scams

The dark side of twitter; how to spot the fakers and scammers and what to do.

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To Move the Needle

Personal PhotographyI was reading an article on Wal-Mart’s e-commerce business recently and I came across the term “to move the needle”. Since I spend more time sewing on buttons than I do driving cars at the moment the first mental picture I had was troubling. Turns out not that needle.

The expression refers to moving the needle on some instrument of measurement such as a car speedometer, possibly more specifically the analogue Vu meter used in audio recording. In a more abstract form asking whether something “moved the needle” is just asking whether there was a noticeable improvement in the results.

In the Wal-Mart article they were referring to the e-commerce side of sales, which at 0.3% of US sales (by value) is barely impacting the billions in total sales. So although sales are at over $200 million it’s not yet moving the needle. I may not be the only one unfamiliar with the term, the headline reads “Wal-Mart’s e-commerce business: Can it move the needle, be material?” I’m pretty sure those last two words have been added since I first saw the article.

In another take on moving the needle, Lisa Earle McLeod applies the term to personal changes, and shows how making small, consistent changes is significant. She says “You don’t accomplish big things overnight; you move the needle every day.” Exactly.

What are you doing to move the needle today?

Image; A Needle Pulling Thread / Amarand Agasi / CC BY-NC-SA 2.0

 

 

 

 

 

 

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