Category Archives: Finance

Why You Don’t Need An Innovation Portfolio

According to Harvard Business Review

Why You Don't Need An Innovation Portfolio

GUEST POST from Robyn Bolton

You are a savvy manager, so you know that you need an innovation portfolio because (1) a single innovation isn’t enough to generate the magnitude of growth your company needs, and (2) it is the best way to manage inherently risky endeavors and achieve desired returns.

Too bad you’re wrong.

According to an article in the latest issue of HBR, you shouldn’t have an innovation portfolio. You should have an innovation basket.

Once you finish rolling your eyes (goodness knows I did), hear me (and the article’s authors) out because there is a nuanced but important distinction.

Our journey begins with the obvious.

In their article “A New Approach to Strategic Innovation,” authors Haijian Si, Christoph Loch, and Stelios Kavadias argue that portfolio management approaches have become so standardized as to be practically useless, and they propose a new framework for ensuring your innovation activities achieve your strategic goals.

“Companies typically treat their innovation projects as a portfolio: a mix of projects that, collectively, aim to meet their various strategic objectives,” the article begins. “MOO,” I think (household shorthand for Master Of the Obvious).

“When we surveyed 75 companies in China, we discovered that when executives took the trouble to link their project selection to their business’s competitive goals, the contribution of their innovation activities performance increased dramatically,” the authors continue. “Wow, fill this under N for No Sh*t, Sherlock,” responded my internal monologue.

The authors go on to present and explain their new framework, which is interesting in its focus on asking and answering seemingly simple questions (what, who, why, and how) and identifying internal weaknesses and vulnerabilities through a series of iterative and inclusion conversations. The process is a good one but feels more like an augmentation of an existing approach rather than a radically new one.

Then we hit the “portfolio” vs. “basket” moment.

According to the authors, once the management team completes the first step by reaching a consensus on the changes needed to their strategy, they move on to the second step – creating the innovation basket.

The process of categorizing innovation projects is the next step, and it is where our process deviates from established frameworks. We use the word “basket” rather than “portfolio” to denote a company’s collection of innovation projects. In this way, we differentiate the concept from finance and avoid the mistake of treating projects like financial securities, where the goal is usually to maximize returns through diversification. It’s important to remember that innovation projects are creative acts, whereas investment in financial securities is simply the purchase of assets that have already been created.

“Avoid the mistake of treating projects like financial securities” and “remember that innovation projects are creative acts.” Whoa.

Why this is important in a practical sense (and isn’t just academic fun-with-words)

Think about all the advice you’ve read and heard (and that I’ve probably given you) about innovation portfolios – you need a mix of incremental, adjacent, and radical innovations, and, if you’re creating a portfolio from scratch, use the Golden Ratio.

Yes, and this assumes that everything in your innovation portfolio supports your overall strategy, and that the portfolio is reviewed regularly to ensure that the right projects receive the right investments at the right times.

These assumptions are rarely true.

Projects tend to enter the portfolio because a senior executive suggested them or emerged from an innovation event or customer research and feedback. Once in the portfolio, they progress through the funnel until they either launch or are killed because of poor test results or a slashed innovation budget.

They rarely enter the portfolio because they are required to deliver a higher-level strategy, and they rarely exit because they are no longer strategically relevant. Why? Because the innovation projects in your portfolio are “assets that have already been created.”

What this means for you (and why it’s scary)

Swapping “basket” in for “portfolio” isn’t just the choice of a new word to bolster the claim of creating a new approach. It’s a complete reframing of your role as an innovation executive.

You no longer monitor assets that reflect purchases or investments promising yet-to-be-determined payouts. You are actively starting, shifting, and shutting down opportunities based on business strategy and needs. Shifting from a “portfolio” to a basket” turns your role as an executive from someone who monitors performance to someone who actively manages opportunities.

And this should scare you.

Because this makes the challenge of balancing operations and innovation an unavoidable and regular endeavor. Gone are the days of “set it and forget it” innovation management, which often buys innovation teams time to produce results before their resources are noticed and reallocated to core operations.

If you aren’t careful about building and vigorously defending your innovation basket, it will be easy to pluck resources from it and allocate them to the more urgent and “safer” current business needs that also contribute to the strategic changes identified.

Leaving you with an innovation portfolio.

Image Credit: Pixabay

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A Shortcut to Making Strategic Trade-Offs

A Shortcut to Making Strategic Trade-Offs

GUEST POST from Geoffrey A. Moore

I read with interest the following article posted on hbr.org. It highlights the challenge facing every Executive Leadership Team in securing alignment around what they should prioritize, short versus long-term gains, high versus low-risk initiatives, and disruptive versus sustaining innovation. The article notes that conflicts requiring sacrifices are common across industries, and that to handle them better, CEOs should introduce a “calculus of sacrifice” to ensure greater alignment in decision-making:

“By making the degree of sacrifice explicit among such conflicting objectives and quantifying it, CEOs can reframe decision-making and give executives the tools to make decisions aligned with their vision. Instead of advocacy-based deliberations, in which proponents of different courses of action make affirmative cases, discussion focuses on sacrifice: How much of one thing are we willing to give up in order to get more of something else?”

I take this to be a very reasonable point of departure, but from here the article goes on to propose a lengthy set of dialogs between the CEO and every member of the ELT digging into their personal approach to these issues and working toward a collaborative consensus about the best course of action. I don’t think this is either realistic or efficient. Instead, let me advocate for a zone-based approach.

As readers of this blog will be aware, the zone management model identifies four “zones of interest” within any enterprise, each with its own mission, metrics, and governance model, as follows:

  1. Performance Zone: Focus on executing this year’s annual plan with particular emphasis on meeting or beating the financial guidance given to investors.
  2. Productivity Zone: Focus on supporting the Performance Zone by attending to all the processes required to operate the enterprise efficiently, effectively, and in compliance with regulations.
  3. Incubation Zone: Focus on disruptive innovations that could have substantial impact on the enterprise’s future success, and develop real options for incorporating them into a future portfolio.
  4. Transformation Zone: Focus on taking a single disruptive innovation to scale, thereby changing the overall valuation of the enterprise’s portfolio.

Each of these four zones entails a different “calculus of sacrifice,” one that is built into the mission and metrics of that zone. Rather than ask the Executive Leadership Team to chart a path forward by keeping all four in mind, a simpler way forward is to use the annual budgeting process to allocate a percentage of the total available resources of the enterprise to each one of the four zones. The question is not, in other words, what should we do with this specific situation, but rather, how much of our operating budget do we want to spend in each of the four areas? It is still a tough question to answer, but it is bounded, and you can reach closure on it at any given point in time simply by having the CEO say, this is what it is going to be.

Once the allocations are settled, then decision-making can go much faster, because each member of the ELT is making calls in one, and only one, zone, using the calculus of that zone and ignoring those of the other three. In other words, stop trying to make your colleagues more or less innovative or risk-averse, and instead, let them play to their strengths in whatever zone represents their best fit.

That’s what I think. What do you think?

Image Credit: Geoffrey Moore

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Innovation and the Silicon Valley Bank Collapse

Why It’s Bad News and Good News for Corporate Innovation

Innovation and the Silicon Valley Bank Collapse

GUEST POST from Robyn Bolton

Last week, as news of Silicon Valley Bank’s losses and eventual collapse, took over the news cycle, attention understandably turned to the devastating impact on the startup ecosystem.

Prospects brightened a bit on Monday with news that the federal government would make all depositors whole. Startups, VCs, and others in the ecosystem would be able to continue operations and make payroll, and SVB’s collapse would be just another cautionary tale.

But the impact of SVB’s collapse isn’t confined to the startup ecosystem or the banking industry.

Its impact (should have) struck fear and excitement into the hearts of every executive tasked with growing their business.

Your Portfolio’s Risk Profile Just Changed

The early 2000s were the heyday of innovation teams and skunkworks, but as these internal efforts struggled to produce significant results, companies started looking beyond their walls for innovation. Thus began the era of Corporate Venture Capital (CVC).

Innovation, companies realized, didn’t need to be incubated. It could be purchased.

Often at a lower price than the cost of an in-house team.

And it felt less risky. After all, other companies were doing it and it was a hot topic in the business press. Plus, making investments felt much more familiar and comfortable than running small-scale experiments and questioning the status quo.

Between 2010 and 2020, the number of corporate investors increased more than 6x to over 4,000, investment ballooned to nearly $170B in 2021 (up 142% from 2020), and 1,317 CVC-backed deals were closed in Q1 of 2020.

But, with SVB’s collapse, the perceived risk of startup investing suddenly changed.

Now startups feel riskier. Venture Capital firms are pulling back, and traditional banks are prohibited from stepping forward to provide the venture debt many startups rely on. While some see this as an opportunity for CVC to step up, that optimism ignores the fact that companies are, by nature and necessity, risk averse and more likely to follow the herd than lead it.

Why This is Bad News

As CVC, Open Innovation, and joint ventures became the preferred path to innovation and growth, internal innovation shifted to events – hackathons, shark tanks, and Silicon Valley field trips.

Employees were given the “freedom” to innovate within a set time and maybe even some training on tools like Design Thinking and Lean Startup. But behind closed doors, executives spoke of these events as employee retention efforts, not serious efforts to grow the business or advance critical strategies.

Employees eventually saw these events for what they were – innovation theater, activities designed to appease them and create feel-good stories for investors. In response, employees either left for places where innovation (or at least the curiosity and questions required) was welcomed, or they stayed, wiser and more cynical about management’s true intentions.

Then came the pandemic and a recession. Companies retreated further into themselves, focused more on core operations, and cut anything that wouldn’t generate financial results in 12 months or less.

Innovation muscles atrophied.

Just at the moment they need to be flexed most.

Why This is Good News

As the risk of investment in external innovation increases, companies will start looking for other ways to innovate and grow. Ways that feel less risky and give them more control.

They’ll rediscover Internal Innovation.

This is the silver lining of the dark SVB cloud – renewed investment in innovation, not as an event or activity to appease employees, but as a strategic tool critical to delivering strategic priorities and accelerating growth.

And, because this is our 2nd time around, we know it’s not about internal innovation teams OR external partners/investments. It’s about internal innovation teams AND external partners/investments.

Both are needed, and both can be successful if they:

  1. Are critical enablers of strategic priorities
  2. Pursue realistic goals (stretch, don’t splatter!)
  3. Receive the people and resources required to deliver against those goals
  4. Are empowered to choose progress over process
  5. Are supported by senior leaders with words AND actions

What To Do Now

When it comes to corporate innovation teams, many companies are starting from nothing. Some companies have files and playbooks they can dust off. A few have 1 or 2 people already working.

Whatever your starting point is, start now.

Just do me one favor. When you start pulling the team together, remember LL Cool J, “Don’t call it a comeback, I been here for years.”

Image credit: Wikimedia Commons

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What the Current Round of Layoffs Tells Us

What the Current Round of Layoffs Tells Us

GUEST POST from Geoffrey A. Moore

When layoffs hit one or two companies, you might blame it on management, but when they hit market leader after market leader, you know something structural is afoot. The important thing then is to extract the signal from all the noise. Here is my cut at it.

First of all, it is the digital consumer sector that is under fire—not all of tech. But note that when you click on the Tech Section of any major publication, all you get is consumer tech news. B2C has eclipsed B2B in the public perception of what tech is all about. The downturn may not change this for consumers, but it sure will for investors. B2B tech actually has the opportunity to thrive in a downturn if it focuses on solving urgent problems that have short time to payback.

Second, the digital consumer model has such attractive economics when it is operating at scale that it led to a massive overvaluation of the sector per se. As with prior bubbles in tech, overvaluing is primarily due to extrapolating present growth as perpetual and ignoring global economic and geopolitical downside risks. Downturns simply call this out and demand a recalibration of valuation based on a more balanced mix of positive and negative factors.

Third, when enterprises have hyper-valued market caps, management does everything it can to sustain them, eventually to the point of counterproductive actions driven more by inertia than any sensible investment strategy. Given the peer pressures of investor relations, this is almost impossible to stop, so ultimately we end up where we are, in need of a correction that everyone saw coming, but no one acted upon. And to be fair, guessing when the correction will come is not a winning play. Better to accept the dynamics you have in front of you and then adapt as fast as you can once they change.

Net net, it is time to own the correction, put our houses in order, accept the deflation in stock price, refocus on our core mission, reset our performance metrics, and get back out on the field.

That’s what I think. What do you think?

Image Credit: Pixabay

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The Seven P’s of Raising Money from Investors

The Seven P's of Raising Money from Investors

GUEST POST from Arlen Meyers, M.D.

Budding sickcare entrepreneurs inevitably want to know, “How do I raise money for my idea?” Most of the time, they are not ready for fundraising prime time and they have not taken the necessary steps to begin to do so or understand when and if it is the prudent thing or right time to do.

Here are the 7 P’s of raising money from investors:

1. Preparation

You should prepare to raise money by 1) derisking your idea as much as possible and 2) understanding what it will take to raise money i.e. technical, clinical and commercial (traction) validation.

When you have an exciting new idea, it’s easy to focus on all its benefits and jump to action. But doing so can lead to failure. Your limited perspective may mean you’re not seeing potential hurdles — and you may be leaving other promising options unexplored.

If you want the best ideas to flourish, you need to open your mind to different people from people beyond your team, whom you don’t usually talk to — and ask open-ended questions. After presenting your idea, ask: What stands out to you, and what’s missing? What would our critics say? Consider the failure of your idea: What would your premortem reveal? Consider other people outside the room and ask: What would someone on the frontlines say? Finally, put yourself in your competitors’ shoes. What flaws or weaknesses in your idea would they celebrate if you were successful?

  1. Do you understand the regulatory requirements and rules for raising private money?
  2. Do you know how much money you should raise and in what form: debt, diluting funds or non-diluting funds, like grants, contracts or some proof of concept awards?
  3. Have you validated the underlying hypotheses of your business model and demonstrated product-market fit? Do you have traction? What is the evidence? But, is product-market fit really enough?
  4. Do you have a reimbursement or revenue plan?
  5. Do you have a plan to create and protect your intellectual property?
  6. Do you have a regulatory approval or compliance plan?
  7. Have you created the appropriate corporate entity and corporate governance documents?
  8. Are you prepared to bootstrap your startup and dedicate the time, effort and capital required to be successful?
  9. Have you created the necessary fundraising and marketing collateral like a website, executive summary, social media channels to create awareness, engagement and buzz about your company?
  10. Can you answer these three questions: Is the market for the problem you want to solve big enough to make your journey worth it? How many customers want it and are willing and able to pay for it or get someone else to pay for it? Can you win at it give market competitors?

2. Plan/Strategy

After answering these questions, assuming you decide to proceed, you will need a capital raising plan and strategy. A capital raising strategy is essentially a roadmap for how your organization will pursue and obtain the funds it needs to fuel its growth. The capital raising process can take a long time and it’s a serious undertaking. However, while you may stay up late at night searching for new investors, writing pitch decks, and pouring over financial spreadsheets, building your strategy is the simplest part of the entire process. Here are the parts to the plan.

3. Pitch deck

Your pitch deck should tell your story. Who are the villains? Who are the heros? How did they win? There are many resources available to help you craft and polish your short, medium and long pitches, depending on the circumstances and the audience. Here is something to start:

4. Platform

You will need a CRM or tracking platform to keep track of the people who have contacted and how you intend to convert them as leads to investors. Crowdfunding platforms are another resource.

5. People

Do you have the right people on your startup team who can raise money? Are the founders the right people to do it? Do you have robust enough networks and contacts? Do you need a fractional of full-time accountant, controller or chief financial officer?

6. Process

The process should describe how and who will execute your fundraising plan, whether you are starting a company or scaling one. Since what you are doing is selling and marketing your idea and your team, what is your marketing, sales operations and sales enablement process?

7. Performance indicators

Performance indicators help you measure your progress and inform your strategy and execution adjustments moving forward. Here are some fundraising metrics for non-profits.

Raising money from investors is a lot like renovating your kitchen. It will take much longer than you thought it would, the costs in time, money and effort will be much bigger than you assumed and, when you see the final results, you will wish you had done some things differently.

Good luck and be sure to follow the right rainbow.

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Silicon Valley Has Become a Doomsday Machine

Silicon Valley Has Become a Doomsday Machine

GUEST POST from Greg Satell

I was working on Wall Street in 1995 when the Netscape IPO hit like a bombshell. It was the first big Internet stock and, although originally priced at $14 per share, it opened at double that amount and quickly zoomed to $75. By the end of the day, it had settled back at $58.25 and, just like that, a tiny company with no profits was worth $2.9 billion.

It seemed crazy, but economists soon explained that certain conditions, such as negligible marginal costs and network effects, would lead to “winner take all markets” and increasing returns to investment. Venture capitalists who bet on this logic would, in many cases, become rich beyond their wildest dreams.

Yet as Charles Duhigg explained in The New Yorker, things have gone awry. Investors who preach prudence are deemed to be not “founder friendly” and cut out of deals. Evidence suggests that the billions wantonly plowed into massive failures like WeWork and Quibi are crowding out productive investments. Silicon Valley is becoming a ticking time bomb.

The Rise Of Silicon Valley

In Regional Advantage, author AnnaLee Saxenian explained how the rise of the computer can be traced to the buildup of military research after World War II. At first, most of the entrepreneurial activity centered around Boston, but the scientific and engineering talent attracted to labs based in Northern California soon began starting their own companies.

Back east, big banks were the financial gatekeepers. In the Bay Area, however, small venture capitalists, many of whom were ex-engineers themselves, invested in entrepreneurs. Stanford Provost Frederick Terman, as well as existing companies, such as Hewlett Packard, also devoted resources to broaden and strengthen the entrepreneurial ecosystem.

Saxenian would later point out to me that this was largely the result of an unusual confluence of forces. Because there was a relative dearth of industry in Northern California, tech entrepreneurs tended to stick together. In a similar vein, Stanford had few large corporate partners to collaborate with, so sought out entrepreneurs. The different mixture produced a different brew and Silicon Valley developed a unique culture and approach to business.

The early success of the model led to a process that was somewhat self-perpetuating. Engineers became entrepreneurs and got rich. They, in turn, became investors in new enterprises, which attracted more engineers to the region, many of whom became entrepreneurs. By the 1980’s, Silicon Valley had surpassed Route 128 outside Boston to become the center of the technology universe.

The Productivity Paradox and the Dotcom Bust

As Silicon Valley became ascendant and information technology gained traction, economists began to notice something strange. Although businesses were increasing investment in computers at a healthy clip, there seemed to be negligible economic impact. As Robert Solow put it, “You can see the computer age everywhere but in the productivity statistics.” This came to be known as the productivity paradox.

Things began to change around the time of the Netscape IPO. Productivity growth, which had been depressed since the early 1970s, began to surge and the idea of “increasing returns” began to take hold. Companies such as Webvan and Pets.com, with no viable business plan or path to profitability, attracted hundreds of millions of dollars from investors.

By 2000, the market hit its peak and the bubble burst. While some of the fledgling Internet companies, such as Cisco and Amazon, did turn out well, thousands of others went down in flames. Other more conventional businesses, such as Enron, World Com and Arthur Anderson, got caught up in the hoopla, became mired in scandal and went bankrupt.

When it was all over there was plenty of handwringing, a small number of prosecutions, some reminiscing about the Dutch tulip mania of 1637 and then everybody went on with their business. The Federal Reserve Bank pumped money into the economy, the Bush Administration pushed big tax cuts and within a few years things were humming again.

Web 2.0. Great Recession and the Rise Of the Unicorns

Out of the ashes of the dotcom bubble arose Web 2.0, which saw the emergence of new social platforms like Facebook, LinkedIn and YouTube that leveraged their own users to create content and grew exponentially. The launch of the iPhone in 2007 ushered in a new mobile era and, just like that, techno-enthusiasts were once again back in vogue. Marc Andreessen, who founded Netscape, would declare that software was eating the world.

Yet trouble was lurking under the surface. Productivity growth disappeared in 2005 just as mysteriously as it appeared in 1996. All the money being pumped into the economy by the Fed and the Bush tax cuts had to go somewhere and found a home in a booming housing market. Mortgage bankers, Wall Street traders, credit raters and regulators all looked the other way while the bubble expanded and then, somewhat predictably, imploded.

But this time, there were no zany West Coast startup entrepreneurs to blame. It was, in fact, the establishment that had run us off the cliff. The worthless assets at the center didn’t involve esoteric new business models, but the brick and mortar of our homes and workplaces. The techno-enthusiasts could whistle past the graveyard, pitying the poor suckers who got caught up in a seemingly anachronistic fascination with things made with atoms.

Repeating a now-familiar pattern, the Fed pumped money into the economy to fuel the recovery, establishment industries, such as the auto companies in Detroit were discredited and a superabundance of capital needed a place to go and Silicon Valley looked attractive.

The era of the unicorns, startup companies worth more than a billion dollars, had begun.

Charting A New Path Forward

In his inaugural address, Ronald Reagan declared that, “Government is not the solution to our problem, government is the problem.” In his view, bureaucrats were the enemy and private enterprise the hero, so he sought to dismantle federal regulations. This led to the Savings and Loan crisis that exploded, conveniently or inconveniently, during the first Bush administration.

So small town bankers became the enemy while hotshot Wall Street traders and, after the Netscape IPO, Internet entrepreneurs and venture capitalists became heroes. Wall Street would lose its luster after the global financial meltdown, leaving Silicon Valley’s venture-backed entrepreneurship as the only model left with any genuine allure.

That brings us to now and “big tech” is increasingly under scrutiny. At this point, the government, the media, big business, small business, Silicon Valley, venture capitalists and entrepreneurs have all been somewhat discredited. There is no real enemy left besides ourselves and there are no heroes coming to save us. Until we learn to embrace our own culpability we will never be able to truly move forward.

Fortunately, there is a solution. Consider the recent Covid crisis, in which unprecedented collaboration between governments, large pharmaceutical companies, innovative startups and academic scientists developed a life-saving vaccine in record time. Similar, albeit fledgling, efforts have been going on for years.

Put simply, we have seen the next big thing and it is each other. By discarding childish old notions about economic heroes and villains we can learn to collaborate across historical, organizational and institutional boundaries to solve problems and create new value. It is in our collective ability to solve problems that we will create our triumph or our peril.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Building a Business Case for Change Management

Building a Business Case for Change Management

GUEST POST from Chateau G Pato

In the ever-evolving landscape of business, change is not just inevitable; it’s essential. But how do we convince stakeholders that the upheaval of change management is worth the effort and resources? The answer lies in building a compelling business case that not only highlights the necessity of change but also showcases its tangible benefits. Drawing inspiration from Braden Kelley’s style, which emphasizes innovation and value creation, let’s delve into two case studies that exemplify successful change management.

Case Study 1: The Agile Shift in Retail

Company A, a traditional brick-and-mortar retailer, faced declining sales as e-commerce began to dominate the shopping experience. The need for change was clear, but the path was not. By adopting an agile approach to change management, Company A restructured its operations to focus on customer experience, data-driven decision-making, and rapid iteration.

Results: Within two years, Company A saw a 20% increase in customer retention and a 15% rise in overall revenue. The agile shift not only improved their market position but also invigorated the company culture with a new focus on innovation and adaptability.

Case Study 2: Digital Transformation in Finance

Company B, a mid-sized financial institution, operated on outdated systems that hindered efficiency and customer satisfaction. The proposal for digital transformation was met with resistance due to the high initial costs and disruption to daily operations.

Strategy: The change management team presented a five-year financial model, projecting a 30% reduction in operational costs and a 25% increase in customer acquisition. They also outlined a phased implementation plan to minimize disruption.

Results: Post-implementation, Company B not only achieved the projected cost savings but also experienced a surge in customer satisfaction ratings, leading to a stronger brand reputation and competitive edge.

Conclusion

The business case for change management should be rooted in a clear vision, supported by empirical data, and communicated with a narrative that resonates with stakeholders. As demonstrated by Company A and Company B, the strategic implementation of change can lead to significant improvements in performance and profitability. In the spirit of Braden Kelley, we must view change not as a hurdle but as a gateway to innovation and sustained success.

By embracing the principles of change management and learning from real-world applications, organizations can navigate the complexities of transformation and emerge stronger. It’s not just about changing for the sake of change; it’s about evolving to meet the demands of a dynamic business environment.

SPECIAL BONUS: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Pexels

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The Social Impact Investing Revolution

Opportunities for Organizations

The Social Impact Investing Revolution

GUEST POST from Chateau G Pato

In recent years, there has been a significant shift in the way organizations approach investing. A growing number of companies are realizing that they can make a positive impact on society while also generating financial returns. This movement, known as social impact investing, focuses on investing in projects, businesses, and initiatives that have a measurable positive social or environmental impact.

Case Study 1: Patagonia

One prime example of the social impact investing revolution is the case of Patagonia, the outdoor clothing company known for its commitment to sustainability and environmental conservation. In 2013, Patagonia launched its own venture capital fund, Tin Shed Ventures, with the goal of investing in startups that align with its values and mission. Through Tin Shed Ventures, Patagonia has invested in companies like Beyond Meat, a plant-based meat alternative company, and Bureo, a company that turns discarded fishing nets into skateboards and sunglasses. By leveraging its financial resources to support socially responsible businesses, Patagonia is not only driving positive change in the world but also generating financial returns for itself and its investors.

Case Study 2: Acumen

Another compelling case study is the impact investing efforts of Acumen, a non-profit global venture fund that invests in companies serving low-income communities in developing countries. Working in sectors such as healthcare, agriculture, and energy, Acumen provides patient capital to entrepreneurs who are addressing pressing social and environmental issues in their communities. One notable success story is d.light, a company that provides affordable solar-powered lights to off-grid communities in Africa and Asia. By investing in companies like d.light, Acumen is not only increasing access to essential products and services for marginalized populations but also demonstrating the potential for financial sustainability and scalability in the impact investing space.

Conclusion

The rise of social impact investing presents a unique opportunity for organizations to align their financial interests with their social and environmental values. By investing in projects and companies that are creating positive change in the world, organizations can not only drive meaningful impact but also build long-term value for themselves and their stakeholders. As the social impact investing revolution continues to gain momentum, organizations have the chance to lead the charge in building a more sustainable and equitable future for all.

Bottom line: The Change Planning Toolkit™ is grounded in extensive research and proven methodologies, providing users with a reliable and evidence-based approach to change management. The toolkit offers a comprehensive set of tools and resources that guide users through each stage of the change planning process, enabling them to develop effective strategies and navigate potential obstacles with confidence.

Image credit: misterinnovation.com

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Design Thinking in Financial Services

Enhancing Customer Experience in Banking

Design Thinking in Financial Services - Enhancing Customer Experience in Banking

GUEST POST from Art Inteligencia

In today’s highly competitive financial services industry, banks are constantly seeking innovative ways to differentiate themselves and provide exceptional customer experiences. One approach gaining popularity is design thinking. By applying this human-centered design approach, banks can better understand customer needs and create solutions that truly enhance their experience. This article explores the concept of design thinking in financial services, highlighting its benefits and presenting two case studies that showcase how this approach can revolutionize the customer experience in banking.

Case Study 1: DBS Bank – Reinventing the Branch Experience

DBS Bank, one of Asia’s leading financial institutions, undertook a comprehensive redesign of its branches to align with design thinking principles. The bank conducted extensive research to understand customer pain points and preferences. By mapping the customer journey, DBS Bank gained insights into areas where it could improve the customer experience.

Using design thinking, DBS Bank transformed its branches into vibrant and welcoming spaces, departing from the traditional cold and impersonal atmosphere. The bank incorporated technology seamlessly into the branch experience, providing customers with self-service kiosks, touch-screen displays for product information, and interactive tools for personalized financial planning. These changes not only enhanced efficiency but also encouraged customers to engage more actively with their banking needs.

As a result, DBS Bank saw a significant increase in customer satisfaction and engagement. The branch transformation project showcased how design thinking can positively impact the customer experience, making traditional banking more accessible and enjoyable.

Case Study 2: Simple – A Digital-First Banking Solution

Simple, an online banking platform in the United States, embraced design thinking to create a truly customer-centric banking experience. Simple aimed to simplify banking, addressing the frustrations customers encountered with traditional banks’ complex products and processes.

Through extensive user research and empathy mapping, Simple identified key pain points experienced by their target customers. Armed with these insights, the company created a streamlined online platform with an intuitive user interface. It focused on providing real-time financial insights, goal-oriented savings features, and transparent fee structures—all while eliminating unnecessary bureaucracy.

By leveraging design thinking in their digital-first approach, Simple ensured that its platform catered to users’ needs, resulting in high customer satisfaction and loyalty. Simple’s success demonstrated how design thinking can be applied not only to physical spaces but also to digital solutions, revolutionizing the customer experience in banking.

Conclusion

Design thinking is transforming the financial services industry by enabling banks to put customers at the center of the design process. By gaining deep customer insights, banks can create innovative solutions that enhance the customer experience, driving customer satisfaction and loyalty. The case studies of DBS Bank and Simple highlight how design thinking can be applied in both physical and digital environments, leading to remarkable improvements in customer engagement and overall brand reputation. As financial institutions continue to prioritize customer experience, embracing design thinking becomes pivotal for their success in an increasingly competitive landscape.

SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.

“The Problem Finding Canvas should help you investigate a handful of areas to explore, choose the one most important to you, extract all of the potential challenges and opportunities and choose one to prioritize.”

Image credit: Wikimedia Commons

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Change Management Best Practices for Mergers and Acquisitions

Change Management Best Practices for Mergers and Acquisitions

GUEST POST from Art Inteligencia

Mergers and acquisitions (M&A) can be one of the most challenging events any business will ever experience. Change management is essential to ensure the successful integration of two organizations, cultures, and systems. To ensure a smooth transition, it’s important to have a plan in place that covers every aspect of the process. Here are some key best practices for change management during mergers and acquisitions.

1. Establish Clear Goals and Objectives: Before beginning any merger or acquisition, it’s important to set clear goals and objectives. This includes the desired outcomes of the transaction, the timeline for the integration process, and the resources that will be required. Having a clear understanding of the objectives will help ensure that everyone is on the same page throughout the process.

2. Develop a Change Management Plan: A comprehensive change management plan should be developed to guide the transition process. The plan should address the impact of the merger or acquisition on the people, processes, and technologies involved. It should also include strategies for communicating the changes to stakeholders, as well as plans for training and supporting employees during the transition.

3. Create an Open Communication Platform: Open and effective communication is essential for managing change during a merger or acquisition. All stakeholders should be kept informed of the progress of the merger or acquisition, and any changes that arise should be communicated in a timely manner. An open communication platform should be established to ensure that information is shared quickly and accurately.

4. Stress the Benefits: It’s important to emphasize the positive aspects of the merger or acquisition to all stakeholders. Employees should be made aware of the benefits they will experience as a result of the transaction. This could include new job opportunities, expanded markets, or access to new technologies.

5. Monitor and Adjust: The transition process should be constantly monitored and adjusted as needed. This could include changing the timeline, adjusting the resources required, or even scrapping the plan altogether and starting over. It’s important to remain flexible and be prepared to adjust the plan as needed.

Mergers and acquisitions can be a difficult and stressful process, but with the right change management plan in place, the transition can be much smoother. By following these best practices, businesses can ensure that the transition is successful and that stakeholders are satisfied with the outcome.

Image credit: Pexels

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