In a world of uncertainty, bankers, lenders, and technology firms had grown accustom to traditional measures and approaches honed over decades of lessons learned. Today, the playbooks are gone, and we need to accept that consumers will not wait for us as we say the right things—but execute against a script that has been retired.
It is the mid-point for 2020 and what a historical six months it was. A few headline markers off the top of my head:
The largest economic stimulus (nearly $2 trillion USD),
The largest national debt increase (likely exceeding $4 trillion USD by end of 2020),
The chaos of a global health crisis infecting over 12 million worldwide with nearly 550,000 deaths,
Social unrest driven by decades of policies and practices exploding across the domestic landscapes,
Chasms of gender and wealth inequalities sowing disparities and feeding rising anger,
The Federal Reserve becoming the banker for corporate America, and
An educational system grasping to adapt their delivery models to online and in-person.
And, the list goes on and escalates day-by-day. It is anticipated that another round of stimulus to American homes might take place in August 2020 as the escalation of COVID-19 infections reach daily records all triggering the above impacts to repeat or get worse. Somedays it is hard to catch your breath to know how to react.
Where Do WE Go from Here?
To write about a non-headline topic now, especially what might happen in the last half of this year with corporate budgets, innovation, technology, or initiatives seems impractical, senseless, or worse, self-promoting. However, innovation and the ramifications of its singularity do not stop regardless of impacts to present day models and unfolding world events.
Historically, social advancements during times of great uncertainty produce lasting changes, while often decimating long held axioms of business conduct, technology usage, operational systems, and information interchanges (including forecasting). We have reached such a juncture, and to adapt and adopt these nascent trends requires an examination of our baselines, while challenging of our foundational business models (think compartmentalized orchestration of delivery utilized in innovation development).
What will make any sense given the historical nature of our human condition? What economic realities will be actionable as uncertainties of politics (during these pandemic cycles) influences rates, future stimuluses, unemployment, lockdowns, and social responses? These causes and effects impact industries that include travel, hospitality, healthcare, local and state governments, construction, retail, agriculture, transportation and many more all culminating with businesses and individuals using products and services from financial services and banking organizations (#FSBO’s).
Moreover, will innovational advancements mitigate the global events and concerns, or will this be a steppingstone to the next one? When it comes to the future of corporate operations, integrations, partnerships, outsourcing, remote solutions, or reskilling of workforces, what will the roadmaps look like? Will they even be recognizable?
For FSBO’s, the rest of this year and likely into Q3 2021 will witness their clients and internal operations focus fragmented attention on costs and ramifications which are “not obvious.” Superficially, this may include variable cost fees, covenants (invoked during times of uncertainty), and traditional capital and operating costs. For many individuals and businesses using FSBO products and services, and for the FSBO’s themselves, there will be a reexamination of any partnership arrangement. These partnerships will be increasingly viewed as building blocks that can be replaced with another for value-added delivery as operations seek to be highly nimble.
As innovations revolutionize omnichannels—data, technology, behaviors, layers—the use of orchestration will make these compartmentalization’s a common strategy and implementation method. In the end, the innovation axiom that “different is good” may no longer have the impact it once enjoyed.
In this article series of “Watch This Space” we will begin by challenging three traditional themes—total cost, partnerships, and being different is being innovative.
Rethinking Total Cost
There is a popular topic made famous initially in the 1990’s and expanded heavily in the ensuring decades—total costs. We have bantered this theme into total cost of ownership—hardware, software, services, life-cycle costs, maintenance—and used it as a measure of what an innovation (or a commodity offering used to keep pace) would cost the organization. Sometimes, enterprises use this to generate ROI for given time periods, but the idea was to represent cradle to grave of financial commitment.
There are a few permutations that factor in opportunity costs, behavioral influencers, and yes, even goodwill to show the value (or cost) of NOT doing the initiative. And, let us also recognize that there are many variations of total cost models—attendance, education, goods sold, enterprise risk, personal relationships, and recently, climate and sustainability—all in an attempt to quantify direct and indirect costs of “having something” or “doing something.”
Mentioning total cost in an article, in a whitepaper, in a leadership piece is meant to instill confidence and offer disclosure—much like invoking the term “innovation” to reassure tentative approvers. However, those items included in these quantitative and qualitative models are based on undisclosed assumptions and implications of adoption. What was the author of these data points trying to independently convey? Was it comprehensively objective, or targeted to justify a product or service that was benefiting the sponsor? Does the total cost assume a given timeframe rather than the increasingly iterative and shortened cycles now demanded by consumers and their behaviors? As innovation pushes forth compartmentalizing and layering functionality, does the total cost reflect a module by module benefit or expense as part of an orchestration of solutions? The changing operating environments demand a revisiting of how the solution is used, what are the elements sampled, and more importantly, where is the efficacy of implementation when timeframes are measured in weeks and months?
Additionally, the assessment approaches for innovations often focused on large implementation initiatives where project teams were in proximity including those functions spread across the numerous FSBO back offices. However, the global health crisis has shown that a new challenge being confronted is how to manage efforts and programs where people are never in the same room. How will #PMI requirements adapt to precisely vetted approaches that can no longer be practiced given fractured workforces and processes? Have we thought to revisit our justification for total cost in these new times to ensure that our own assumptions are still valid and justified (regarding sustainability, adaptability, or retirement)?
Total cost for those firms and FSBO’s urging you to “watch this space” needs to have a refresh, which not only works for new solutions, but to architecturally justify and adapt existing infrastructural options (e.g., hardware, software technology, people, et al). Many systems claiming today to be “e” ready and offer improvements were conceived and defined well before the 2020 chaos.
So, were these solutions developed to handle the chaos and changes occurring now, did they just find new relevancy, or is it a marketing ploy to reassure would be buyers? It is indeed “adopter beware.” In the end, the reassessments and claims now being made after four months of experiences may not be translative.
Partnerships—The Building Blocks of Innovation
As I teach innovation to aspiring entrepreneurs and enterprise teams seeking to commercialize their thought leadership endeavors, we often have robust discussions about a childhood pastime of building blocks. This then leads to disclosures on segmentations, patentability, customer demographics, and finally, adoption (i.e., how is it implemented). If implementations include customer IT groups or consulting implementation specialists, the opportunities and value add reside with individuals and organizations who will not have the same passion and level of expertise as their inventors. It is a significant risk and made more complex by business models having different profit expectations and quality of service goals.
Moreover, in disclosing individual components of the innovation we uncover implicit partnerships that have been embedded as part of #SOP (standard operating procedure). Examples include open source code, layered functionality purchased or ported from outside vendors, or explicit relationships with third parties who provide value-add via touchpoints, aggregations, assessments, and specialized functionality such as machine or artificial intelligence.
Innovations being released today as well as in the future are created with explicit and implicit building blocks, which involve all forms of partnerships. These compartmentalized building blocks have wide-ranging risks, opportunities, collaborations, and downstream consequences, which are either explicitly detailed or left quietly to chance. In the end, these layers of innovation, assembled to create new products and services, have implications for the total cost assessment. Innovation today is all about partnerships and layering resulting in a comprehensively different approach to achieving revenue targets, market penetrations, sales offerings, and of course, customer adoption.
Partnerships used to create and launch innovations in the FSBO markets operate with numerous complexities embedded beneath the solution, which were easier to manage when proximity was allowed and encouraged. With most project teams meeting remotely, work performed offsite, and employees and contractors operating independently and now more than ever risk of successful execution significantly jeopardized, the granularity of partnerships is critically important—now including the very individuals who represents delivery.
As firms tout their Zoom integrations, the seamless capabilities to implement remotely using their expertise, their use of Google and Microsoft platforms to offer collaboration, there is frequently a failure to accept that everyone in the enterprise is now a partner contributing to the success of a common set of goals. As 2020 moves into the second half and budgets for 2021 are being prepared, the acceptance that employees and contractors need to be managed as partners must be factored into SOP.
Different is Disruptive Innovation at its Best?
With the onslaught of #COVID19, social protests and debates, and political fortunes, business leaders are trying to navigate and plot a course against unprecedented external environmental factors. In some cases, these events are challenging the core business models and brandings established over decades. The hope for many individuals and enterprises are to create innovations that tap into home operations, virtual retail establishments, data mining and forecasting using exploding #IoT and #5G, all which are different than their competitors while proclaiming their offerings are relevant and disruptive.
Nonetheless, will this be enough? Will being different, be good enough? And, how is what the FSBO will offer being innovatively different? Will they be able to deliver with a scarcity of employee skills and higher educational institutions barely open? Will online learning be there to augment existing workforces needed to comprehend and deliver disruptive innovations to their end customers? Questions, so many questions.
But, is that now what we are facing when we tell customers to “watch OUR space?” “We have big things coming!” “We understand your challenges and are here to help.” “We are uniquely positioned to assist with offerings and solutions that our competitors cannot match.” Really, how they will ask? Are not your competitors also trying to determine where to go from here, and do you sound similar?
You see, the divide between aspiration (i.e., the thought) and the innovation (i.e., the reality) is growing. What can we do? Just to say we are different and disruptive encouraging target audiences to “watch your space” may work for a few weeks, but what then? It was Mark Twain, that is Samuel Clemens, that said “it is not what we know that gets us into trouble, it’s what we know for sure that just ain’t so.” That is the challenge behind this section of article. To explore what we know about innovation, and to show that what we perhaps thought of innovative thinking “just ain’t so” will require a level of leadership and review that many operations during times of chaos cannot find the momentum to sustain.
Yet, to be innovative is not just being different. We are taught to be innovative (i.e., it is not in our #DNA). We must think through the innovation principles, rationale, and their implications. As the fourth industrial revolution (#4IR, see Klaus Schwab, World Economic Forum, #WEF) begins defined by rising synthetic intelligences and augmented realities, we as human beings blindly embrace innovations as benevolent. However, we often ignore the relevance and the downstream consequences.
Innovation in this time of marvel and chaos, has little to do with who you are, where you came from, your education, or even your social media presence. It has to do with internalization of principles and finding the relevance for those you are seeking to adopt your idea. The external events experienced this year will likely be a watershed moment for many enterprises. The following model provides an opportunity, during these times of uncertainty, to focus on the building blocks rather than just words.
Being different, offering innovative solutions that are unique are perfectly acceptable—they just cannot be mere window dressing on top of a commodity offering.
In closing, there are positive and negative reasons (and I know my inclusion of this individual will have both), especially today, to quote a historical figure. I found an obscure quote from one who stated, “Hard words are very rarely useful. Real firmness is good for everything. Strut is good for nothing.” There is an abundance of hard words and strutting in 2020, but I do not see a firmness where individuals and organizations find a balance of power and strength—at least not yet.
FSBO’s cannot strut, they cannot use hard words, they must strike a balance that maps their journey into a set of solutions that is more than thought leadership, more than an idea, and much more than a makeover of a commodity offering. FSBO’s also cannot ignore the events unfolding all around as it will permanently change their business models and every organization that does business with them.
The world of innovation is now moving to meet its surrounding external environmental surroundings. Consumers and enterprises that use your products and services expect that those whom they partner with, spend time and money with, and share their trust and thought capital with, also move in their environmental timeframes and reactionary pressures. FSBO’s will have to adapt.
In the FSBO world, implementations were previously defined in months and years—now we move in weeks to months. The reckoning of social injustice, gender discrimination, and wealth inequalities will not dissipate. FSBO’s cannot be indifferent. Every direction forward will require, via iterations of rationale and implications, unbiased innovations to aid with the ongoing changes—this transformation will not be a one-and-done aberration. 2020 will be the year that started a decade of rising leaders along with falling, familiar FSBO brands and for those enterprises who provide software, outsourcing and services.
Innovation leadership is often tested during times of uncertainty and chaos—this year brings a level few have anticipated, and fewer still effectively prepared. The reassessment for every organization will continue and the aftermath of “watch this space” will witness many brands marginalized. Will you and your company become one of those whose total cost outweighed their total benefit? How will the traditional measures and phrases of innovation adoption iterate as we move forward? Are you prepared for what comes next?
The time is now to revisit how we define costs, opportunities, and innovation adoption. The time is now to assess how individuals and partnerships should be made and managed along with the granularity of management principles. The time is now to decide if being different is enough when faced with external events that threaten corporate survivability. The time is now to forge new relationships, take the path not taken, and to listen to dissenting voices that once were marginalized both inside and outside the corporate walls. The time is now to recognize that just telling consumers to “watch this space” will never again be enough—beware.