At this month's Startup Grind London, Vernon Hill II, founder and chairman of Metro bank, shared his journey and the business wisdom that allowed him to build two banks and build his assets to £1.2 billion.
The technological explosion has meant that innovative ideas, tools, and techniques have dominated the conversation for nearly a decade. Corporations are constantly looking for ways to "innovate," but in reality all they want is for staff to do what they do but better. To become an innovative company it takes more than just telling employees to "innovate": In Vernon Hill's talk at Startup Grind he explains how to build a truly innovative, and innovating, enterprise.
"British banking tech is one step above a quill"
One of the qualities that Vernon attributed to Metro Bank's success is the IT system that is the bank's backbone. The IT system gives the corporation the edge over other financial institutions due to "British banking tech" being "one step above a quill," according to Vernon. A state-of-the-art IT system gives Metro Bank the ability to quickly analyse inefficient areas of the business and then speed up or automate them.
However not all businesses have the revenue or the resources to overhaul their IT systems, but there are still a number of innovations that businesses can implement to improve processes and the overall running of the enterprise. For example, asking questions like - What systems are in place that are out-dated or no longer useful? How can we cut down on bureaucracy? Can areas of the business be outsourced? - can identify process bottle-necks, time sinks, and ways to improve the business.
That being said, legacy technology such as; outdated computer systems, poor internet connection, or a convoluted IT infrastructure can be the cause of massive inefficiencies. The aforementioned technological explosion has also lead to many processes being automated as entrepreneurs identify ways to innovate and develop efficiency tools. For example, one tool available allows you to take a photo of a business card and then automatically adds that information to a CRM system and your email contacts.
It's also vital that you help your "legacy staff" use modern tools through training and support. A friend of mine recounted working as an office gopher for an MNC. Part of his role was to print out emails to send to all the staff because some employees didn't check their email because they didn't understand how to utilise the system properly. Through proper training and helping employees understand new or modern systems you can dramatically increase your businesses efficiency.
Dogmatic processes need to be identified in your business and re-evaluated. It's not good enough to do things because "that's how it's always been done". Look for things like unnecessary meetings that take a lot of man hours but don't directly affect the amount of revenue coming in. Meetings with no agenda, for example, or meetings with prospective partners that don't operate within your core business are often a waste of time.
"Innovation always comes from outside"
You don't need to be Google to innovate; Vernon told us "We can't learn from the west coast, the capital over there is on another level." However he also said that "innovation always comes from outside". Bear in mind we're not suggesting you call in expensive consultants to help your business, what we are suggesting is that to innovate you must think outside your normal parameters. Being innovative is about being creative, and like most things, creativity is a learnable skill.
Creativity doesn't come naturally to everyone, so to develop that skill, try changing your normal problem-solving processes:
- Try different problem solving methodologies (Wikipedia has a list to get you started) )
- Question your perspective by asking questions such as "How would I view this as a [another company role]?" or "For what reason do I think this?"
- Try brainstorming with the caveat that the business has unlimited resources
It is also worth opening the discussion to the rest of the business; if the cliché "two heads are better than one" stands true, what about 10 or 50 heads? Fluid communication with all aspects of the business is a technique used by most of the "innovative" enterprises you read about in the news.
Similarly, having an informal meeting outside of the office can also lead to innovative breakthroughs. Next time you have a problem that needs to be solved try taking a small team to a café or pub to discuss the issue. A different environment and informal setting makes staff less afraid of failure and encourages a less "office-y" mind-set. Make sure that if you shoot someone's idea down you either look for a way to improve that idea or come up with one yourself, otherwise you discourage creativity and the free-flow of ideas.
"If you have the right idea and right drive you'll have an easier time against institutions"
Innovation doesn't have to be ground-breaking to make a difference. Often the most successful businesses simply do something slightly cheaper, faster, or better than their competitors. This boils down to having enough market knowledge to know which innovations would maximise your businesses advantage.
Complete a SWOT (strengths, weaknesses, opportunities, threats) analysis of your competitors' products or services and innovate to solve any of their weaknesses. Similarly you could arrange a meeting with your current clients to discuss future trends, features that they'd like implemented in your product, and areas they'd like your business to improve in (such as customer feedback, response times, overall engagement, and so on) .
Another way to innovate your industry is to take lessons from other industries and sectors. For example Vernon took lessons from the retail sector and applied them to banking to create a unique and innovative bank. Similarly you could incorporate Pixar's "going from suck to non-suck" philosophy and translate the lessons they learned from making films to product development.
"Put your head down and get to work"
Different business models, philosophies, and business structures work for different businesses; there is no set way to successfully innovate. By exploring the new technology, trying out different problem solving techniques, and culling inefficient processes you can innovate your business and get ahead of your competitors. Bear in mind that you can talk about "innovation" until you're blue in the face, but unless you "put your head down and get to work" (as Vernon would say) testing, and trying out new innovations you'll keep spinning your wheels.
In part one of the series Vernon Hill shares how to create a powerful business model in just a single sentence, and in part three he discusses Apple's secret to success and explains how he used it to create a bank.