Comments
Risk Taking Is Essential for Innovation
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Byurcan
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Byurcan,
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8/13/2014 | 9:49:38 AM
Re: Innovation
It's a delicate balance, but one that must be figured out....
MickSimonelli
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MickSimonelli,
User Rank: Author
8/11/2014 | 3:19:37 PM
Re: Once burned ...
KBurger, I think it can be learned but is very difficult to "teach." I've found that traditional "teaching" methods like speakers, courses, and instruction arent very effective. You need more experiential and cultural methods to make it stick. i.e. An innovation day produces good feelings, and causes leaders to feel positive about innovation. But then they go back to their normal routines and perform the same incremental functions in the same way. To really move the needle, you have to change their incentives, provide innovation performance objectives, dedicate time and $$ earmarked for innovation, reward some disruptive activity, and do other such behavior changing tactics. Its not easy in financial services but (if successful) the gains are incredible. Mick
KBurger
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KBurger,
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8/11/2014 | 2:05:00 PM
Re: Once burned ...
I wonder if that is something that can be learned/taught, or it depends on a more inherent "born with" point-of-view and mentality. I guess that's also one of the motivations for hiring outside the industry (tho that's not a guarantee). What do you think?
MickSimonelli
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MickSimonelli,
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8/11/2014 | 1:45:42 PM
Re: Once burned ...
Amen. Modern leaders need to be ambidextrous--able to manage the day to day operations on the one hand while also taking some calculated risks for innovation on the other hand. 
MickSimonelli
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MickSimonelli,
User Rank: Author
8/11/2014 | 1:42:52 PM
Re: Once burned ...
You are sooo right! The "innovations" of the financial crash really set back most banking and investment firms. I think the nuanced understanding of how innovation can help (that you mention) is there again, but most leaders are doing well enough without taking risks. However...risk aversion in this hyper innovative environment isnt going to carry most companies through their strategic horizon. Mick
Kelly22
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Kelly22,
User Rank: Author
8/8/2014 | 5:19:58 PM
Re: Innovation
Good point, Jon. There is a "right way" to fail, and that's not a lesson easily learned.  Firms have to balance the right amount of risk so they can afford to fail while learning from the experience and not causing too much damage, and that's definitely tricky. Those that can figure out that balance will undoubtedly stay ahead. 
Byurcan
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Byurcan,
User Rank: Author
8/8/2014 | 3:07:54 PM
Re: Innovation
Indeed, it takes practice and experience to do innovation the right way.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
8/8/2014 | 2:48:47 PM
Re: Innovation
There's a lot of skill in learning how to fail the "right way" though, and it takes experience to gain that skill. And it takes a willingness to take risks to gain that experience to begin with. Some banks are way ahead of others in terms of gaining that skill and experience, and I think that will be a huge competitive advanatge for them down the road.
Byurcan
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Byurcan,
User Rank: Author
8/7/2014 | 10:28:32 AM
Innovation
Good points, as they say "nothing ventured, nothing gaines." You have to be willing to fail to be a true innovator.
KBurger
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KBurger,
User Rank: Author
8/6/2014 | 2:48:58 PM
Once burned ...
You have really gotten to an essential dilemma for financial services companies, Mick. I think many organizations believe there must be a trade-off -- they want innovation and growth but don't want to assume the related risks, and believe it must be one or the other. Also, there are some very bad precedents in recent history where what was touted as innovation was irresponsibly risky (subprime mortgages, CDOs, Enron ...), and the fallout gave innovation a bad name. If there can be a more nuanced understanding of how to take the right kind of risks and how to innovate with accountability, that could really benefit many insurers and other financial institutions.


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