Inspiring Innovation in the Information Age

As the information age continues its ascension, organizations must innovate new products and services that meet society’s frequently changing technological needs – especially in the financial industry. Credit unions must constantly differentiate themselves from the pack to attract and maintain membership levels. From mobile banking to artificial intelligence, financial institutions have evolved their technology strategies to adapt to the ever-changing landscape. According to a survey conducted by Deloitte, “More than two-thirds [of the financial services executives surveyed] felt that technology innovation will play a key role in industry change.”

Clearly, it has never been more important for credit unions to have a framework in place that emboldens innovative thinking and problem solving. So, what principles should leaders follow when formulating an innovation-based culture?

Require Diversity of Thought

Countless organizations fail to innovate new ideas because their teams do not think outside of the box. Typically, these teams are comprised of individuals that hold similar if not exact viewpoints and cognitive biases. Consequently, the chances of common group errors, such as groupthink, occurring are amplified drastically. So what preventive steps can credit union leaders take?

Put simply, leaders should require diversity of thought.

First, leaders must accurately analyze their employees’ knowledge, skills and preferred thinking styles. A variety of tests, such as the Myers-Briggs Type Indicator, can be utilized to gather the requisite information.

Second, leaders must compose their teams based on the goal of achieving as much diversity of thought as possible. Legendary NFL football coach Bill Walsh put it best: “If we are all thinking alike, no one is thinking.”

Embrace Conflict

Many leaders fail to promote diversity of thought because they fear handling potential conflict situations between team members. Innovative leaders do not act in this manner. Rather, innovative leaders, according to the Harvard Business Review, “fight harmony, inject … tension into [their] teams and organizations, and embrace a moderate amount of conflict.” Through disagreements, team members will “be forced to explore the pros and cons of each [person’s] approach and ideally find the best solutions.” In addition, it stated, “Teams that are able to engage in productive task conflict – expressing disagreements, negotiating between different views and working under a certain amount of tension – tend to be more innovative.” Leaders have to be willing to simultaneously encourage and embrace conflict amongst team members to allow for the production of innovative ideas that can potentially give their credit union a competitive advantage.

Encourage Terrible Ideas

As noted by Professor Adam Grant of the Wharton School of the University of Pennsylvania, “One of the best predictors of the greatness of a classical composer is the sheer number of compositions that they’ve generated. Bach, Beethoven and Mozart had to generate hundreds and hundreds of compositions in order to get to a much smaller number of masterpieces.” To find your credit union’s great “composer,” you must be willing to create a culture that promotes continuous idea generation – no matter the quality of ideas. Your teams should live by the mantra, “There is no such thing as a terrible idea.” Professor Grant stated, “Your first 20 ideas are actually less creative than your next 15, and if you want to max out on creativity you actually need 200 ideas on the table before you hit the highest point of novelty.”

While 200 ideas are a bit excessive, the underlying theme is spot on. You must commit your credit union to generating a significant amount of ideas per session to ensure the most innovative and creative concepts are revealed. Only then will you continuously get Fifth Symphony-esque ideas from your employees.

Promote Continued Learning

Some organizations subscribe to the notion that innovation is something that is entirely inherited, not learned. They are just flat out wrong! In fact, the Harvard Business Review reported, “two-thirds of the innovation skill set comes through learning.” Therefore, leaders have a distinct responsibility to develop and grow their employees’ innovation abilities. One way leaders can build their employees’ innovative skill set is by promoting continued learning. Whether that means attending an industry conference or taking a class, employees should have ample opportunities to become lifelong students. Your credit union’s investment into its employees’ continuous state of learning will pay innovative dividends now and into the future.

Institute Innovation Meetings

Leaders should institute monthly meetings focused solely on how their credit union can become more innovative. However, instead of exclusively generating ideas while in the room together, employees should be required to generate all ideas independently before the meeting. This strategy will ensure that everyone’s voice is heard and considered during the meeting rather than “some members dominat[ing] the conversation [and] others hold[ing] back to avoid looking foolish,” the Harvard Business Review stated. Again, it is your job as the leader to create an atmosphere that encourages and welcomes all ideas. These meetings will quickly show whether you are successfully cultivating an open, innovative atmosphere.

Overall, leaders must institute organizational policies that prioritize innovation and creativity amongst employees. Through the promulgation of diversity of thought, credit unions will reduce the chances of groupthink seeping into its teams as well as the stagnation of creative ideas. Leaders should encourage their employees to generate as many ideas as possible to ensure that the most innovative are unveiled. Furthermore, leaders should promote continued learning among their employees to help grow their skill set. Lastly, innovation meetings will give all your employees a forum to present their ideas as well as provide your credit union with a comprehensive list of concepts that could fundamentally alter strategies and processes.

By creating an innovation-based culture, credit unions better position themselves to adapt to shifting industry norms as well as society’s rapidly-changing technological preferences. The above principles will help inspire an innovative culture within your organization and help ensure you do not become another feather in the cap of Schumpeterian creative destruction.

Robin Kolvek is CEO of EPL, Inc. He can reached at 205-408-5300 or robin.kolvek@epl.net.