Bridging the gap: how Fintechs and ‘big business’ can work together

by Colin Carmichael, UK Fintech Director

Everyone’s talking about Fintechs – but what does ‘Fintech’ really mean?  It’s a generic term that loosely groups a number of innovative technical organisations within Financial Services.

As the Fintech director for Sopra Steria, I believe I know all about Fintech. To me, Fintech is all about change – introducing new, fresh ideas and ways of working – and making them happen. I’ve worked in financial services across the UK, Europe and further afield for many years – and organisations of all sizes find it hard to change; the bigger the organisation – the greater the challenge. Change means that organisations have to think and act differently to introduce brand new ways of working to deliver desirable services to their customers.  The customer really is king and new products and services need to be built to their wishes (rather than the ‘old fashioned’ way of creating a product and selling it hard). What’s more, new, faster technology and access to huge amounts of data have made this issue more acute as it’s raised customer expectations. Put simply – there’s so much to think about and to do to get ahead and stay ahead.

Organisations need to keep up with the very latest ideas – and still deliver a reliable and robust service. And it’s a fact that incorporating new technology is how they will do it. So why is it so challenging for Fintechs and big players to work together? All too often, Fintechs struggle to get their ideas to the right decision makers – and established businesses are nervous of too much change.

The biggest hurdles are often company politics, internal structures, old processes and course – the difficulty of incorporating brand new ideas into ‘old’ systems. For Fintech’s, it’s tricky to get the right contacts at the right level – and to also ensure their ideas are brought to life safely and securely.  For banks and insurers, introducing new, untried and tested ideas is hugely risky and it can take a long time – as well as effort and money to get it right.

What’s needed is a bridge between the Fintechs and the more traditional organisations – to help them to work productively together. Organisations like Sopra Steria have platforms that are at the heart of many of today’s large businesses – and they also understand existing processes, procurement and politics which often stand in the way of getting things done. By working together, Fintechs, established players and platform organisations can listen to and learn from each other, in order to fast track innovation and get the results they need – quickly and cost effectively.

So, my advice to banks and insurance companies as well as the Fintechs is to work and collaborate with a platform provider from the start. Fintechs can safely test and prove their worth in ‘virtual factories’ using real systems and data – and financial organisations can be confident about bringing the best and brightest ideas to market without huge risk. It puts new Fintechs in touch with established players – and accelerates change. And that’s what we all want.

So, maybe, we shouldn’t be using the term ‘fintech’ to refer to just new and upcoming technology companies. After all – aren’t we all Fintechs? Perhaps instead we should be focusing on partnerships and collaborations between new technology companies, established organisations and the role platform players have to accelerate change.

It really is true. It’s not what you know but who you know that makes all the difference.

Finding 10,000 ways that don’t work: what government can learn from business

Failure is not something to be embarrassed about. As Thomas Edison said about his many attempts at creating a lightbulb, “I have not failed. I’ve just found 10,000 ways that don’t work”. Then, of course, he found a way that did work and that is all anyone remembers.

Our government today is too often paralysed by fear. Taking risks is viewed as reckless because civil servants are afraid of getting criticised should a project stumble. Nobody wants to face the fury of the Public Accounts Committee.

But among entrepreneurs, failure is more like a badge of honour. It is proof that you were not afraid to push your limits. In fact, some tech companies will not hire people if they are unable to point to at least one great failure. Steve Jobs is the most remarkable example of this phenomena. He co-founds Apple Computer when he is 21, and by the time he is 23 he’s a millionaire. He becomes legendary. And then, at 30, it all comes crashing down.

We need more of this entrepreneurial mind-set in government. And we need public sector leaders to create the conditions for it to flourish. If somebody starts a company and fails then they start another company. If that person is smart and humble they learn the lessons. Jobs wanted to prove his early success at Apple was not a fluke. He launched a new computer company, NeXT, and also Pixar Animation Studios. I love Pixar movies!

In 1996, a struggling Apple acquired NeXT, returning Jobs to the company he helped to create. And the following year Jobs became Apple’s CEO, driving the company to its greatest successes, from the iPod to the iMac to the iPhone to the iPad.

It is too commonplace to blame the blunders of government on civil servants and other public servants. Yet the way our public services are currently structured means success is rarely defined as achieving results. Instead it is about keeping your head down, putting in the hours, and not breaking the rules. Process dominates and outcome is secondary.

In business, of course, the outcomes always has to be first. Because if you do not make enough money then your business dies. Anyone who has run a small business knows the feeling of having to innovate to survive. In those moments people come up with some of their best ideas.

I am not suggesting that government should be run like a business. Or that all politicians should act like entrepreneurs. However, we do need to take some of the elements of the best of business – being agile, networked, innovative and willing to take calculated risks. And making mistakes. And incorporate them into government. Given how fast the world is changing it is the only way government can keep up.

Nobody put this better than Steve Jobs in his speech to Stanford graduates in 2005 (two years before he launched the iPhone).

“I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter into one of the most creative periods of my life.”

What do you think? Leave a reply below or contact me by email.

STEAM not just STEM: how can we encourage more creativity?

Creative ideas take time. They are often generated after an initial period of thinking deeply about the problem, considering different ways to frame the problem, and exploring different possible solutions. Sir James Dyson developed over 5,000 prototypes before he patented his vacuum cleaner. And Walt Disney animated cartoons for nearly two decades before his first big success, Snow White and the Seven Dwarves.

So how can we encourage more creativity? How can we help people, as Apple famously put it in 1997, to ‘think different’? One way is to go back and start at the beginning. With children in school. And by rewiring our educational system to focus on STEAM rather than STEM.

In recent years, as the United Kingdom has faced stiff economic and technological competition from China and other countries, there has been a surge of interest in science, technology, engineering and mathematics. It is clear that if we are to maintain our position as a global leader in innovation, we have to increase the emphasis on these four subjects in our schools.

Yet this is an area where we have lagged behind relative to other countries. We need to up our game dramatically. The UK ranks 16th out of 20 OECD countries for the proportion of people with technical qualifications. We have particular skills shortages in sectors of the economy that depend on STEM subjects. Nearly 40% of employers report difficulties recruiting staff with relevant STEM skills.

But STEM alone will not do it. We need to add an A for arts. Focusing only on the sciences is not enough to stretch the mind and encourage creativity.

Take a look at some of the most successful and innovative products produced in the last ten years. The iPhone is not simply a technological tool. It is a piece of art and a fantastic work of creative design. And the applications are more than mere products of programming. The best are feats of imagination.

The STEAM movement is already being championed in the United States, spearheaded by academics and students at the Rhode Island School of Design (RISD). They argue that the US educational system (and, I think, the UK) is still functioning in the same way it did a hundred years ago. It has the same outdated systems, institutions and traditions.

We are trying to educate eight million children via an antiquated school system. Or as the academics at the RISD put it,

“Schools were, and still are, structured like the factories they were developed to serve. They treat education like an assembly line – you move from one task (class) to the next – day in and day out. There is little collaboration or interchange.”

The danger is that innovation will continue to wane. To become a more innovative economy requires the ability to seize new opportunities and adapt to change. But historically, the UK has not been as successful at commercialisation and development as we have been at basic research. We have often been slower than competitors to take up and deploy existing technologies.

Our education system tends to reward test scores and rote memorisation rather than creativity and problem solving. Our students are learning antiquated skills in a modern, and changing world. And that will be a recipe for disaster as the world continues to move towards greater connectivity, innovation and technological change.

Or, as the US secretary of education Richard Riley famously summed it up, “The jobs in the greatest demand in the future don’t yet exist and will require workers to use technologies that have not yet been invented to solve problems that we don’t yet even know are problems.”

What do you think? Leave a reply below or contact me by email.

The Government workforce of the future

Government needs talented and high performing civil servants. Yet we know that the civil service has longstanding weaknesses in key areas such as finance, commercial and digital – a key finding of our recent Government Digital Trends Survey. And recruitment and retention is challenging when cuts are made to operational costs, wage rises are frozen and posts are cut.

The recently published Civil Service Workforce Plan makes the case for developing professional skills and expertise in government. There is a commitment to open up the civil service, allowing more external recruitment and opportunities for secondments in other sectors. And the benefits of diversity, reducing the dominance of people from a narrow range of socio-economic backgrounds, is also recognised.

The civil service will need to rapidly put these plans into action, especially as it expands its professional skills and expertise to deliver digital projects at scale across Whitehall and the wider public sector.

The civil service needs the right number of people with the right skills in the right place at the right time to deliver short and long-term departmental objectives. What might be the building blocks for this?

First, workforce planning requires alignment of departmental goals and objectives and the human resources available. The workforce implications of any programme need to be considered and planned for from the outset, both in terms of any anticipated staff needs or redeployment and in terms of managing the change so as to minimise disruption and protect capacity and continuity of service.

Second, skills and competencies gaps need to be identified. This means determining the current resources and how they will evolve over time through, for example, turnover. Then comparing this with the kind, number and location of staff needed to meet the strategic objectives of the department. This assessment will determine the existing gaps in terms of numbers and competencies between the current and projected workforce needs.

Third, defining an action plan to address the most critical gaps facing departments so that human resources can support departmental strategies. The more effort expanded in stakeholder engagement during the action planning stage, including consultation with industry, the greater the likelihood of a more coordinated approach to implementation. Depending on the gaps, the action plan may address recruitment, selection, compensation, training/retraining, restructuring, outsourcing, performance management, succession planning, diversity, quality of life, retention, technological enhancements, etc.

Finally, it is also critical – particularly in fast moving sectors like technology and digital – to secure an effective workforce now and in the future. This means identifying emerging skills that can support a high performing civil service, including leveraging technology better.

Are you a civil servant involved in securing an effective workforce now and in the future? Do you think the Civil Service Workforce Plan will lead to a more sophisticated process for workforce planning? Or are you an organisation in the private sector or civil society with an innovative approach to recruiting and retaining staff? Tell us what you think by leaving a comment below, or contact me by email.

Rethinking civil service skills in a digital world

The pervasiveness of digital technologies in daily life is fundamentally changing the way civil servants work and deliver public services. Three quarters of the civil servants that responded to our 2nd Government Digital Trends Survey told us that digital was having an impact on their work.

Increasing use of digital in government is raising the demand for new skills in three ways. First, civil servants across an increasing range of professions need to acquire generic ICT skills to be able to access information or use software. Second, the production of digital services – increasingly developed in-house or in mixed teams with private sector partners – requires more specialist skills. Third, the use of digital technologies is changing the way work is carried out. Civil servants need the capability to process complex information and plan in advance and adjust quickly.

For the past two years we have asked civil servants to tell us what is being done to ensure they have the digital skills needed for their work. We found that civil servants are taking a proactive approach to skills acquisition. 32% were using self-directed study, in their own time, to develop their digital skills (an increase of 8% since 2015).

But the most startling finding of this year’s survey is the increase in the number of civil servants telling us that a lack of training is a barrier to digital transformation.

This is an increase from 43% to 53% in just one year, making it the single biggest obstacle to digital transformation in government – even more significant than a lack of resources. And 25% of civil servants told us that they had not been given any formal training for the digital skills needed for their role. Plus the number of civil servants saying skills and training are a barrier to transformation is only likely to increase as digital extends from exemplar projects to mainstream service delivery.

Our experience is that the increasing demand for digital skills presents two major challenges. First, the skills of the future are difficult to identify with certainty due to fast technological change in the digital economy. The second is how to ensure that, once changes in skills have been identified, skills development systems adjust sufficiently fast to match new demands.

These challenges demand a comprehensive skills strategy.

A skills strategy must help an organization identify strengths and weaknesses and develop policies that recruit, retain and retrain staff. This includes skills assessment and anticipation tools that are used to help prepare or plan for future scenarios.

In the private sector we are facing many of the same challenges as Government when it comes to skills. We had concerns that we lacked the real time business information required to spot outdated skills, promote staff development and recruit new skills.

To address this we asked our digital consultants to develop what became ‘MySkills’. By taking a UX-led approach we were able to create a tool that captured 1,900 skills from over 600 people in the first month. Buoyed by the success of this pilot we rolled the tool out across the wider business.

Please leave a comment below or get in touch by email if you would like to know more about our government digital trends survey or the MySkills tool.

Lead by listening

We’re taught to listen from a very early age so why, sometimes, does it feel that c-suite executives have unlearnt this? Executives in an organisation need to be seen to be leaders, to be the people that drive forward initiatives to achieve an organisation’s desired outcomes. Traditional board structures produce a hierarchical delineation of responsibility and with that often a culture of

This is what we’re doing. I’m in control. Do it.’

With every market being disrupted in some way by technical or customer culture evolution then a c-suite leader who simply dictates runs the risk of becoming detached from those they are there to ultimately serve – their customers. Yes, we could say ‘shareholders’, but happy customers usually result in better profits – which keeps the shareholders happy.

They say knowledge is power, so if we gain knowledge from listening is it such a leap to suggest that we gain power from listening?

Knowledge = Power, Listening = Knowledge, ergo Listening = Power

Accepting my transitive relation argument as correct, then if you’re a c-suite executive who should you listen to?

Fellow board members

By understanding the needs and opinions of your peers you can better understand how your decisions affect other parts of the business. This is crucial to ensuring cross-organisational alignment and reducing the risk of introducing counter-productive initiatives; tightening one guy rope on a tent can often loosen another. It’s also important not to be too protective of your domain. If a decision elsewhere could greatly affect your area of the business, but is better for the positive growth of the organisation, then perhaps embracing the change is the better option?

Direct reports

Gaining a clear understanding of the pressures that your direct reports are under (especially where those pressures have been introduced by you) will help you understand the impact of your decisions. Better still, collaborate on decisions before setting out changes – ask your reports, ‘If we do this, what’s the direct impact?’ Greater involvement in the decision will lead to increased support in implementation.

Those at the coal face

Multi-tiered management structures often hide the main causes of business inefficiency through messages of discontent or frustration, with business processes or systems never reaching those who make the investment decisions. By getting out there and talking directly to those that deliver your day-to-day business functions you’ll quickly get to the root cause of business ‘churn’ and with open encouragement be told of the little things that could make a big difference. A simple way of doing this is asking the question ‘What’s getting in your way of delivering value here?’ Do the staff need more time with customers? More training? Less policies?

Jeanne Bliss, in her book “Chief Customer Officer”, suggests introducing a “Kill a stupid rule movement” which encourages staff to identify rules or processes that used to make sense but now, as the business has moved forward, are just getting in the way. There may not be a simple fix but this type of open communication channel can highlight issues early, leading to more cost-effective solutions.

Customers

In most businesses, this is the most important set of people to listen to as to continue to be a successful organisation you need happy customers. Some organisations fail badly here by focussing on the good interactions when there is much greater value in following up with customers who’ve had a bad experience. Acknowledgement and empathy when something has gone wrong is important to get the customer to share crucial feedback – the goal is not to win them back but to listen and adapt accordingly.

Leadership today is not just about dictating from on high. It’s about creating a culture where everyone in the organisation feels that they contribute and have a voice. Time is up for the autocrat, we’re now in the time of the listening leader.

Let me know what you think. Leave a comment below, or contact me by email.

2020: The Product Owner C-Suite?

A key source of competitive advantage for digital disruptors is their ability to effectively apply Agile ways of working to deliver increasingly responsive, personalised marketing offerings. Such success has triggered a wide debate about the suitability of the “traditional C-suite” to strategically lead and shape these new forms of organisational capability.

This can be evidenced by the emerging significance of the Chief Digital Officer (CDO) as a key leadership role, the proposed re-invention of an organisation’s lead technologist as a Chief Internet of Things (IoT) Officer or even formally embedding continuous improvement in C-suite by hiring a Chief Process and Innovation Officer.

Although the maturity of these roles varies considerably (most large organisations in North America are expected to have a CDO in place within the next five years for example); they all share the same concept of C-suite defining and owning integrated capabilities that directly serve customers – something arguably not possible using its conventional functional silo structure of Finance, Marketing, Operations, HR etc.

This notion of the “Product Owner C-suite” is reflective of the disruptor’s approach to market; the use of Agile to remove barriers between senior management and sources of competitive advantage.

So what are the potential benefits of a Product Owner C-suite for an organisation? Here are some ideas…

Improved customer experience: By focusing C-suite accountability and responsibility directly on the performance and innovation of front-end products and services; frontline employees should be empowered to deliver a consistent, quality service to all customers.

Enhanced innovation/balanced risk: An iterative approach to continuous improvement, based on the rapid sharing of customer feedback between strategy and delivery teams, can enable these organisational stakeholders to adopt a more collaborative open approach to innovation strengthened by a balanced, informed appetite for shared risk.

Increased asset liquidity: Because a C-suite Product Owner has clearly defined ownership of an organisation’s resources and capabilities; he or she can make timely decisions about how these assets should be provisioned and managed – strategic decisions to procure or sell assets can potentially be made at tactical speed to drive cost optimisation.

Unique organisational learning: Although it would need to be sensitively managed; C-suite’s ability to use feedback and insights gained from applying the Agile approach “fail fast, fail often” to inform its decision making and delivery could be a source of considerable competitive advantage – a context specific, people-led learning process that competitors can’t directly imitate.

Integrated employee advocacy: C-suite can use the Product Owner role as a platform to positively promote its on-going commitment and passion to its organisation’s brand daily using marketing and social media channels. Not only does this form of top-down employee advocacy drive customer engagement, it can also intrinsically motivate employee performance.

If you would like more information about how Agile Transformation can benefit your organisation please contact the Sopra Steria Digital Practice.