For what seems like more than a decade, confidence levels in the country in the corporate sector and the public alike were on a seemingly never-ending downward spiral. It’s been a slump interrupted only by bouts of positivity around the latest Springbok victory or a good Bafana Bafana performance.
We are heading towards 200 days of no load-shedding, and the rand has strengthened almost 10% over the past 12 months, bolstered by lower inflation pressures and locally that have spurred hopes of aggressive interest rate cuts. The government of national unity has ushered in an unexpected wave of potential for improved governance that has global investors looking towards South Africa. I don’t believe this surge in hope has skipped corporate South Africa, and with optimism come investments and an appetite for new products, services and solutions.
But what ingredients are necessary to ensure new solutions are impactful and add value to an organisation and its clients? More specifically, how can levels of commercial ideation be maximised, and what is the best way to deliver new propositions?
First, it is my experience that without intentional interventions by the leadership core, innovation in incumbent organisations is not usually a natural occurrence. People are usually hired to fulfil specific established roles. This situation can be contrasted with that of a typical start-up business.
There is a long-standing dichotomy between the start-up and the incumbent. Start-ups, for the most part, are incentivised to find gaps in the market. To be successful they need to develop solutions that aren’t offered by existing businesses or are dramatically better than what is already commercially available.
While start-ups are nimble and can deliver solutions quickly, they have shoestring budgets and typically take time to deliver at scale, often running out of cash in the interim. Larger corporates have stricter processes necessary to protect stakeholder deposits and investments. They have a complexity that means creating and implementing solutions takes much longer, but their ability to scale is typically far better, given their existing client base.
Accordingly, what would seem to be the perfect solution is a partnership between start-ups and incumbents. However, that is not always the case — sometimes owing to cultural differences, sometimes because of technical integrations, and sometimes thanks to non-obvious product market fit based on customer demand from the relevant institution.
Having worked for some of the country’s largest corporates, where I have seen partnerships both flourish and fail, another middle ground exists — the incumbent entrepreneur or intrapreneur. I have seen this concept evolve in several ways, from management driving the overall corporate culture by incentivising and recognising people for pushing beyond the borders of their jobs to instances where teams are established to focus on new value creation. Either way, the most successful corporate intrapreneurs are those that have a start-up mindset, but with the patience and foresight of a large incumbent executive.
During my seven years heading up Standard Bank’s Moonshots team, we’ve identified some crucial ingredients to achieving a high level of success in the bank that may have application for others.
A critical element is getting organisational buy-in. It’s essential in delivering solutions through existing channels and achieving scale. This isn’t simply the process of securing the backing of a top-level executive , but rather getting the broader organisation to believe in the merits of the team driving this objective. Buy-in "where the work happens" is essential, as this is the best way to get priority and focus when it comes to development and scale.
Another ingredient for success is being clear about a problem that will have a material impact on the business when it is solved, both for its clients and the business. Finding a problem typically isn’t hard — in every organisation, there are always people who are masters at explaining to you what the problem is, and then saying why something can’t be done. This becomes our playground: great ideas are often thwarted by fictional barriers or capacity constraints. Our role is to understand what the real barriers are and find a balance between having a positive, progressive mindset and being realistic and understanding about what can be achieved within a given time constraint or commercial objective, while also being able to set up a team to execute the idea.
In our world, we do not consider ourselves "innovators" but rather "problem solvers". This distinction is important and has defined our operating model. Where innovation is needed, we will do it, but where it’s not, we will find the optimal solution considering delivery times, costs and other reasons that may make adoption impossible. In my experience, in many cases the "obvious" answers are those that win over the most "innovative".
• Epstein is executive head of Standard Bank Personal and Private Banking Moonshots
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