Science fiction, we were told by more than one speaker at Innotribe last year, is becoming science fact. Such claims were rendered more believable by being uttered in the hi-tech, sci-fi, sci-fact, audio-visual wraparound ‘cocoon’ that was the 2016 Innotribe space.
The Innotribe programme was itself a wake-up call – a full-on, comprehensive and above all practical guide to the future: helping Sibos delegates how to work out what’s coming; how to prepare for it; and how to maximise every opportunity. There were visionaries and technologists among the speakers – and real world bankers describing their own experiences. There were presentations, discussions and workshops – and full houses pretty much throughout. Midweek, Innotribe even held its own networking event with live music.
“Innovation is a space for calmness,” said Kevin Johnson, head of Innotribe innovation programmes at SWIFT, introducing a week that would end with ‘Throwing Rocks at the Google Bus’ – the book, by author and academic Douglas Rushkoff, whose closing keynote was provocative – growth can’t go on forever, Rushkoff told us – but also reassuring. “I’m not looking towards a digital revolution here. What I’m looking at is the possibility of a digital renaissance, a rebirth of old ideas in a new context,” he concluded.
After 24 sessions over four days – ranging from ‘Emerging technologies for financial services’, through ‘Organise for complexity’ and ‘Digital ethics’, to ‘Forward compatibility’ – perhaps we did need that reminder: digital technology may be disruptive, but it also gives us the opportunity to raise our game, perhaps even to initiate a “renaissance” in our own business practices and value propositions.
Unsurprisingly ‘disruption’ was an early subject of discussion. “There is a bit of disruption fatigue these days,” John Hagel, co-chair, Deloitte Centre for the Edge, told us on Monday morning in ‘Patterns of disruption in wholesale banking’. Hagel went on to offer us his team’s practical working definition. “Disruption is a powerful new business approach that has a significant likelihood of unseating the leading incumbents in a market or industry, because the approach is so challenging to replicate,” said Hagel. To beat a disruptive challenger, an incumbent could have to cannibalise short-term revenue, and potentially write off the assets underpinning current practices. But the really hard part, Hagel stressed, is getting the mindset right. “Often, the powerful new approaches require leading incumbents to question some of their most basic assumptions about what’s required for success,” he said.
Disruption isn’t just a series of one-off stories about overthrowing the old order; its patterns repeat across industries. A common motif is that disruption favours the brave. “Once you get to critical mass in a network effects business, it is extremely hard to be a fast follower. That role is becoming less and less viable,” said Hagel. Don’t wait for somebody else to make the first move. The theme of urgency was picked up on Wednesday morning by Gerd Leonhard, futurist and CEO of The Futures Agency, in the lively (and packed) ‘The future show live’. “Technology cannot save your business if the model is bad. Wait and see means wait to die,” said Leonhard. We live in “a giant vortex of information,” he told us, and “data is the new oil.”
By this point in the week, graphic illustrations of the key points of each session were beginning to decorate the outside of the Innotribe cocoon, with many passing delegates capturing the boards on their smartphone cameras. Inside, the discussion around ‘disruption’ moved on to debate on ‘construction’. “It is not enough to disrupt; we have to construct,” said Leonhard. It is no longer enough to have “a mind-boggling idea” and “skim the cream off the top of new opportunities”. Rather, he suggested, the future belongs to those who can construct services to deliver experiences, which was no doubt a positive thought for those incumbents that have a track record in construction.
Leonhard and other speakers were keen to remind banks to recognise their strengths as well as their vulnerability to disruption. “Right now, a computer can beat the world champion at Go, but it cannot talk to a two-year-old,” he said. Technology will increase its capabilities exponentially, but we should embrace technology and not become it. “The marriage of relationships and technology is really what we’re after,” Leonhard said, pointing out that customers are loyal to the relationships they have with humans, not to their machines. Rather than automating ourselves out of the equation, we should leverage our humanity, enhancing our contribution through technology. This message echoed the comments made on Tuesday by Niels Pflaeging, co founder and associate of the Betacode Network, in ‘Organise for complexity’. “You are not the problem. Your people are not the problem. The problem is the way we organise work,” he said.
That said, one key problem arises from our view of others, according to Pflaeging. We tend to view ourselves as ‘Theory Y’ people, creative and prepared to love our work, whilst categorising others as ‘Theory X’ people, who dislike work and have to be coerced to perform, he said, referencing the work of management theorist Douglas McGregor. “We created organisations for the way we imagined people were”, said Pflaeging, who argued that centrally managed structures are no longer fit for purpose and cited Sweden’s Handelsbanken as a successfully decentralised organisation.
From here to there
If we need to (re-)organise for the future, what is the most effective way of getting from here to there, and what structures, if any, will serve banks and their clients best? These questions were taken up on Tuesday afternoon in ‘Situational awareness maps’ and on Thursday morning’s ‘Forward compatibility’ session. On Tuesday, Simon Wardley, a researcher from Leading Edge Forum, a global research community (as well as self-styled industry and technology mapper, and destroyer of undeserved value) outlined a methodology for mapping every aspect of a situation at a given moment.
If you play chess without being able to see the board, for example, you are in a “low level situational awareness environment”. This means you might develop theories as to why your opponents keep winning, but you won’t win. Just as a chess player needs to see the board, so a business needs an accurate and comprehensive map of its situation (rather than a management theory, for example). “With a map, we can start to anticipate forms of change,” said Wardley, pointing out that change is rarely linear.
The core thrust of Innotribe at Sibos 2016 may have been about helping banks to change inside to ensure they can deliver value in a technology-fuelled future. But it also reminded us that changes are still taking place; new challenges continue to arise. Winners of the year’s Innotribe Startup Challenges for Latin America and for Africa were given a platform to explain what innovation looks like in their respective regions, while participants in Innotribe’s Industry ‘Challenges on Securities and on Compliance’ highlighted how innovation had been applied to meet specific industry needs.
Make them all rich
Meanwhile, Bruce Schneier, CTO at Resilient, an IBM company specialising in cybersecurity solutions, discussed changes in the nature of cyber-security threats arising from the emergence of the internet of things, which he describes as “a world-sized robot”. “Interconnected systems give attackers ways in that we haven’t even considered,” he said, before offering a solution that aligned neatly with the week’s over-arching themes on the value of the human element and the need to rethink the way we organise. “What works in security is lots of smart people looking at the code. So hire smart people or make it public and have lots of people look at it – that works if smart people care enough to look at it,” he said.
And finally – the closing keynote. Rushkoff’s core assertion – that the perpetual pursuit of growth above all else was becoming increasingly counterproductive – may have been hard for some to accept. His closing message was only a little less so: “The mantra for every business and every bank,” Rushkoff told us, “should be: make them rich. Make your suppliers rich, make your partners rich, make everybody in your ecosystem rich.”