Building a culture of innovation – Part 1

Building a culture of innovation - Perspectives on Leadership and Innovation

Innovation and digital transformation are buzzwords that are often used in organizations, but developing a culture of innovation takes time and effort. Steve Monaghan, the first Chief Innovation Officer at DBS Bank, shares his experience on how they started their innovation culture. He emphasizes the importance of a shared language and communication, as well as starting with learning and venturing before investing in capital. He also highlights the misconception that the number of people in a team drives change, when it is actually the number of people engaged. By flipping the traditional model of capital, venturing, and learning, they were able to transform customer experience and positively impact the organization.

Key Takeaways

  1. Developing an innovation culture takes time and cannot be rushed.
  2. Shared language and effective communication are essential for fostering innovation.
  3. Engagement, not team size, drives change and innovation.
  4. Flipping the traditional model: Start with learning and venturing before investing capital. Experiential learning is powerful in driving innovation.
  5. Focus on continuous improvement, learning from initial steps, and purposeful application of technology.

The Conversation

Tom: Steve, thanks for joining me today. I wanted to have a conversation about cultures of innovation—what works, and how to get them started in organizations. So I think we hear the word, “digital transformation”—we hear the word “innovation” batted around a lot. Can we talk about the origins of innovation because you were the first Chief Innovation Officer at DBS Bank, and how did that get started? Can you give us a little background of that?

Steve: Yeah, sure. The answer to how it got started is, “slowly.” If I was to sum it up into one word, that would be it. And the reason for that is that, you cannot start a culture of innovation immediately. By definition, a culture takes time to develop and evolve.

And there’s often this misconception that people talking about “you’ve got to create an agile culture” or “you’ve got to create an innovation culture,” but what you’re really dealing with is the actual culture of an institution. And then you’ve got to break apart what a culture is.

So, one of the early lessons that I discovered at DBS was that if you didn’t know, K-N-O-W, then the only answer was going to be “no.” And the reason for that is unless you had a common language, unless you actually understood the basics about the things that we’re about to embark on, your only responsible answer as an executive was, “no.”

So, I’ll use the Chinese saying; it’s called “jī tóng yā jiǎng,” and forgive the mispronunciation, but what it means is “Chicken talk with duck.” Both lots of squawking, but no understanding. And I think that that was really my first experience at DBS. Here I am speaking my language of innovation and there was absolutely no comprehension on the other side of the fence as to what that meant. So, all cultures start with some degree of shared language and ability to communicate.

And I think that’s really the first foundation that needs to be laid.

Tom: You started out with a really small team. As I remember, you only had three or four people in the mix when you first started, right?

Steve: I think yes. And I hired one soon thereafter. And so we were, including myself, we were a massive team of six.

So, change is not driven by the number of people that you have in a team. It’s driven by the number of people you engage. And so the first thing was, how to get a multiplier around that. And I think you’ve actually covered off the most important thing because there’s an expectation that you’re going to get immediate results by creating magic, you know, “technology magic.”

And that’s driven by the fact that the way technology was dealt with inside large organizations and still is in many countries around the world, particularly in this country in Japan, is they tend to get enamored with the technology. And they buy technology, and then they try to work out how to use it. And then they find it’s not really fit for purpose.

And we’ve seen that at a national level here in Japan recently with the failure of a number of large projects which have spanned, in some cases almost multiple decades that were all about embracing new technology and delivering to market. But they never really understood what lay behind. So that model of: capital, then venturing, and then learning had to be displaced.

And one of the great things that I had as an advantage for me was the ability to work with you in HR in talent and learning, because learning is the place to start, not the place to finish.

So usually it would be that you would spend capital, you would try to test something and make it work. And the learning was, well, it didn’t work. Let’s not do it again.

And so i was armed. As you might also recall, with this massive budget, a couple of hundred thousand dollars. And so the first thing we did was get people engaged around understanding the tech, understanding prototypes and getting their hands on it, including the CEO, who once they managed to see how things actually transformed and customer experience transformed, actually started to become very positive about the potential of what lay ahead.

So we flipped that model to: learning, venturing, and then capital. And I think that that’s a big difference versus many corporations even today, that start with capital and create these huge budgets and then don’t get the result they want.

We did the opposite. We started with something small and then learned, pulled together the learning through venturing—and experiential learning is the most powerful form of learning—and then using capital to scale, not vice versa.

And one of the things that I see in Japan is they tend to create these massive budgets, but they never actually make any progress against them because they’re trying to get 100% solved when the most important thing is getting the first 1%.

How do you take that first step? How do you learn from it? How do you continue to build upon it, reuse it, all those sorts of things. And that’s how technology works.

About the podcast

“Perspectives on Leadership and Innovation” is a podcast hosted by Tom Pedersen, Founder and CEO of BentoBox Innovation.

With special guest Steve Monaghan, General Partner, KK FinMirai.