“Nothing stifles innovation faster than thinking that you already know it all.”
That’s what Harvard Business School Professor and author Rosabeth Moss Kanter posited in a recent Wall Street Journal column. Too often, she argues, companies retreat to old ideas, as opposed to thinking outside of their own four walls (literally and figuratively) to drive innovation.
We at Traction Technology are fortunate to work with many progressive, forward-looking companies. Too many others can’t get out of their own way.
That’s why the creation of Marcus by Goldman Sachs is so interesting. The online consumer lending business launched in October 2016 and now boasts more than $5 billion in loans and more than $55 billion in deposits in the U.S. and U.K.
Sure, many investment banks also have consumer offerings, but Goldman approached it by putting extreme focus on two critical ingredients in any modern-day innovation initiative: culture and the customer.
Boe Hartman, who led the technology charge in building Marcus, spoke to me recently about the most important lessons he learned in the process. What looms large is that building Marcus wasn’t reinventing the wheel. It was more digital invention--but a digital reinvention for the bank as a whole.
That required some very careful considerations around culture, particularly in thinking about how to imbue a new culture within the storied bank. It also necessitated serious due diligence around potential customers’ needs. He details both--as well as other key lessons--in my CIO.com article linked above.
Hartman understood what Kanter spelled out in her WSJ opinion: That even though he had years of experience in consumer banking and technology, he didn’t know it all. Nor did Goldman. So he took critical steps to thinking outside the box--outside of Goldman’s tradition--to deliver a successful new business.
Here’s Hartman on how they approached culture:
At Goldman Sachs, Hartman knew that building Marcus would redefine the firm’s comfort zones and what it looked like to deliver digital solutions at a 150-year-old institution. When he sat down to discuss the strategy with Harit Talwar, the partner in charge of the consumer push, Hartman asked one question: "What kind of culture do you want?"
The ensuing dialogue was not about what it took to build a great product. “We spent that time discussing the facets of the culture that we wanted to be part of,” Hartman says. “Not what we wanted to create, but what did we want to be part of? We wanted to be part of something bigger than ourselves.”
And equally important, how they sharpened their approach to customers:
The team behind Marcus began with a strategy: The new product — the first in a broader consumer-facing vision — would be an installment loan. To ensure they were pursuing the right path, the team conducted 10,000 interviews with consumers. As it turned out, potential customers felt more strongly about “removing the shame of debt,” Hartman says.
By learning consumers' pain points they were able to build a better product. “We walked in thinking one way,” Hartman says. “We walked out of that completely thinking differently.”
That’s a trap Hartman says many organizations run into early in digital transformations: Assuming what the end result will be without enough thinking about what the customer actually wants and why.
What’s your plan this year to drive innovation and digital transformation at your company? How are you widening your lens and exposing your teams and stakeholders to new and different opportunities?