Achieving the Innovation Mindset

On Tuesday morning at the FNBB Summer Conference, I delivered a keynote on achieving the innovation mindset.  I hope you were there to hear it in person, but if not, I am going to summarize the talk in this blog post.  I started off by saying that innovation might just the panacea your institution needs for 2022. After all, the conference attendees had heard several presentations by leading economists and banking experts and most of the information shared was not overwhelmingly positive. It is likely that there are some difficult times ahead for bankers, but this might be the very galvanizing opportunity you need to effect systemic change at your institution.  To achieve the innovation mindset, you and your organization must:


  • Accept that innovation is crucial to future success
  • Acknowledge that innovation will not organically happen
  • Actively work towards achieving an enterprise-wide innovation culture


Only when you have decided that innovation is a “mission-critical” component of your organization’s everyday culture, and further take action to make innovation happen, will any true culture change take place.  Reminder, this is a long term strategy; you will not achieve any meaningful results overnight and it is the bane of our existence that as bankers, we tend to give up on things too quickly if we don’t see short term results.  Make the decision that innovation is important, come up with a plan to make it happen, and then stick to it, even if it takes years to fully root into your organizations fabric.


Speaking directly to the CEOs and other CSuite representatives in the room, I challenged them there were 4 things needed to make innovative a reality; desire, action, support and removal of barriers. Let me briefly address each of these:


Senior Management Desire for Innovation – I have never seen systemic innovation sweep through an organization where the senior leadership was not behind that occurring.  In fact, it’s the other way around: when people know that the CEO or other CSuite executives are NOT behind innovation, no one will even try to innovate.  Even the board can send signals that it wants to operate the bank “business as usual”.  While there is comfort in not making radical changes in how we provide financial services, I truly believe that this is no longer an effective strategy that will enable a community bank for future success.  For innovation to work, the hierarchy of senior leadership which includes the Board of Directors, the ENTIRE CSuite and the extended senior management team must be onboard for innovation.


Innovation must be important enough for you to put blood and treasure on the line. I use the term blood and treasure in the sense that in medieval times, a king would have to decide if fighting a war was worth the loss of life and depletion of the treasury.  How important is innovation to your institution? Are you willing to commit blood and treasure to achieve it?  Making innovation systemic begins when you have incorporated innovation into your strategic initiatives, when it shows up in your core values and periodic meetings and all communications have an innovation element included.


Taking Action to Spark Innovation – Once you have decided innovation is worth pursuing, then you must take action to achieve an innovation mindset across the enterprise.  Here are several components that should be included as action steps:

  • Include innovation in corporate communication – when speaking to or writing an email to employees, recordings that get delivered to customers or postings on social media. How likely is innovation and innovative activities mentioned? Talking consistently and often about the importance of innovation will get the idea across to all stakeholders.
  • Provide education / modeling of ideation / brainstorming – just because you want innovation to happen doesn’t mean anyone knows what to do to achieve it. You need to model the behavior you want by hosting education sessions, conducting workshops and generally creating the structure around which your employees can build on for the innovative mindset.  Don’t fret if you feel you do not have the expertise to do this in-house. There are plenty of resources available that give your innovation program a jump start.
  • Emphasize the importance of small process innovations. Perhaps the biggest mistake I see when an organization is trying to get innovation going is not setting the bar low. By limiting initial innovations to smaller, often process type innovations, you do two important things; (1) you show everyone how to model doing innovation right and (2) you get small initial wins. Tackling large innovation initiatives right out of the gate is likely going to generate frustration and cause people to scrap the process altogether.
  • Praise all innovation attempts – this is often hard for leaders who feel that they must offer praise for ideas that they truly don’t feel are worth praising. I agree!  Clearly, not all ideas are worth implementing, but all ideas are worthy of praise.  Praise the effort of innovating, not the idea.  It’s a volume game, you need 30+ ideas to get one good one and so keep praising those that are coming up with ideas, even if they’re not good.  Hold out special praise for true “out of the box” crazy ideas.


Supporting Innovation – There must be specific things that you do to further indicate that you and the whole organization is fully behind the innovation effort.  Let me offer just a few examples:

  • Allocate time for thinking / ideation – don’t penalize those that work individually or collaboratively to brainstorm ideas. They are not goofing off. They are working on creating ideas and ideas (remember, even the bad or crazy ones) are valuable.  Invest in this activity.
  • Offer incentives for ideas – Perhaps you could have a drawing each quarter for a $100 gift card for anyone that has offered up an idea. It doesn’t have to be a lot, but it shows you are putting “treasure” behind the innovative effort.
  • Put real teeth in your innovation effort – One sure way to motivate people to embrace innovation is make it a part of their annual review. If someone’s salary increase and/or bonus is predicated on their exhibiting an innovative mindset over the previous year, how quickly do you think they would adapt their behavior?


Stop Limiting Innovation / Ideas – Many organizations limit innovation and do so unintentionally.  Here are some scenarios where you could be thwarting innovation:

  • Unsolicited ideas can lead to dissatisfaction – Let’s face it, there are always some employees that will offer up ideas. They may not be sincere or have completely thought through ideas, but when nothing happens this leads to dissatisfaction. These employees will be the very ones that grumble and tell everyone that “nothing good will happen; no one will listen to your ideas”.
  • Senior leaders asking questions – A casual conversation leads to a mid-level employee sharing an idea with the CEO. The CEO asks a series of follow up questions honing in on aspects of the idea. The CEO believes their questions are an indication they are interested in the idea, but the employee walks away and thinks the CEO rejected their idea totally.  I have seen this happen many, many times. Just know that when you are a senior level executive, people treat you differently, regardless of the effort you make to make everyone treat you the same.  Stop asking questions right out of the gate and just praise the ideation effort.  Instead of, “Have you thought of how this or that might work”? say something like, “Very interesting, how awesome that you came up with this idea”!  Praise the idea process and let the idea itself sink or swim as it works through your innovation process.
  • Brainstorming facilitator gives negative vibe on idea – I talk about this often. A senior executive is facilitating a brainstorming session, someone offers an idea and the facilitator throws up all over the idea. Then, they can’t figure out why no one else will offer any ideas.  If you are not prepared to facilitate brainstorming sessions right, just don’t do them.
  • Not all senior leaders onboard – Amidst your best efforts, it is possible that some in the organization who are not supporting innovation turn out to be members of the senior leadership team. At the very moment you find out that one of your leaders is a “nay-sayer”, you have to stomp all over that manager … hard.  There is no place for those that would smile and agree with the innovation plan in the strategic planning meeting and then turn out to be tanking innovation at every opportunity.


FNBB’s Innovation Mindset – I’m proud to say that FNBB has made a blood and treasure commitment to Innovation. To make innovation a part of our enterprise-wide culture, it has:

  • Hired me as Chief Innovation Officer;
  • Provided company-wide education and workshops;
  • Invested in the creation of a “thinking room”, a specific place where creativity and brainstorming can occur;
  • Supported innovation across the entire senior leadership team and board of directors;
  • Approved the creation of a formal plan for idea formation, idea submission and idea evaluation process. This is a customized process I created specifically for FNBB. It allows for me to work with individuals and groups within FNBB to shape ideas and fully investigate potential ideas.  Ideas following this process will be thoroughly vetted, be complete with all relevant information and address the questions a CEO would likely be asking.


How Can I Get Started? – I realize that getting an initiative started from scratch is really hard.  Here is a quick start guide that will assist you in getting this process started:


Step 1 – Follow the Desire – Action – Support – Remove Barriers process state above

Step 2 – Pick a topic that is strategic to your institution as an initial innovation focus

  • Possible topics could include Faster Payments, Generational Banking, Attack on Overdraft Fees

Step 3 Develop ideas – Let’s assume that you chose to use Overdraft Fees as the target of your initial innovation effort.  Here is a framework for how you might structure ideation around this topic:

  • Data Gathering – Assign different employees to research all that is going on right now related to overdrafts. State and national rules / regulatory changes, what is being written in regional and national publications, etc.
  • Competition Intelligence – What are the competitors doing? Who is reducing / eliminating OD fees? Reminder that national organizations that advertise in your service areas must be considered even if they don’t have any branches in your footprint.
  • Brainstorm Overdraft Fee Changes
    • Explore Truly Crazy Ideas – make sure everyone knows that the crazier the idea, the better. Make a game out of it if necessary.
    • Changes to how ODs are Codified / Charged – After reviewing the competitive landscape, it may be possible that you might make some changes in the amount and manner in which overdrafts are charged
    • Rethink how overall charges are assessed – Maybe an examination of overdraft charges gets you thinking about fees more generally. I am a big fan of moving away from the 4 Letter F word – FREE and converting programs from punitive fees to the equivalent of “in app” purchasing.  You will find a recent blog post of this topic in the blog post archives.
    • Consider revenue replacement – at the end of the day, traditional overdraft fee’s time may have passed. If so, then it’s not too early to be focused on replacing your OD revenue with something else.  It is likely that you have programs that have been working on “auto-pilot” for many years that represent an option for enhanced revenue.  Search out revenue “hiding” in other services, for example, your existing debit card program.


The effort to achieve the innovative mindset will not be straightforward.  You might have to start off on path “A” and realize that you need to pivot here or there to get to the endgame.  Don’t get frustrated with the bumps in the road in the innovation journey, it literally means you are learning how innovation will become a part of your organization’s culture.  Remember that innovation will never happen if failure is not an option.  Failure will lead to understanding and wisdom.  Embrace the journey and regardless of what transpires, figure out how to have fun.