Innovation is a term that is frequently used to describe fintech businesses, whether it’s an innovative culture, an innovative product, or how they’re creating innovation within the industry. With the fintech space dominated by startups it isn’t surprising that innovation is thriving, after all, it’s much easier for new businesses with a small team and developing culture to build innovation within their business than it is for large financial institutions.
Startup fintechs have the advantage of agility over many of the established businesses in the financial industry. So, what does this mean for financial businesses with many employees and a long-established culture, is innovation just a pipe dream? Peter Nyberg, Group Director of Risk & Credit at Bisnode doesn’t think so.
When it comes to innovation, if anyone is in a position to understand what it takes to transition an established business into a digital-forward, innovative organization, it’s Peter. As a leader within Bisnode, he’s seen first-hand both the ingredients needed to adopt innovation within the organization and the steps Bisnode’s clients are taking to create innovative change within their companies.
Bisnode—Creating a Cohesive Mindset to Support Change
Bisnode has taken an interesting path to become the company they are today, which is one of the most in-demand data bureaus and analytics firms in Europe. In its early years, Bisnode purchased many small businesses to build the data giant that it is today, and Peter is quick to point out that creating a united team within an organization that is the child of 70 different entities is no easy task, but it’s essential for the success of their business.
“You cannot be competitive if you have 37 different ways to do the same thing, if your knowledge is found in 18 silos, or your data is stuck in legacy monoliths.”
For Bisnode to succeed in using digitization to drive the business forward it had to take its existing competitive culture and transition towards a cohesive culture. To do this they created defined business goals that the team could be united around. So, when the usual objections and debates about how things are done occurred, they helped drive innovation instead of creating problems.
Bisnode has worked hard to adopt a digital mindset and to empower their team to innovate, and while this is an ongoing process, Peter can identify one key step that became the foundation for all future changes within Bisnode:
“There was a key turning point: setting down for the first time a set of key initiatives that align all the forces within Bisnode, and highlighting how those initiatives take us towards being a different company.”
This cohesive understanding of core competencies, business goals, and the next step towards achieving these goals helped Bisnode create an organization that was digital-forward, ready to adapt to change, and innovative. It provided the glue that formed one unit out of 70 companies and allowed them to transition from data bureau to leading data analytics business. A change that not only helps them be more innovative but also helps drive innovation within their client’s businesses.
Identify that it’s broken, admit that it’s broken, and commit to making a change
When businesses reach out to Bisnode it’s normally because they have a question that they can’t find the answer to. Whether it’s simply a question of using data, about efficiency, cost-reduction, risk decisioning, compliance or even the best way to adapt to a changing market, to find the solution it’s essential for a business to commit to making a change. Creating change in an organization is difficult, creating change in an organization that isn’t committed to evolving is almost impossible!
Whether the business can maintain focus on their goal. Digitization is an exciting opportunity for many businesses, and when people think about digitization and innovation they often fall into the trap of focusing on the technology. In Peter’s experience working with financial institutions he says, “Our clients jump into ‘we’re going to use this piece of software or that solution’ or ‘we’re going to hire so and so, many analysts, and a data scientist’, and often they do but somewhere in that the end objective is forgotten and not reached.”
When it comes to using digitization to innovate it’s essential for a business to look at all parts of the puzzle and what pieces are needed to reach their goal. Peter is a strong believer in digitization being as much about people and culture as it is about technology. Take for example a bank that has the technology in place to use risk-based pricing but doesn’t have the shared understanding or cultural awareness needed to implement that change. The technology’s capabilities and innovation opportunities are being wasted because the people weren’t ready for the digital approach.
Avoiding the big bang approach—guiding businesses towards their innovation goals
While organizations fail to reach goals for many reasons, Peter says failure is often the result of, “businesses approaching change with a big bang method.” Creating a digital mindset within an organization can’t happen instantly, it needs a step by step method to ensure that all parts of the business are fully aligned with the new business approach. Peter used the analogy of an Oil Refinery as it’s been said many times that Data is the new oil of the digital economy. An Oil Refinery isn’t successful just because it has oil—its success is down to knowing how to access the oil, transport it, refine it, sell it, and get it to the purchaser. Most importantly, what the Oil Refinery very clearly needs to understand is what fuel is fit for which engine, and distill accordingly.
There are steps every organization must take in order to get to their goal and Peter is a huge proponent of using agile methodology to help businesses achieve their targets. He believes one of the key benefits of the agile approach for innovation is that you always have a functioning business.
“In terms of getting better at digitization, there is a lot to learn on the business side from thinking about gradual development of digitalization and processes, and the outcomes you seek.”
Instead of making large changes that the organization isn’t ready for, you can take incremental steps that slowly transition the business to where you want to go. It’s a gradual move forward that lets all stakeholders within a business adapt to the digital methodology and gives the team the opportunity to learn from each step and use this knowledge to improve future development phases.
“This is especially powerful when it comes to digitalization. You can, in fact, capture your inputs and your outputs. 3, 6, 12 months later you can go back, and see if what you predicted would happen actually did happen; and you can improve.” Peter again uses the Oil analogy to describe what he sees all too often: “In the late 19th century, the gasoline portion of distilled oil was often dumped into rivers. It was simply too explosive and difficult to use. Even today the norm seems to be for companies to throw away their most valuable data asset—the outcomes their digital processes generate and how they compare to what later on in hindsight would have been most valuable. And thus, their business continues to run on data diesel.”
Be bold, create a cohesive goal, and take necessary risks
What it’s clear to see from both Bisnode’s transition to a digital-focused, innovative company and Peter’s experience with financial services clients, is that change is possible, even in the most divided organizations. Adoption of the digital mindset doesn’t happen overnight, it requires a long-term commitment, a clear goal, and a step by step process to move the organization forward as one cohesive unit. Adopting digitization to allow your business to innovate is a risk, but it’s also a risk you’ll need to take to keep your organization competitive.