A Look Inside Schwab’s “Test Kitchen”

A Q&A with Raul Rodriguez, Managing Director, Innovation Accelerator


January 21, 2021

Raul Rodriguez is Managing Director of Schwab’s Innovation Accelerator where, among other things, he helps to run Schwab’s Innovation Labs. The labs are 12-week workshops that bring together a diverse range of expertise and points of view to explore new ideas and challenge assumptions through deep research and user testing.

We caught up with Raul to hear a little more about his work.

You have a cool job, Raul. Tell us what you and your team do.

RAUL: I agree – it is a cool job. The Innovation Accelerator was born out of Schwab’s work to rapidly develop new digital experiences and reimagine existing ones that make investing easier and more accessible. So at a very basic level, our job is to explore new and better ways of doing things, but to come at it unimpeded from some of the things that can get in the way of genuine innovation. 

It requires really challenging ourselves not just to build better mousetraps; not just to seek improvements on something we’re already doing, but to push ourselves further…sometimes even to an outcome we hadn’t planned for at the start. The key to true innovation is uncovering counter intuitive findings, and that is a big part of my team’s work.

We’re like Schwab’s test kitchen.

How do the Innovation Labs work?

RAUL: They’re 12-week intensive workshops where we give people across Schwab – on a rotational basis – both the physical and mental space to either solve for an existing need or find an entirely new way of doing something so that we can consistently deliver great client experiences.

The team compositions are mixed. We bring in people with subject matter expertise and we add core people with many labs under their belt. That diversity of perspective is important.

Every lab is different, but they all start the same way: by asking one fundamental question to ground the research. It could be how do we save advisors time?  Or how do we make tax season better? Whatever it is, it’s critical we get the scope of the question just right. In fact, we call it the “Goldilocks range.” 

From there we ideate and generate concepts. We test them with clients and potential clients. We collect feedback and refine - or sometimes reject - our own thinking. We pull in assessments from other parts of Schwab – Risk, Strategy or Marketing for example.  And ultimately, we end up with business recommendations, a prototype for a new product or service, or ideas for potential external partnerships.

All of that happens in 12 weeks.

You mentioned testing assumptions being a part of this process.  Do you have examples of assumptions that turned out to be wrong?

RAUL: Challenging and in some cases dispelling assumptions can be sensitive. It sometimes requires a relentless asking and re-asking of the same questions. That’s why the setting and structure of the lab helps. We have the room to test because our goal isn’t “build a product,” it’s “solve an investor problem.”

We’ve found certain assumptions to be wrong once put to the test. One that stands out for me is something we learned about the value many of our clients’ place in the relationship they have with the Financial Consultants in our branches. We wondered what might happen when we started providing our clients – many of whom are retired – with a new in-depth digital experience. Would it diminish or even replace the need for human guidance among some of them? When we put the digital tool in front of those clients, their reaction was often, ‘This is great. Now I know what to talk to my Financial Consultant about.’  It became clear that the digital experience wasn’t a substitute or a redundancy for human guidance for these clients.  It can enhance the relationship.

The Innovation Labs are like a mini startup running within Schwab. One of the things that makes us successful is that we are focused on experimenting and exploration – just as often producing something that works, as making a point to scrap something that doesn’t. When we bring new teammates into our lab rotations, we emphasize that we aren’t here as business executives. We’re here as scientists.

Raul Rodriguez, Managing Director, Innovation Accelerator

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Do you have examples of projects you thought had potential but ended up on the cutting room floor? 

RAUL: We’re big believers in the idea of “failing fast and learning from it.”

We recently conducted a lab around how to enable people to give someone a financial plan. For example, a grandparent gifting a financial plan to a new college grad just starting out with their own finances. However, what we figured out wasn’t how to do that, it was that people didn’t really want to gift financial plans. Through our research, we discovered that gifting assets was more appealing, and a financial plan can be complementary to that.

Let’s finish with a victory lap. Is there a product or solution on the market today that started in the Innovation Lab? 

RAUL: We do know that planning is increasingly important to clients, and we’re proud of the part we played in the development of Schwab Plan™ which launched in August 2020.

The team that built the tool brought it to the Innovation Lab and threw themselves into the process of conducting research and testing to solve the critical problem of how we can help more investors build positive, ongoing financial habits early on? One of the key learnings that informed the creation of Schwab Plan was the power of habit. We needed to figure out how to make planning a continuous, evolving process that adapts over time to a client’s life circumstances, rather than a ‘set-it-and-forget-it’ event. Schwab Plan now makes it possible for all our clients to get to an easy-to-use, digital financial plan.