After waking from a nightmare in 1845, Elias Howe revolutionized the textile industry.
He had dreamt he was surrounded by men with spears intent on killing him. What stuck with Elias from the dream wasn’t the fear, but rather the spears. They had holes in the tips and as he recalled them swaying up and down, he was struck by the solution to a problem that had been plaguing him.
Inverting the old design of sewing needles by having the eye be in the front rather than the back allowed Elias to build and patent a machine that impacts our lives still today.
It’s easy to romanticize this type of story. There’s an air of magic and mystery around it. Was Elias somehow chosen or special? Is innovation then the product of luck or fate?
When the unexpected is expected, you’ve got to have a plan
As CIO at Charles Schwab, Dennis Howard and his technology organization don’t have the luxury of waiting for lightning to strike. There’s a sense of urgency every single day.
Part of that urgency is external, driven by the dizzying speed of fintech evolution. However, the lion’s share of this motivation is intrinsic, rooted in the firm’s extensive legacy of breaking down barriers to enable more people to own their financial futures.
Dennis shared with the Austin Business Journal that he has found both challenge and purpose by, “Walking into a firm that has a 50-year history of being an innovator and a founder who is very well known for disrupting the industry and even disrupting the firm.”
Dennis also said the expectation of always raising the bar is a must in a world where, “The pace of change for technology is moving really rapidly.”
So, how do Dennis and technologists across the firm take innovation out of the hands of chance and operationalize it?
Principle #1: Have a structure in place
Making innovation a reliable output means having teams and programs where nurturing breakthrough thinking is a mandate rather than an option. Schwab has a number of these teams both inside technology and digital organizations, such as the Research & Development, Innovation Accelerator, and UX Catalyst teams, and elsewhere at the firm, such as the Non-Traditional Activations team within Marketing.
These teams operate with balance. They have the autonomy to explore possibilities, test and learn, and find new and improved ways to solve our clients’ unmet or underserved needs. At the same time, they’re also called upon as systemic problem solvers and thought partners when a solution isn’t apparent or is sub-optimal.
Diversity and collaboration are critical to the success of these teams—and to how Schwab consistently innovates across the company. Diversity of thought, background, and skill sets open up the range of ideas generated and allows teams to look for innovation opportunities from a combination of technical, creative, and business-oriented angles. And tight partnership across the innovation and business teams ensures the innovation strategy stays closely connected to real business and client areas of need.
Principle #2: Use the right filter
Developing a process to ensure a pipeline of ideas is only the tip of the spear (if you’ll excuse the expression). If there’s no strategy about where to go deep rather than broad, it becomes far too easy for time and resources to be diffused with no practical outcomes. You run the risk of creating technology searching for a problem to solve rather than the other way around.
When Elias had his dreamtime eureka moment, it didn’t come in a vacuum. He was already working on creating the sewing machine, but had hit a roadblock that presented a specific, concrete problem to solve. While the solution was open-ended, the goal was not.
The filter that guides technology work at Schwab is the same filter that informs all work at Schwab—the needs of clients and investors at large. A great deal of work goes into clearly defining those needs, delivered by many teams across the company both inside and outside the technology and digital functions.
The company’s DAI (Data, Analytics, and Insight) team looks at available information and conducts proprietary research when a gap in understanding exists. Additional knowledge is gleaned by looking at data about how clients are interacting with current offerings. And, of course, some of the most powerful direction comes from gathering client feedback en masse from the field, by simply listening to what clients are telling us.
With that north star in place, Dennis says he and others can look at ideas coming out of the various teams with the lens of, “Is that really meeting our clients’ needs right now? If it’s not, we may still experiment in the background, but what’s going to drive our innovation is what’s really adding value to our clients’ lives.”
Principle #3: Foster a culture of experimentation
Limiting the possibility space limits both the quality and quantity of new ideas that can surface in an organization. To combat this, Dennis believes in providing room for pure research and exploration. Whether natural language processing and chat bots or blockchain technology or any of a dozen other areas, Dennis says, “We do a lot of experimentation in the R&D group.”
The value of this experimentation often takes the form of immediately buildable solutions, but even when it doesn’t it still enriches the company by giving a stronger view of where technology is heading. The process can pave the way for a more agile implementation of future solutions or even head future problems off at the pass.
For example, with blockchain research, Dennis notes the teams look to, “Stay on top of things and how things are evolving, and not just from a crypto perspective, but the use of blockchain is a really interesting and powerful technology.”
Teams engaging in innovation work get the chance to regularly evangelize the potential of their latest initiatives, opening minds across the firm to options they hadn’t considered. The ripple effect of this activity sparks additional creative input and thinking from all over the business, adding significant flow into the pipeline.
A blueprint that works like a dream
While we may continue to mythologize figures like Elias Howe who personify the notion of magical ideation, the real challenge of innovation is the follow-through required to turn possibilities into realities that work at scale.
The blueprint for inspiration includes an explorer’s spirit, a servant’s heart, and the fortitude to see the right things across the finish line. It’s a challenge that fuels better client outcomes and maintains a decades-long tradition of working to disrupt the status quo and open new doors for investors.