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scientology

In the aftermath of the Scientology trial in Brussels last month, senior representatives of the six Belgian governments have initiated exploratory talks with Scientology to assess the creation of a blockchain-based venture for the relationship economy.

blockchain

In a joint press release, they announced today the launch of DAG (“Digital Asset Goldings”), a new blockchain consortium headed by Bitalik Vuterin. The project uses a brand new fork of the blockchain protocol called “Ethereal”: a permissioned mutual distributed ledger protocol, underpinned by its own ether-cryptocurrency “Real”.

DAG has been set up as a non-profit cooperative, and has already collected more that 500M USD in equity funding, rocketing it into the first blockchain unicorn in history.

DAG will be governed by G4S (Governance For Securities), a governance body made of 45 major financial institutions, and several of the RegTech sandboxes, that tested the technology in Q1 of 2016.

The funding round was lead by FISH (Flanders International Securities Holdings), fully owned in open source by five of the six Belgian Governments (Brussels does not participate: as the home of the European Union, the Commission does not permit hosting regions to participate in ventures promoting non-fiat currencies).

FISH Logo

Flanders International Securities Holdings holds 51% of the shares of DAG, 29% is owned by G4S, and the remaining 20% is reserved for future crowd sourced citizen participation, based on simple bonds that will be issued in the Real open source currency on the DAG shared ledger.

Ethereal leverages the findings of the Digital Asset Grid project, an incubation project that was set on hold in 2012 by lack of interest and investment, probably because to novel at its time. Digital Asset Goldings will use the same principles of governance, trust, resilience and availability as the DAG-project, but the implementation is based on a brand new revolutionary protocol “Ethereal”, using modern breakthrough encryption technology based on Quasars.

DAG logo

“With Ethereal, we have solved the scalability problem of the blockchain”, says Vuterin; “We can scale to more that 1 Trillion nodes on the grid, and all the atomic transactions can be executed in milliseconds. We can do this thanks to our quantum computer “StockGold”, mining Reals at the nanoscale and nanosecond.”

quantum computer

Quantum Computer running StockGold

Adriano Selinky – Head of BancoVentures, the investment arm of BancoBlanco and one of the 45 banks backing the project – raves: “We believe there are about 20B USD in yearly savings in direct settlement of Scientology fees: the business case was a no brainer for us, and we are eager to invest in more Ethereal-based projects and startups. DAG will revolutionize financial services, and will deeply disrupt the economic fabric of our economies. We see many more use cases, but it will take a couple of years before we will see the full impact of this.”

Adriano Selinky

Adriano Selinky – Head of BancoVentures

The Scientology trials will be labeled “TrustWeb” and will be led by Neil Sinner, as a competitor to his brother’s “DataWeb”. “Kris has been instrumental in setting up DataWeb, but this technology space is moving so fast that DataWeb is already an outdated technology before its first implementation. TrustWeb is just offering superior relationship experiences”

The promise of superior relationship experiences did not go unnoticed to the 6 Belgian Governments, who consider the DAG and the Ethereal G4S governance model ready to revolutionize their own move from centralized to decentralized to fully distributed peer-to-peer government.

DAG will have its international headquarter in Blocke-Heist, a little town on the Belgian coast. The little town is renowned for its elite public, attracted by art galleries, fashion shops, exclusive restaurants and bars, and a vibrant nightlife.

Baron Clipckens – Mayor of Blocke-Heist – was very bullish: “I was myself hit very hard during the 2008 crisis as an investor, and I am convinced that transparency and traceability of financial transactions are the best guarantee for the long- and short term savings of our citizens. We welcome all FinTech Hubs to join us in this effort, and we hope that Blocke-Heist can become the Blocke-Valley and Davos of the Relationship Economy.”

Together with Scientology, DAG has also acquired its HQ real estate in Blocke-Heist: “La Réserve”, a 3-star Michelin restaurant and conference center.

La Reserve Blocke-Heist

La Réserve in Blocke-Heist, Flanders, Belgium

It comes with an 18 Hole Golf course to facilitate high quality relationships and connections. Close to the seaside, this will guarantee DAG with a daily fresh supply of fish and seafood, and is ideally positioned as a high-end executive meeting and event center.

DAG also attracted @petervan (one of the Co-Founders of Innotribe) as their Artistic Director. “There is indeed room to rethink the way events are organized, using more participatory Ethereal concepts that will guarantee advanced collaborative learning beyond the pure cognitive. La Réserve is an outstanding location where physical and emotional space blend into unique immersive experiences”; said Petervan.

Petervan Shift Happens

@petervan, in his black T-Shirt “SHIFT HAPPENS”, at Innotribe Sibos last year
(black T-Shirts seem to be the standard uniform of Innotribe Co-Founders)

DAG seems to be a marriage in heaven and possibly the singularity moment for financial services: the future of decentralized governance combined with the relationship economy of Scientology.

Casino Blocke Heist

Blocke-Heist Casino – Magritte Biennale

The DAG opening gala party – Tuxedo and Magritte Bowler Hat only for men, ladies in Gala Dress – will be held tonight in the Grand Salon of the Casino of Blocke-Heist, starting at 11pm with Champagne and genuine Russian caviar, followed by a standing dinner, and Belgian Top House-DJ’s animating the dance floor till early in the morning. The event is sponsored by Veuve Wickcot Champagnes and BancoBlanco. For those with more artistic interests, there is also a Biennale running in the Casino, of Belgian surrealist artist Magritte. See you all there!

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This post is about some of the myopic views on disruption in financial services (or any other vertical for that argument), and why I am getting a bit tired of FinTech, RegTech, InsurTech, or whatever AbcTech you may come up with.

Petervan Abstrakt Motiv 390a detail b+

Disrupted - Petervan Artwork - Acryl on Paper format A1

 

Most of the discussions in FinTech are about the (by now outdated) “unbundling” of highly vertical integrated organizations like banks. Everybody recalls the famous CB-Insight slides on how all functions on the website of HSBC, Wells Fargo, or fill in your <Bank Name> here, will be replaced by better offerings of startups or scale-ups: “everything gets fragmented”, you know😉

It even leads to a “Re-bundling” of financial services, as what was once unbundled needs now to be re-bundled by “banking-as-a-platform” or “Fintegration”, just to throw another buzzword into the mix.

This is in my opinion a highly simplistic view on disruption. It is a fragmented view on disruption. The disruption view is fragmented: each little function on its own is subject of a fragmented disruption debate. We are missing the holistic view of what is going on.

What I would like to bring into the conversation is the “inter-connectedness” of everything, or the “entanglement” of everything.

For payments, the conversation is usually about how many and which intermediaries are part of a payment transaction from the payer to the payee, and how they add value, friction and costs into the system: one can indeed draw disintermediation maps and articulate how the different new entrants attack the different pieces of the end-to-end transaction. But it is piecemealed view, as if the sum of the atomic transactions is an exact equation of the value created in those ecosystem value chains.

The same reflections can be made on the securities business, where many different players (exchanges, central counterparties (CCPs), central securities depositories (CSDs), brokers, custodians and investment managers) are part of the end-to-end flow of atomic transactions between the issuer of a security and the consumer of that security. See also recent comprehensive post by Let’s Talk Payments.

The point I am trying to make here is that what needs to be solved, re-thought and re-designed is a deep ecosystem entanglement. What are really needed are a fundamental process redesign and process innovation and that is not an easy undertaking with all the network effects that are inherent in these ecosystems.

The other point I am trying to make is nobody – not the incumbents, nor the startups/scale-ups – is in a position to solve this on their own.

I believe we have to evolve from platform capitalism to platform cooperation or even platform co-operativism.

  • Instead of talking about optimized correspondent banking, the conversation should be one of collaborative/cooperative banking.
  • Instead of talking about optimized securities lifecycles and settlement, the conversation should be one of collaborative/cooperative securities markets.

The system is not broken. It works very well for what it was designed for. It does not need to be fixed. It needs to be re-thought. What we are witnessing is the need for a fundamental re-thinking of our assumptions. The financial system is part of a broader system of capitalism based on neoliberalism. That system is broken.

Paul Mason – who wrote the book “Post-Capitalism” – was very clear in his recent keynote to the Glasgow Economic Forum: “Neoliberalism is broken”. And he goes on:

  • information technology has paralysed capitalism’s capacity to adapt
  • information technology creates a short-cut to abundance
  • the root cause of the boom-bust cycles, collapsing productivity, stagnation and policy paralysis is that the markets are sending us a signal that there’s not enough value in a high-tech economy to justify current valuations — of debt, equities or derivatives
  • we are in a long transition beyond capitalism, in which the state, the market and a non-market sector based on collaborative production will jostle and coexist
  • and that the only theory that can encompass all of these facts is the one originated by the man quoted on the poster behind me [Adam Smith] — a modernised form of the labour theory of value.

That is the first simplification in the current mainstream thinking about disruption.

As a start, one should start looking at the symptoms of that broken system (as very well articulated in Otto Scharmer’s work at the MIT U.Lab). These symptoms are:

  • An Ecological divide
  • A Social divide
  • A Spiritual divide

otto

The second simplification of the disruption discourse is the lack of inclusion of the macro-forces. Some of the macro-forces deeply driving what’s going on are:

  • Technology macro-force. Here is where inter-connectedness hits hardest. However, this is probably the easiest macro-force to deal with, as technology will take care of itself, as it always has. Open source and other collaborative models will only speed-up that self-care of technology: standards will emerge almost naturally, by natural selection, or my monopolistic interventions.
  • Regulatory macro-force. Regulation is still very high on the agenda of financial institutions, and one can only expect that more is to come, especially on the area of data capitalism, handling of personal and corporate data, and even data ethics. After having digested the regulatory impact of the 2008 financial crisis, many are tempted and seduced to jump back with relief into innovation. The blockchain hype is a great excuse for claiming one is busy with the future state of things. Nothing could be further from the truth
  • Geo-political macro-force: Grexit, Brexit, Terrorism, War, Surveillance, climate, and other crisis that can pop-up at any moment in time, with their potential of killing overnight all the innovation plans and ambitions.
  • Eco macro-force: the acknowledgement that our organizations don’t operate in isolation, that we have to evolve from ego-businesses to eco-businesses, not only extracting value out of the ecosystem for our sole and own benefit, but that we are part of a reciprocal non-zero-sum game with an unspoken desire to save humanity.

The third simplification is the omission of the time component of evolution. I strongly recommend you discovering the work of Simon Wardley and his “situational awareness maps”.

 

 

Different values are created by different versions of different technologies and value engines, each of them evolving at their own pace on the lifecycle of emerging to commodity/utility. For big organizations – like financial institutions – it is extremely difficult to map out the current state, let’s not even mention the ability to strategically decide where one wants to head for in different time horizons in the future.

The same situational awareness is not only needed for (existing) and new technologies, but also for existing and new regulations, geo- and eco- events and ambitions.

In the past many have been concerned with the “backward compatibility” of new services and solutions. Backwards compatibility with the existing footprint and practices in the market that is.

I believe there is room today to start thinking in terms of “Forward Compatibility”.

What is Forward Compatibility? It is a capability to plan ahead for gradual adoption by the ecosystem, taking into account the different barriers mentioned above. This is about knowing HOW to get at the new destination:

  • How you rally the main stakeholders of the ecosystem into a rigorous system and process innovation? Process innovation is different from process-, datamodel-, or messaging standardization. It is not about standardizing the existing and guaranteeing backwards compatibility with the existing. It is about co-creating a new reality.
  • How you promote the evolution from the current model to the future model? In the case of distributed ledger technologies for example, it is not about a tabula rasa that will eradicate the existing, but how one evolves from for example a messaging hub-and-spoke paradigm towards business objects and lifecycles in the cloud, initially probably in one central database (one node), and then evolve to a peer-to-peer networks of many distributed databases or nodes (remember the Digital Asset Grid?)
  • How to bootstrap this new reality taking into account the network effects to be created and promoted in the new P2P reality.

No disruption will happen without fundamental re-design – or better re-invention – of the end-to-end business processes:

  • Organizations knowing where they want to get and defining and leading that journey;
  • De-risking change throughout this journey;
  • Making trade-offs in the breadth ànd depth of the destination;
  • Moving beyond the atomic nature of the transaction. As mentioned an nausea in previous posts, it is not good enough anymore to enable (atomic) transactions, the challenge is to enable commerce, as an end-to-end process

Startups/Scale-ups who want to be part of this endeavor, will need to know how to “scale”: they will need to learn to appreciate the mechanics of growing a startup into a corporate. This growth process (and its associated growth pains) is very well described in the post “Go Corporate or go home” around the concept of legibility of on organization. The startup organizations – whether they like it or not – will need to become more legible, more predictable. The author makes a very solid argument why hierarchies are needed.

“The smaller a company is, the less they need to formalize anything, and the less the three levels — chain of command, business process, and culture — differ.”

 As they grow, they will have to synchronize how they transform these three levels (chain of command, business process, and culture). It’s not only from small self-sufficient team into hierarchies; it is also growing into professional business processes, and evolving the social fabric and conventions.

Although startups, scale-ups, and corporate innovation sandboxes mimicking the startup culture “love to have and keep the flexibility, the cost of growth is scale, integration, and profitability.”

In this context, it is probably worth having a look at the post about the Transferwise culture (I could have taken any other scale-up for that matter) “We inspire smart people and we trust them”, and especially the comment on that post that talks about KPIs, product-level empowerment, about focusing on growth more holistically, actually removing bottlenecks and silos, empowering teams at the product level, and instrumenting themselves to be able to actually get granular feedback.

If possible – assuming you want to spend some quality time – read that post and comment after you have read “Go corporate of go home”.

So next time, when you pitch about disruption, about the end of banks/banking, about collaboration/co-operation, or about any other technology solving world hunger, please make sure you have an answer on how to get to your new destination. I would suggest you keep forward compatibility in mind.

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Douglas

Headshot - Douglas Rushkoff

The first time I heard the term “Platform Cooperativism” was when listening to a talk by Douglas Rushkoff (www.rushkoff.com) on 15 Nov 2015 at the Internet Society.

video

Just a couple of weeks before, Doug had sent me a manuscript version of his new upcoming book “Throwing Rocks at the Google Bus: How Growth became the enemy of prosperity” (Amazon Associates link), planned for release in two weeks or so. I recall the working title of the book was “The end of growth”.

book

As usual – when listening to an interesting talk – I scribble notes on my notepad, pausing the video after every interesting sentence, and end up with some sort of transcript, somewhat personalized because using my own sense-making lens and bias.

Some snapshots:

  • Before the law enforced monopoly, now technology enforces monopoly
  • From creative destruction to destructive destruction
  • A software company is a company extracting value from the working economy (transactions between people) and converts it into capital (static bags of shares and stock prices), converting land and labor into capital.
  • Creating real value, that’s the suckers’ place (of being gamed). Playing the game is the place where you want to be
  • Central currency is the embedded operating system
  • Should we optimize for growth or optimize for humans?
  • Jobs!, Jobs!, Jobs! Let’s pretend we are on acid for a minute😉. Who really wants a “job”?
  • Most companies, after reaching max growth, go for steady state, the flow of money
  • Uber drivers are doing R&D for automatic cars. They don’t have a platform cooperative
  • Family businesses are focused on the long term, are generational, are even willing to help other create value.
  • From a growth model of business to a flow model of business
  • Optimize for the velocity of money (not for being static, stocked in troves)
  • We don’t need banks to authenticate
  • The bank was made to extract value out of our transactions
  • About Bitcoin/Blockchain (at minute 37): “what are they programming for?” Bitcoin creates trust? No, Bitcoin SUBSTITUTES trust
  • In the end, we have to re-program the social expectations of each other
  • There is some chance that the P2P economy may happen, that the extraction economy comes to its end, with interesting experiments
    • We see hybrid models to fund pizzeria, 50% Crowd, 50% bank
    • The bank as facilitator of local community development
  • From platform monopolies to platform cooperatives
  • Facilitating exchange of value between people instead of extracting value from people’s labor.
  • We need a full-blown renaissance, and we are in it…
    • From Perspective painting to the hologram and the fractal
    • From the individual hero to collectivism
    • From the printing press to the computer
    • From enclosing the commons to retrieving the commons
    • From divisional science to the science of whole-ism
  • Land, Labor, and Capital as PARTNERS in an economy
    • Today, capital is extracting from Land and Labor

The comments right after Douglas’ talk by Astra Taylor, author of the book: “The Peoples’ Platform: And Other Digital Dilusions” are interesting:

  • I want (platform) cooperatism to be confrontational, it has to make a difference in the world
  • How different is the current moment? If different at all….
  • The key for cooperatives success is access to capital

Platform Cooperativism is possibly an answer to Platform Capitalism. Harold Jarche recently articulated very well what platform capitalism is really about: the extraction of value from many for the benefit of a few.

“The emerging economy of platform capitalism includes companies like Amazon, Facebook, Google, and Apple. These giants combined do not employ as many people as General Motors did. But the money accrued by them is enormous and remains in a few hands.”

And just a couple of days ago, David Bollier had a great post pointing to a new report on Platform Cooperativism by Trebor Scholz, one of the organizers of the Nov 2015 conference where Rushkoff spoke. Full report (PDF) report here.

“In the report, Scholz notes that the gig economy financializes resources that were previously outside of the market.  Our cars, our apartments, our private time – all can now be monetized through corporate platforms and made subordinate to market forces.  In effect, this new system is “embedding extractive processes into social interactions” and “extending the deregulated free market into previously private areas of our lives,” writes Scholz.”

Platform Cooperativism is a choice we have in the Industrial-Human Paradox. The WEF makes a lot of noise about “The 4th Industrial Revolution”, semi celebrating forms platform capitalism like the Uberization of everything, and robots eating our jobs.

It feels to me that sort of thinking starts feeling more as entertainment rather than independent thinking and provocation.

As Douglas Rushkoff said and provoked elsewhere: we don’t need to fix the system. The system just works fine for what it was designed for: extracting value.

scharmer

Otto Scharmer articulated very well the symptoms of the broken system:

  • Ecological divide
  • Social divide
  • Spiritual divide

We don’t need to fix the existing system, we need another system. We need radical ideas for the new century: platform cooperatism could be the answer. But a lot needs to change.

Still inspired by Scharmer, we need to improve the quality of how we engage with each other, the way we debate, dialogue, coordinate, organize. We need to take into account the quality of the context. We need to go from experiments and prototypes to models that can scale and be transformative. And that needs to happen at an institutional level.

In his ULabs, Otto Scharmer has identified two missing conditions for this to happen:

  • Enabling infrastructures that bring together the right set of players into a system
  • Move from abstract coordination mechanisms (like hierarchy, markets or organized interest groups) to co-creating ecosystems

In the middle of the great transition from centralized to decentralized to fully distributed systems, we have a choice: we can copycat the models of platform capitalism leading almost by nature to a few monopolists who take it all, or we can choose for a construct that has in mind the flourishing of the whole, of the cooperative.

Somebody has to take up the role of the commons for financial services, where the end-goal is not to maximize profit and shareholders value, but the interest of the community and the maximalisation of flow between all the stakeholders.

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Is there really nothing else to talk about? The intensity of the hype is getting to a point where conference organizers put a blockchain session onto their program “just to get people in”, in many cases because they have nothing else valuable to say. So they sell hype instead of substance.

ceci no blockchain

Magritte’s painting, freely adapted by Petervan

 

You know when you are at the top of the hype-cycle, when the topic hits the WEF agenda as a cure for “The 4th Industrial Revolution”.

David Birch nailed it this week in Finextra when he wrote:

“It seems to me that in a relatively short time the word blockchain has become detached from its technological roots and from its location in the spectrum of shared ledger implementation options to become one of those almost generic chromewash terms, like “big data” or “cloud” (there is no cloud, remember, it’s just somebody else’s computer) to deliver a superficial veneer of futurism.”

path

In the “Path of least resistance” (Amazon Affiliates link), Robert Fritz says:

We live in an era of platitudes and mottos. Many of them are designed to manipulate people into action: If you’re not part of the solution, you’re part of the problem”. This one, popular in he late sixties and late seventies, was clever. No matter what you did, you were involved in the conflict. And if you happened not to be directly involved, you were the cause of the conflict

And later;

So many of the notions in human growth are filled with these kinds of conflict manipulation. I suppose it is considered good marketing. Create a perceived need in the prospective client. Encourage a sense of urgency. Make it seem as if there is no choice. But conflict manipulation has a structure that cannot lead to growth just to more extreme oscillation. Thus many of the people who attempt to cause change, often with real sincerity, do not change and do not grow. The structure of conflict manipulation does not support change.

Blockchain is nothing else than code that seems applicable in many use cases. Code is language. Code is culture. The only way to understand and learn code, culture or language is to practice it. That’s exactly what many of our institutions do, and i think that is great.

But let’s not confuse symptom and cause.

As already mentioned in my blog post on Magritte and The Ages of Machines, the image of the pipe is not a pipe. The picture of the pipe stands for the hype. The hype is not the real world, not the real pipe. The hype hides reality. What is it hiding?

It hides the underlying structural changes. Robert Fritz said :

“A change of underlying structure will lead to a change of behavior. Not your good intentions, your sincerity, your hopes, your goodness, or how much you care”

Structure drives behavior, and behavior drives culture.

The pendulum oscillates:

Capitalism > Postcapitalism

Platform Capitalism > Platform Co-operatism

Collaborative > Autonomous

Internet of Things > Interest of Things

But that underlying structural and hence cultural change is caused by ecological, social and spiritual divide (the three big divides in Otto Scharmer’s work).

That structural change becomes more and more visible in the evolution from centralized to de-centralized to fully distributed systems.

ottoFrom Otto Scharmer’s U.Lab

The above structural changes deeply impact our quality of attending, conversing, organizing and coordination.

These are the things we should discuss. How we participate, how we organize, how we coordinate, how we set norms and governance to tackle the three big divides.

On the governance and regulation of “centralized networks” and “distributed systems”, there was recently a great post by @nickgrossman GM of Union Square Ventures, referring to his great Regulation 2.0 Whitepaper

regulation 2.0

Figure by @nickgrossman

“This is a fundamentally different regulatory model than what we have in the real world. On the internet, the model is “go ahead and do — but we’ll track it and your reputation will be affected if you’re a bad actor”, whereas with real-world government, the model is more “get our permission first, then go do”. I’ve described this before as “regulation 1.0” vs. “regulation 2.0”

The point I am trying to make with this post is that the pipe is a big distraction for the real work that needs to be done.

The real work and our bigger themes of discussion should be (for example):

  • How to become better banks, better in the sense of better for the world
  • How to deal with the power shift resulting from the structural changes
  • How to move from platform capitalism to platform co-operatism
  • How we attend, converse, organize, and coordinate in this new medium

This is post-platform thinking. Where centralized networks (like Uber, AirBnB, etc) could/can/should get replaced by fully distributed P2P systems.

The market that can be addressed is huge. The frictions to be sorted out immense. This attracts entrepreneurship and investment.

But we risk having the same wet dream of freedom and self-realization as we had with the Internet.

In the end, powerful players stand up and try to control the market, trying to get a grip on it through monopolistic and hyper-libertarian behavior. Who will be the Amazon, Google, Facebook, Apple, Samsung, or Alibaba of this new monopolistic distributed nirvana?

The image of that pipe may create a big illusion of perceived freedom.

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KCIs help organisations to succeed in the 21st century

It’s no secret that many financial services firms struggle with technology and business model innovation.

With a customer base heavily influenced by their interaction with the likes of Amazon, Alibaba and Apple, and a whole range of new FinTech entrants, financial institutions know that they must adapt to changing consumer expectations.

To link company behaviour to outputs, management teams frequently use KPIs —Key Performance Indicators. KPIs help managers to align behaviour and incentivise performance around specific revenue goals.This works very well until an organisation has to change.

Management may then find itself in the unlucky position of incentivising counterproductive behaviour. As employees continue to focus on execution, the organisation runs the risk of becoming captive to its KPI programme.

To counter this, a fresh line of thinking has been developed, promoting a new set of metrics called KCIs, or Key Capability Indicators. The essential benefit of a KCI is that it measures the capability of an organisation to change at a structural level rather than its ability to create new outputs. It is not an output metric. It does not provide an indicator of new products created, increased profits, or improved asset utilisation. Those types of metrics are already in place and can be adapted readily.

For Innotribe at Sibos 2014, Innotribe commissioned Haydn Shaughnessy, an expert on the topic, to produce a financial services specific KCI Index. This resulted in a compelling presentation at Sibos in which Haydn discussed the innovation capabilities needed by organisations to succeed in the 21st century. Based on the positive feedback of our audience, we decided to consolidate Haydn’s findings in a whitepaper – Innovation in Financial Services: The Elastic Innovation Index Report.

The paper highlights that most organisations lack a KCI set which can make change more manageable. KCIs can:

  • help leaders to understand the skills they need to have in place in order to effect change;
  • provide a model for change because capabilities map directly to a future, desired organisational competency;
  • benchmark their organisation against others;
  • apply to investment decisions;
  • be used as a barometer of capability development.

Developing innovation capabilities can prove challenging; however, once they are institutionalised, it has the advantage of strongly embedding innovation within the organisation. The paper asserts that there are a number of key measurements to assess the innovation capability of financial firms: namely content, platform, leadership, strategy and externalisation.

The white paper provides innovation leaders at financial institutions with a useful benchmark, at a time when developing a set of Key Capability Indicators has never been more critical. Download it here.

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I was invited at the 7th Banking Innovation Forum in Vienna to speak on Innovation. The title of my talk was “Innovation: from tactics to strategy”

I have posted the deck on Slideshare

It was an interesting audience, with most people coming from Central and Eastern Europe, with some interesting case studies from Paolo Barbesino from UniCredit in Italy, Carlos Gomez from Activo bank in Portugal, Marcel Gajdos from Visa Europe Czech Republic/Slovakia, Efigence in Poland, and Wojciech Bolanowski from PKO Bank Polski. I made quite some notes, and if i find the time to make a post on it, i will.

Luckily, my fans are out there to help me. I planned write something about my talk as well, but Wojciech Bolanowski already did that in his great LinkedIn Post here. I have cut and pasted his post in its entirety, as it captures well what i was trying to convey in that presentation. Thank you so much, Wojciech, much appreciated😉

+++ Start post Wojciech

Inspire other people, think differently, create spaces where people come alive, ship to customers; as well as bravery, prototyping, events, capabilities and clarity – these are ingredients for successful innovation within big organization; at least according to excellent speaker and Innotribe Co-founder Peter Vander Auwera.

How to innovate in the shadow of behemoth?

marriott

Peter spoke on the first day of 7th Annual Banking Innovation Forum by Uniglobal in Vienna Marriott Hotel (as pictured above). He was keeping the audience extremely focused and interested. The subject was complex and of great importance: how to make really BIG organization innovative. As Peter put it in an outstanding rethoric figure: “how to make babies”. I would like to add: how to make the babies when you are well-known, established, serious and successful one with huge legacy and obliging history.

The questions are (usually) much more important than particular answers, so there is not my goal to report Peters’s solution in details. What I would like to point out is the question itself. Today, in the fast-running world of fin-tech start-ups and quasi-banking innovators almost every bank is big enough to raise this question to itself. Is it enough to inspire other people with your disrutptive ideas? Is such inspiring even possible in organization too big to change itself spontaneously? What could possibly happen if you think differently from dominant thinking styles?

Obviously, being innovative within mammoth-size organization is a big challenge and requires specific attitude and social skills. As I understood one of the Peter’s suggestion is to create appropriate team which become the centre and engine of the process. The brave, capable team with clearly set culture of “rather be failing frequently than never trying new things” to quote Peter’s presentation. Some important tools to do so are special workspaces, integrating events and ways of building true alignment.

Bravery – the slide of the presentation. Source: Uniglobal

How to gain executives’ support?

The presentation was full of insider stories with some of them concerning interactions between innovators and the board members. Those were a great lesson of struggle which, I think, at least to some extend, any innovator should expect and be prepared for. The very useful take-out was about prototyping and commercial launching of innovative products. The prototype should be, according to Peter’s best practice, as vivid and identical with the final product as possible. No more “Power Point Prototypes” unless you would like to fail. What’s even more – prototyping is just a step to the real strategic goal – to deliver real, commercial product and give it to customers. “Go out of the sandbox” is another great statement I heard from the speaker. Indeed, today environment of fast growing and alternating product propositions demand being “on market”. The Grand Jury of customers has no time to screen through pilots or prototypes; every company should be ready to risk and show its innovation as soon as it is delivered. In my opinion this is extremely important to realize. Shipment to customers what is already prototyped is the crucial part of execution process in innovation. I feel it is striking and true, therefore I tweeted this immediately with hashtag #BAIF2015!

What about the reluctant middle-level-managers?

The next splendid remark is about mid-level managers’ attitude toward change. For them the main goal is “too keep any changes far away of the plan”. It is understandable and rational. For manager’s KPIs are target-related, they try to keep organization on the course to achieve them. However, any innovation process within organization creates the risk of change, which, possibly, could alternate plans and goals. This is the real challenge – to execute innovation in organization which mainly consists of medium-level managers. And execution itself is much more difficult and lasts much longer than whole creative process of gathering ideas, evangelization, internal promotion etc. What Peter stressed, and I agree fully, is thatin context of big organizations idea management process is easier and shorter than its incubation and implementation. In start-ups world there is exactly the opposite relation.

Start-ups as indicators

Start-ups in financial sector (dubbed fintech recently) occupied a lot of Peter’s presentation as he is involved in the well-known Innotribe@Sibos program. The event has attracted more than 340 participants this year. It is quite nice sample to show what’s going on in innovation. With four continental semi-finals (NYC, London, Cape Town and Singapore) it gives global overview and prime selection of activities. This could be a useful indicator for big companies to track the start-up trends and pick up something valuable from. For example in 2014 the leading areas of start-up activity were (despite a broad category of corporates/business services) investment management, lending, big data and personal financial management. It is a clear message to banks: there is innovation coming to your core businesses and it is technology-driven.

This post is inspired by presentation shown on of 7th Annual Banking Innovation Forum ; there is another one of this category, in case you are interested:

Collateral damage of 2008 – card revenues in CEE

Peter Vander Auwera on stage in Vienna. Source: Uniglobal

Linguistic disclaimer

I have written this text in English and I know my limitations. It is possible you find this post illogical, offending, unclear or too simplistic. It does not mean to be that way, so please blame it to my imperfect English skills. I am neither native nor perfect English speaking person . If you want to be helpful, do share your grammar, spelling, style and any other remarks with me. I would appreciate any contributing comment, especially if it came from native speakers.

+++ End post Wojciech

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Launched in 2010 by SWIFT Innotribe, the Innotribe Startup Challenge introduces the world’s brightest startups to highly qualified industry experts, banks and VCs.

Logo Innotribe

The Startup Challenge is a year-round programme featuring regional showcases in EMEA, Asia and Americas where participants gather for fast-paced company pitches, insightful discussions on emerging trends and innovation opportunities, and social networking events.

There’s no charge to apply or participate, so whether you’re an early-stage or a growth-stage startup delivering innovation to the financial industry, the Innotribe Startup Challenge is the best way for you to connect directly with the most important investors, customers, partners, and influencers.

Over the past 5 years, the Challenge has helped over 150 startups initiate over $300M in deals with SWIFT member banks and notable fintech investors. This year, we’re adding more value to the program with a Semi-Final event in Capetown to cover African-born innovations, and dramatically increased exposure to the 7000+ decision makers who will attend Sibos (12-15 Oct 2015 in Singapore) for both our 2015 finalists and our program alumni.

There will be four showcases this year:

Challenge-dates

During each showcase, the semi-finalists demo their ideas or new products, pitching directly to an audience looking for the best in class and voting for the top 5 companies who’ll get invited to the Grand Finale, taking place at Sibos, the world’s premier financial services event organised by SWIFT.

Due to the support of our sponsors, the program continues to be free to startups, investors & financial industry decision makers. You can learn more about the 2015 program here: www.innotribe.com/startup-challenge/.

The deadline for submissions is 22 February 2015.

This is the last call for FinTech Startups worldwide to reserve their seat for one of the best FinTech competitions out there!

So, please spread the message to all FinTech startups to apply right away because there’s only 10 days left until our deadline.

Apply-Now-Button

The successful applicants will be announced in April 2015.

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