Fintechs and Innovation
When it comes to innovation, its importance to success is by no means new. Already in the ‘60s and ‘90s, managers and researchers have given innovation a key role at the forefront of successful entrepreneurialism, yet with the rise of the above trends its importance over the years has accelerated. Its importance can be traced to the growing investment by firms – between 2005 and a good decade later, the innovation spend by the globe’s 1000 largest corporates increased from $400 billion to over $700 billion. It does, however, not all come down to big money – an analysis from Strategy& reveals that big spenders are not necessarily the most innovative, which allows for discussions about which other key elements determine the success of internal R&D or corporate venturing activities.
To make matters more complex – despite all the knowledge, theory and best practices with regards to innovation management – studies show that a large share of programmes linked to innovation either fail or do not realise all their objectives pursued. Dozens of factors contribute to this, which typically vary per region, organisation type and size and innovation product/service, and again researchers have been able to identify the most important factors contributing to the failure of the programmes. In other words, successful innovation, according to many, not only requires that the right contextual and programme factors are in place, but also that the known barriers to innovation are mitigated. With so much under consideration, it comes as no surprise that CxO’s and managers still struggle with the phenomenon on a daily basis. The FinTech industry provides an interesting case in point where innovation is still at the forefront of its potential, and valuation of new business opportunity is surging.
Managing the Networked FinTech Organization
To help professionals successfully manage innovation, the FINDER programme reviews a large number of models and researches on the topic, and looks into the dynamics of a diverse set of organisations. However we view upon the grand challenge of ongoing innovation, also in the Fintech domain, businesses have two reasons to reorganise. The first stems from the wish to innovate. The second surfaces when things are not going well and people need to be laid-off: how can we limit the damage? In both cases it will be useful to map the company’s innovation-DNA. Improvement – which is always the goal – starts with new ideas. And only when you know where these ideas enter the organisation and how they spread, can you redeem them. The use of an Organisational Network Analyse (ONA) offers a solution: the model shows where things happen and where not.
As part of the work of this ESR and extending on prior work featuring amongst others in this book we illustrate how managers can – with the help of social network analytics – identify key processes and information flows, and how they can eliminate the information barriers within organisations that derail innovation objectives. With FinTech initiatives less and less constrained by traditional organizational boundaries, we zoom into the collaborative efforts between small firms and large incumbents alike. ‘Massive jumps’ in innovation activity and performance can be achieved by putting people together who ordinarily do not communicate, or by introducing a ‘forced communication governance’, our exploratory work already suggests.