How disruptive Innovation can be realized in Banking & Insurance

THIS IS AWESOME ©2016 1

Presented byStefan F. Dieffenbacher

München, 28.09.2016

How disruptive Innovation can be realized in Banking & Insurance Achieve digital transformation. Create profit. Become independent. Shape the future.


Company builder helping corporates to build up new digital business.

Focus: revolutionary, new offerings.

About me: Stefan Dieffenbacher

Currently running two companies:

Strategy / Exeuction Advisory focused on digital helping corporates to take their next step with their existing digital channels.Focus: evolution of existing.

Active investor through THIS IS AWESOME / private –currently active shareholder in four additional companies & startups.

Heavy background in FS:


Everything changes depending on whether you are working on a castle or a speedboat type of challenge, including:

§ Org structure§ People & their capabilities§ Approach§ Technology setup§ Customer approach§ Etc.

This presentation focuses on how to work as a speedboat.

Define your starting position: are you solving a castle or a speedboat type of challenge?

Your existing digital channels / banking platform / products / services.

Any future innovative or disruptive products or services.

Most castle’s (aka. large organisations) are trying to solve speedboat issues with their castle operating procedures. That is their prime point of failure.


What have corporates done to realize their own disruptive ideas?


Incubation vs. Acceleration


25% of European corporates have setup an internal incubator.92% of investments fail within 12 months*

>€4.5m lost

Idea … long process …

4.

5.

3.

2.

1.

6.

7.

8.

9.

10.

Business> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k only 1 successfulbusiness

9 businessesfailed/closed

* Study of large companies in EU – source: Gartner 2015


>€4.5m lost

Idea … long process …

4.

5.

3.

2.

1.

6.

7.

8.

9.

10.

Business> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k

> €500k only 1 successfulbusiness

9 businessesfailed/closed

25% of European corporates have setup an internal incubator.92% of investments fail within 12 months*

* Study of large companies in EU – source: Gartner 2015

Issue 1: ideas appear out of the blue typically supported by an organisationalleader (because he can organisefunding)

Issue 2: it takes the average organisation two years and millions of invest years to bring something alive.

Issue 3: Customer Validation is at best an afterthought. Ideas are untested till go-live.

An alternative (and much better!) approach


Start with 100 ideas (not with one)Test ideas with customers and let the best one’s survive

Number of Ideas

Outstanding quality of idea as a result of pivoting and selection.

Further, the idea is customer proofedand the business model is validated in practice.

100 10 1 to 3 min. 1

data drivendecision

data drivendecision

data drivendecision

Time + money spent


And be damn fast! Experiments cannot take 2 years to go live!

$ saved

$ saved

data drivendecision

data drivendecision

data drivendecision

$ saved

~ 4 months~ 6 months

Number of weeks

4 6 12

launch

Time + money spent


An overview of the proposed approach


The approach we are using is based on best & proven Silicon Valley methods

Based on your customer’s needs we identify typically over 100 new business ideas. The 10 best ideas are selected data driven.

The Minimum Viable Product (MVP) allows a validation at a larger scale and pivoting. Once customers have proven to love the product/service and are willing to pay for it, we consider the product/service investment ready.

Ideas are validated with real customers and in real life. In parallel we develop a business model. 1 to 3 best ideas are selected data driven.

We help you to scale the business with our execution know-how, our HR knowledge and the unique technology setup.

IdeaGeneration

Problem /Solution fit

Solution /Market fit (MVP)

Build &Scale Business1 | 2 | 3 | 4 |

100 ideas 10 ideas 1-3 ideas

4 weeks 6 weeks 12 weeks

Steve Blank„Customer

Development“KANBAN

MVP launch

MANAGEMENT Y


Let’s examine the key stages


Build &Scale Business

The proposed approach for New Product / Service development





IdeaGeneration


Solution /Market fit (MVP)1 | 2 | 3 | 4 |





MVP launch

MANAGEMENT Y


Innovation space

Define an “opportunity space” & create 100+ ideas(as opposed to simply starting with one idea)

Totally new business models

Major new product or service innovations

Minor product or service innovations Temporary micro-insurance

Micro-insurance

Property-insurance

Feeling & being safe

Insurance in general

Ways to being safe in retirement

Business view Customer view (examples from insurance industry)



A blend of best & proven Silicon Valley methods, used by companies like Google, Uber, Airbnb – adopted to large companiesThe proposed approach for New Product / Service development





IdeaGeneration







MVP launch

MANAGEMENT Y


Validate everything in practice with real customers. Go out on the street!

Users are co-producers/co-designers of the new products and services.

The alternative is desk-research (this is what Consultancies do). This however is typically very limited when it comes to innovative / disruptive ideas.

Partner

Awesome

Awesome Consumer

Awesome

Customer

Awesome

Awesome

Partner

Partner

Customer



A blend of best & proven Silicon Valley methods, used by companies like Google, Uber, Airbnb – adopted to large companiesThe proposed approach for New Product / Service development





IdeaGeneration







MVP launch

MANAGEMENT Y


MVP - Minimum Viable Product

Building a “Potemkin village” –the customer facing partof the business model

Key takeaways§ No integration with existing IT§ Potentially use an invented

brand for testing (as to avoid brand damange)

§ Get out as quickly as possible. Failing = learning


Build a Minimum Viable Product instead of a Maximum Possible Product – and then start pivoting to customer’s taste

Minimum Viable Product (MVP) Maximum Possible Product

FAKE IT UNTIL YOU MAKE ITSource:Left:http://www.dailymail.co.uk/news/article-1328863/Heart-Attack-Grill-Free-food-customers-weigh-25st.html,Right:http://www.heartattackgrill.com/images/6.jpg?crc=294938557- HeartAttack BurgerGrillLasVegas


“Silicon Valley isn’t a place,it’s a state of mind that we bring to you.”


Outcomes


new company

internal department

Potential outcomes / results

feedback product ideas feedback business ideas

line organizationAnd a lot of failures: fail fast! J

reintegration after growth

stay autonomous

new department

adaption by existing

department

Why is this successful?results are almost guaranteed due to the funnel

winning ideas are likely to be AWESOME, because they have seen many iterations

bad ideas drop out immediately

high cost savings

highly motivated employees

THIS IS AWESOMEWe are no consultancy - nor an agency.

We are entrepreneurs - with a holistic approach.

We prefer to execute, together with your team –rather then bullshit bingo and endless PowerPoint slides.

We do customer centric validation and pivoting, rather then academic market research.

We want you to succeed.


Let’s create winning digital businesses –togetherAchieve digital transformation. Develop independence. Create profit. And design the future.


Get in touch with us:

Leadership & Management

How disruptive Innovation can be realized in Banking & Insurance