How Big Business Needs to Transform
Big business is dying. But you already know that from my previous discussion with Jeff Tijssen last week. I digged a little deeper into the issue with him to find out how big businesses need to transform to stay alive.
Last time we discovered that small teams are vital to the success of digital banking. The biggest digital challengers in the sector prove that every day. Small teams result in faster decisions and cut down on bureaucracy. The spaghetti legacy — layer upon layer of outmoded technology — mindset that crushes innovative thought in big business simply doesn’t exist in small independent teams.
When an idea doesn’t have to be passed through hundreds of different hands and approved by dozens more before even being tested, ideas are allowed to fail fast and move on to the next possible solution. At big businesses, bureaucracy gets in the way of good ideas, interesting ideas, and wild ideas that seem too crazy to work but do.
Another issue is focused on the lack of understanding by big businesses as to what their customers actually need. Jobs to be done is something we talk about a great deal at 11:FS, but it seems as though big businesses still don’t fully understand what it means. Big businesses need to start forming teams around customer jobs to be done rather than focusing on creating a product. It may sound counter-intuitive at first, but by focusing on the problem and finding an excellent solution for it, big businesses create a minimum loveable product (MLP) — similar to a minimum value product but much better because customers are involved in the product and intimately connected to its utility. It’s a difficult thing for big businesses to wrap their heads around because at their core, they’re risk averse. And that’s not necessarily a bad thing. Lots of people’s livelihoods are at stake in any big business. But without a seismic change that happens and happens soon, big businesses are destined to be overtaken by agile and reactive businesses that are able to create and deliver MLPs. However, that change requires an equally massive effort due to the impact of legacy technology and legacy thinking that’s hobbling transformation. If you don’t believe me then just take a look at what’s happened in the retail and entertainment spaces. Former juggernauts of the industry have collapsed or shrunk due to the power of digital challengers. Challengers who started small and grew immensely, by making sure that they made fast impactful decisions that test all sorts of ideas.
While rethinking how and what you do as a big business, especially a big bank, is vital to staying relevant in the current digital climate, it needs to be an on-going process. You can’t just roll out a jobs to be done program because that misses the point entirely. Unfortunately, for a lot of banks the truth is, if you want to get to where you want to be then you probably shouldn’t start from where you are. Rethinking processes and customer jobs needs to be, and is, a constant re-evaluation of what’s happening right now. And this is where big businesses fall down. They can never compete with the speed of execution and ability to execute that’s available to fintechs and startups. When compliance teams in big businesses are bigger than an entire fintech the scope for flexibility and speed shrinks dramatically. And that’s the case for every incumbent bank in the world.
But this doesn’t mean that there’s no hope for big businesses. There are two main things that fintechs do which are are vital for banks to survive. Firstly, fintechs provide useful tech for banks that solve niche issues, and secondly, fintechs can help banks to rethink and how things can be done. Behemoth banks may not be able to react in an agile way, but with the help of fintechs who can show them the path they’ll be able to remain as major players in the game. Fintechs can take big businesses on a journey, through the customer acquisition and retention process, and show them how to create a minimum loveable product every time. However, this also requires big businesses transforming the way they think in regards to outsourced projects. It can’t be about burning so much of an investment in bureaucracy that every project has to be perfect. It’s about coming back to the overarching issue time and again to discover what works best. If you’re reading this and you work for a bank or another big business then you already know that you have to change. Contact us at hello@11fs.com and we’ll show you how to do it in the real world.
Focus on the right job
Another issue is focused on the lack of understanding by big businesses as to what their customers actually need. Jobs to be done is something we talk about a great deal at 11:FS, but it seems as though big businesses still don’t fully understand what it means. Big businesses need to start forming teams around customer jobs to be done rather than focusing on creating a product. It may sound counter-intuitive at first, but by focusing on the problem and finding an excellent solution for it, big businesses create a minimum loveable product (MLP) — similar to a minimum value product but much better because customers are involved in the product and intimately connected to its utility. It’s a difficult thing for big businesses to wrap their heads around because at their core, they’re risk averse. And that’s not necessarily a bad thing. Lots of people’s livelihoods are at stake in any big business. But without a seismic change that happens and happens soon, big businesses are destined to be overtaken by agile and reactive businesses that are able to create and deliver MLPs. However, that change requires an equally massive effort due to the impact of legacy technology and legacy thinking that’s hobbling transformation. If you don’t believe me then just take a look at what’s happened in the retail and entertainment spaces. Former juggernauts of the industry have collapsed or shrunk due to the power of digital challengers. Challengers who started small and grew immensely, by making sure that they made fast impactful decisions that test all sorts of ideas.
It’s never over
While rethinking how and what you do as a big business, especially a big bank, is vital to staying relevant in the current digital climate, it needs to be an on-going process. You can’t just roll out a jobs to be done program because that misses the point entirely. Unfortunately, for a lot of banks the truth is, if you want to get to where you want to be then you probably shouldn’t start from where you are. Rethinking processes and customer jobs needs to be, and is, a constant re-evaluation of what’s happening right now. And this is where big businesses fall down. They can never compete with the speed of execution and ability to execute that’s available to fintechs and startups. When compliance teams in big businesses are bigger than an entire fintech the scope for flexibility and speed shrinks dramatically. And that’s the case for every incumbent bank in the world.
Find hope in a fintech place
But this doesn’t mean that there’s no hope for big businesses. There are two main things that fintechs do which are are vital for banks to survive. Firstly, fintechs provide useful tech for banks that solve niche issues, and secondly, fintechs can help banks to rethink and how things can be done. Behemoth banks may not be able to react in an agile way, but with the help of fintechs who can show them the path they’ll be able to remain as major players in the game. Fintechs can take big businesses on a journey, through the customer acquisition and retention process, and show them how to create a minimum loveable product every time. However, this also requires big businesses transforming the way they think in regards to outsourced projects. It can’t be about burning so much of an investment in bureaucracy that every project has to be perfect. It’s about coming back to the overarching issue time and again to discover what works best. If you’re reading this and you work for a bank or another big business then you already know that you have to change. Contact us at hello@11fs.com and we’ll show you how to do it in the real world.