Johnson Idesoh, Absa Group’s Information and Technology chief, shares his thoughts regarding successfully implementing innovation in business.
Global Finance: What mandate were you given when you assumed your current role?
Johnson Idesoh: The financial services industry on the African continent is extremely competitive. It has to be, because we provide for over 1.2 billion people on the continent, whose average age is less than 25 years. Absa has had businesses on the continent for more than 100 years, and our mandate is to ensure that we sustainably outperform our peers. This means we must be the home of the best talent in Africa and have the strongest partnerships to achieve this. I am working with my colleagues to define how we will contribute to the outperformance strategy. We are looking at where we are right now, how the Absa Technology community should be set up to respond effectively to this business strategy and what we need to look like in the future. I look forward to helping Absa reach its ambition of being a digitally powered business.
GF: Which features should a successful innovation plan have?
Idesoh: An innovation plan is essential to our outperformance strategy; it’s a precondition. This plan must be rooted in the purpose of your organization, acting as the compass as you decide which bets to place and for what reason. Africa is our home, so our plan is acutely focused on how we empower our customers and communities, and how we use technology and partnerships in technology to accomplish this.
The other aspect of an innovation plan is to recognize the importance of speed. We live in a world that changes at a fast pace, so a focus on outcomes at speed is critical; it is crucial to attempt, observe and then decide whether you scale or let go of the idea.
Lastly, our people are our strength, but for them to be set up for success, they need the right tools and resources to innovate.
GF: Is it better to have a dedicated innovation team or work with representatives across the business lines?
Idesoh: I would recommend both; it is quite a different capability to disrupt your existing business model. In this case, an explorer team is certainly required. How their objectives are set, together with how they are measured, is quite different from how the current business model is measured. In addition, the time frame of these models is medium-term, or about three years.
It is also critical that your existing business constantly innovates because customer expectations are continually changing, and markets present opportunities that the adept can tap into. The best people in your organization to sense this are your front-line employees.
GF: Which are the most common pitfalls that innovative organizations should avoid?
Idesoh: There are two common mistakes that companies make. The first is betting the farm—which means putting all the resources into one plan. By definition, innovation is unpredictable, despite all the best effects. Therefore, it is essential to have a portfolio approach, with an expectation that the majority will not scale, and those that do will scale disproportionately.
When you look at Absa’s approach, we have over 20 digital startup partners at any given time, and a few will scale every so often. So one needs a set of criteria to select what to focus on and another set of measures to help decide how long to proceed.
The second is measuring innovation efforts the same way as measuring everyday business; this inevitably leads to disappointment. Instead, innovation should be evaluated continuously, like any other company metrics. By committing to assessing innovation on an ongoing basis, you may motivate your employees to be more aware of the need for innovation and creativity.
GF: When should banks consider employing a head of innovation?
Idesoh: Everyone needs access to the services banks provide; they offer a universal service. Today, however, we see that these services are increasing and are provided by companies that aren’t banks as we know them. Disruption to payments and short-term financing, to mention a couple, is noticeable. This means that banks must ensure they remain relevant and evolve with speed to compete in the market, and this is where having the right talent is important.
To be set up for the future, you need the right technology. But to introduce the right technology, you need the right people. Innovation is a critical driver in technology, and I think now is an excellent time to look for someone to head up innovation on your team if you don’t have someone already. Engineering and architecture excellence is necessary, and as banks, we need to keep up with the other technology companies.
