How innovation labs are helping organisations think like startups

We delve into how Westpac, Commonwealth Bank and others are finding ways to drive innovation across the business, all in the name of the customer

Sustainable innovation: Commonwealth Bank

The Commonwealth Bank has also opened an innovation lab, which has been running for six months. Its head of innovation, Tiziana Bianco, says the Lab is part of a strategy to ensure the bank fosters sustainable innovation by allowing staff to get involved on projects.

“We don’t believe innovation is a department,” Bianco says. “We believe from the top down that it’s everyone’s responsibility and everyone’s role.”

The Lab is divided up into four areas for idea creation, user experience testing and problem-solving with clients. Cross-functional teams are drawn from across the bank, along with external subject matter experts from industry and academia, and the startup community.

“We have CIOs and CMOs coming in from our clients and working with counterparts within our organisation to really deepen the relationship,” Bianco says. “It’s about deep-diving into any problems they have within their organisation or their industry. Or it can simply be a discovery day, where how the two organisation work together to co-design.”

Having the external viewpoint is particularly important to CBA, says Bianco.

“We understand that ideas are not always going to come from within,” she says. “The closer we can be to our clients, our business partners, our startup community and our staff, the more we are going to reap the benefits of those ideas and ensure we stay relevant.”

Bianco says the cross-functional structure of the Lab reflects the tearing down of functional silos within the bank itself.

“Technology, product and marketing really need to work closely together to make sure we understand what customers want, how to speak to customers, how to create for customers, and then how to operationalise those particular solutions for customers,” Bianco says. “We very much understand that each of disciplines when working together can bring more value to the customer.”

While the fit-out of the Lab took only six weeks, the planning stage took six months, as the bank strived to ensure it had the model right. To date, more than 12,000 people have come through, including many from outside of the bank.

“It has superseded some of our expectations in terms of the volume of work and the collaboration hat has come through,” Bianco says. “We are at 90 per cent utilisation, which is fantastic. Originally we thought it was going to be a slower ramp up.”

Increasingly, the facility is being used for processes which were not originally envisioned, including a recent request-for-proposal session with six suppliers, she says.

“It was quicker and we received better ideas than we would have if we had sent it to them individually, and everyone was really transparent,” Bianco says. “So while there were competitors in the room, they worked closely together to understand what they can do collectively, as opposed to what they can do individually as their own company.

“Over three days, we ran a hothouse and they came up with a prototype at the end of it.”

The user testing facility of the Lab has also been employed by the marketing team to test campaigns on a sample audience.

“If we are putting a Facebook ad together, we can test that internally or even test that with select customers before we even put that out to see what the response would be,” Bianco says.

Service providers as innovators

While not every organisation can afford to have its own dedicated innovation lab, a small market has opened up for service providers to take on that role on behalf of clients.

This is the intention behind the Innovation Lab created back in 2008 by Australian mobile marketing and technology developer, TigerSpike. Since then, the Lab has helped companies both to produce innovative prototypes and products, and develop a commercialisation path.

TigerSpike’s head of innovation, Oliver Palmer, says a successful lab brings together multiple teams from across the organisation and combines them with external perspectives.

“It is really important you don’t just have the strategic thinkers or IT people,” he says. “We have run a couple where we had a person from legal, a person from the marketing team, from operations, and IT, as well as TigerSpike.

“The person at legal said she had never been at a workshop before, and legal was never involved in these things. She had a lot to contribute and gave a really different perspective, which meant as soon as we created a prototype it could launch in the market, rather than contravening any laws.

“It’s about involving people who are going to be involved all the way along the process.”

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