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If all the Bank IT managers were Googlers |
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Friday, 07 March 2008 |
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Although a much younger company than most banks, Google offers a great
example of how to keep innovation flowing.
They actually empower their staff to
help the company innovate and develop. One of the reasons Google is
tremendously successful is because of “20% time,” which allows people 20% of
their day to work on their own projects. Some of Google’s most widely used
products including Gmail and Google News have come out of that time. Think
about it: it’s a virtuous circle. Getting 20% time is a benefit for employees,
which attracts more applicants who appreciate the 20% time, which allows Google
to be more selective with who they hire, which gives them better staff, which
allows them to innovate even more through 20% time. Additionally, Google
management buys into it and their enthusiasm permeates the company.
Now think about if you did that in a bank…
John Reed from the Citibank days of Citi, was a huge believer in innovation. He had setup an
entire advanced development group (ADG) within Citibank that was constantly
looking at technology and figuring out how to develop new products and services
for customers to differentiate the company. The group was known for having some
of the best and brightest in the bank and a lot of Citibank’s award winning
online banking platform came from that group. Reed left shortly after the
Citigroup merger, and predictably, the ADG was soon disbanded. Ironically, now
the stock is nearly at pre-merger prices and Citi is known more for its US$XXB
in credit exposure than the fact that they were the first bank to deploy an ATM
in 1939. Innovation in banking is key
and ADG was Citibank’s ‘20%’.
Too often, IT departments are hamstrung by micromanagement.
They could take a lesson from Google as well. If you hire people that you can
trust who are good at their jobs and then empower them, they’ll perform. Give them the tools they need to achieve them but then get
out of the way. Set goals and targets at the beginning of the quarter and
measure them at the end.
Of course all of
this is a bit optimistic. Banks these days gets a lot more scrutiny than Google
ever has in terms of costs and it’ll likely be awhile before any of that
changes. However, with a little more flexibility, empowerment and the
recognition of the importance of it, real innovation in banking can happen.
It did for Citi.
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