FinTech glass half full; change story barely half written.

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A tweet grabbed my attention the other day:

In FinTech, Andy McLean is one of those guys who is just getting out there and changing things. Proactivity like this always needs to be respected and the ideas raised in his tweet were interesting. 

Another FinTech veteran – Brad van Leeuwen – later picked up the same point and endorsed it.

The idea resonated with me not least because I’ve worked at two very large and complex financial incumbents. Whilst there, I found myself seduced by the idea of drawing a line under the existing model and starting afresh. I wasn’t alone – perhaps it’s a natural reaction for all frustrated change agents who have insufficient confidence in their organisation’s capability to adapt.

But in addition to spending more time with FinTech challengers I’ve also recently met with enough incumbents who seem desperately willing to adapt to the future. I feel the past few years of FinTech activity has raised awareness of the need for change at a senior level. We may indeed have passed a tipping point and I believe more hope than ever may yet lie inside the existing industry.

For people like me who are unwilling (or unable) to give up entirely on the old world, there may be almost as much cause for excitement as there is about the new FinTech and digital-only ventures.

I tweeted as much.

My point was that, whilst I agree it’s certainly difficult to change the incumbent position, it’s not something we can collectively afford to overlook. Whilst I truly believe we need to splice new thinking, skills and execution capabilities into the incumbents, I can’t subscribe to the model where everyone needs to be tossed out.

Change is difficult and Brad asked the most important question: 

To introduce change, you need to have – and share – a clear vision for people to get behind. You must identify and convert the sceptics – quickly and convincingly.

At many incumbents, you’ll easily find a rich seam of people who have never worked anywhere else. These people are institutionally conditioned to a particular way of doing things. They have decades of experience – collectively they have centuries of corporate muscle memory and organisational scar tissue. To work with these people to help change such long-held beliefs is a significant undertaking.

A few years back, employee engagement surveys seemed to be everywhere. They’re still in favour at many organisations who subscribe to the principle of engaged teams being more productive.

Whenever I would review employee engagement reports, I was most frustrated by the middle (amber) section – the one which separated the fully engaged (green) employees from apparently fully disengaged (red) ones. This is where you find the coasters. They hide in plain sight, sharing their evident frustration with everything, yet unable to offer tangible suggestions about what could be changed. Many managers gladly celebrate increasing green scores and panic about red – ignoring entirely the amber zone which could well be widening in front of their eyes.

I’ve always looked at this differently. Reds don’t hold back when they’re taking the surveys. They have specific issues and they know what they are. They’re searching for someone who will listen. As a manager, this is a great position to be in,  because armed with the knowledge of what’s wrong you can actively do something about it. (You may choose not to, but at least it was a conscious decision.)

If you address the tangible concerns of the reds, they can quickly convert to being the brightest green. From disengaged to fully engaged – skipping straight past amber. They’re often influential and naturally loyal to the brand. By addressing their issues, you’ve created ardent advocates of your strategy and supporters of your leadership. They appreciate that you’ve taken the time to listen to them and respect them. This is what engagement looks like and what creates powerful platforms for adaptive change and execution.

Andy put me on the spot – looking for relevant evidence that this type of industry change was achievable.

I didn’t have a tweet-friendly answer, so clarified my position – that whilst I have myself been seduced by the idea of the clean slate, powered by goodwill and balance sheet – I don’t think it’s responsible of us to leave the mess [some of us] created behind. To do so will leave a distracting drain on resources and social goodwill unresolved.

Apparently this doesn’t seem – on face at least – to be an unreasonable position.

But I don’t believe that punishing the incumbents is an effective strategy.

I’m delighted about the huge amount of buzz and excitement being generated around FinTech. There are grass roots startups actually getting out there and doing things the banks should have done years ago. But if you’ve ever been excluded from the cool kids gang, you know what it feels like to be left outside. You may rationalise to yourself that you’re happy where you are, but what you really want deep down inside is an invitation to play. You may, like Groucho Marx, refuse to be part of any group that would have you, but if you’re invited, at least you’ve got the chance to forge new partnerships, ask for help, think and do things differently.

There is an enormous amount of opportunity and, I truly believe, great cause for optimism. What there is not, is an easy route to getting this done. New mindsets, investment and methods of execution are all required.

I’ve got a number of follow-up posts coming on where my optimism comes from.

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