2 minutes
Sometimes we psyche ourselves out about innovation. Just getting better isn’t good enough, we fret. We must be revolutionary—or else! This attitude is less than helpful, according to a recent article from Harvard Business Review.
“Business model innovation is hard. But managers make it harder when they think about it only as radical industry reinvention,” say the authors of “The Best Digital Business Models Put Evolution Before Revolution.” They offer three ways to evolve your model instead.
“Unbundling existing value propositions” seems most relatable to credit unions, but I bet they could all work. Read the article and see what you come up with. I’d love to hear your ideas!
In the article’s unbundling example, a Japanese insurance company learns of consumer need for very short-term insurance—to cover a ski trip, for instance. Using mobile and location-based technology and working with a partner, the company parlays this unmet need into One-Time Insurance and provides it via mobile app.
At a credit union, unbundling might translate into serving your particular market—or a portion of it—with a product no other financial institution would consider. A number of years ago, for example, $84 million Carolina Postal Credit Union, Charlotte, N.C., endeared itself to its rural mail carrier members by offering special loans for the used cars they frequently buy to drive on their routes. If you’re a university CU, you might consider cementing your relationship with graduating seniors by offering a one-year streamlined, small dollar loan for a professional wardrobe or a cross-country move to that first job.
While evolution is important, credit unions shouldn’t completely neglect disruption, says Andrew Downin, innovation director at Filene Research Institute, Madison, Wis., suggesting instead a well-balanced “portfolio” containing three types of innovation: incremental, architectural and disruptive. Read how this might work, plus how credit union leaders are developing “climates of creativity,” in this issue’s cover story, “New Product Innovation”.
Mary Auestad Arnold
Editor and Publisher
P.S. Want to rev your innovation mindset into full gear? Attend CUES’ Strategic Innovation Institute™ I, hosted at MIT, Sept. 20-25. Learn more and register.
