Innovation is the key to success for any company. But with innovation also comes a need for new leadership skills, new people skills, new processes and a focus on new opportunities. Even though the banking industry is not known for promoting a culture of innovation, it is affected by new business models, the fragmentation of traditional services and changing customer expectations. Existing models will be challenged by a strategic rethinking process. To be successful in this new customer-oriented era, banks should start to develop new services to drive innovation and meet customer expectations. When adopting a customer value-oriented approach, bank managers need to find a way for employees to stay engaged, motivated and connected in order to achieve competitive advantages. If employees do not have the same set of information or skills, they need to work closely with each other. The challenge for a bank striving to become an innovation leader therefore is to bridge the regulatory requirements and at the same time allow innovations to be created. “Translating” an innovative idea or concept into a regulated product, service or process is an essential skill in such a situation. That might sound simple, but it is certainly not easy to overcome internal and external obstacles. Killing an innovation or an idea is easier than working for that idea – maybe then showing ownership for a product or concept which might turn out to be a failure. In traditional cultures, failure might be a setback for an individual career. Bank leaders need to accommodate ways to identify new behavioral patterns in key areas and develop new business concepts to keep pace with these new developments. Moreover, they need to allow their employees to make mistakes. This way they will learn quickly, increase their efficiency and achieve the defined goals. Bank leaders need employees who are creative, who exceed expectations and who deliver outstanding results. It will be necessary to ask the right questions, regain the trust of the customers and convince them of the great performance and quality of the bank. But you cannot force innovations to happen, as they do not come about simply by devising new ideas, but rather by fostering a corporate culture that allows for innovations to be created and enhanced. Process efficiency and increased productivity will always be a business focus, which means that banks need to focus on new opportunities if they want to create an innovative culture. The biggest challenge may be the change from functional control behavior to economic growth behavior. Furthermore, the biggest leadership challenge is to move on from a “manager” perspective of doing only what is expected, toward a “leader” or even to an “entrepreneurial” perspective of doing things the right way and moving forward into new and uncharted territory. Almost two years after the acquisition by Groupe BPCE, I conducted a team survey, asking for the “pain points” within the Fidor organization based on the following questions: What drives you crazy/makes you angry on a day-to-day basis? What hinders you from working successfully to satisfy our customers? What are the rules you still find difficult to understand? Questions that would find tons of answers in any organization. More than 30 percent of the team responded to this non-anonymous survey. Even for a company like Fidor which cultivates a young and open corporate culture, the insights of the survey were quite surprising:

• We need to reduce the emerging blame culture to an open and trusting feedback culture.
• We concentrate too much on our own topics and need to refocus on the needs of the customer.
• We think too much in silos and must strengthen an open team culture.
• We allowed a culture of “I am not responsible” to emerge and need to reclaim ownership and accountability. This change of course requires managers who are leaders and who can convey and explain these requirements and expectations.
• We need to change from a state of being “shock-frozen” (post transactional) to being again more flexible, agile and quick. Unsurprisingly, we also need to reduce our approach from only “risk-centric” back to a balanced approach that allows more “customer-centric” and “business-centric” activities.

All those points had been addressed subsequently in leadership training. Those leadership training courses focus mainly on change, and change management as an opportunity seems to be our only constant. And innovation means change. Not new at all, any (new) culture in a company can only be brought about by a good example being set by its leaders. Finally, implementing an innovative culture within a bank is challenging because innovation comes at a risk, a risk that could “cost customer´s and shareholder´s money”. This worst-case scenario must be avoided at all costs. The vast majority of bank managers try to avoid that worst-case scenario and hence innovation by hiding themselves behind regulations, pretending that regulators would not “allow” innovation. I doubt whether that is the right response and I know that this simply is untrue. Our response at Fidor is that we look beyond the horizon and allow innovation to happen. We openly communicate, for example in recruiting discussions, that it is part of our culture to see the upside, not only the downside, of change and of innovation. Preserving such a culture is a challenge. It is not something we can take for granted, which is why we as leaders have to fight for it day after day.