From bracing for change to embracing change

Josh Linkner is used to skepticism when he talks about the role creativity plays in transforming business from every angle, from profitability to corporate culture. Yet where many a so-called expert speaks in generalities and cute proverbs about Zen masters and teacups, Linkner has something any banking professional can appreciate: hard numbers to back up his ideas. In garnering more than $200 million in exit value for his four tech properties, he’s made believers of leaders all the way up to U.S. President Barack Obama, who honored Linkner with a Champion of Change award in 2011.

In this second of two parts, the New York Times best-selling author and keynote speaker at BAI Beacon 2016 talks about how banks can embark on a revolutionary path to innovation in a lightning-speed digital world.

BAI: Where should banks start in working creativity into the business mix?

Linkner: The big idea is around leveraging and harnessing that creativity right in their midst. Bankers especially think about resources: head count, assets, how many branches you have. But there is also an untapped resource you have within the bank—and that’s the underutilized resource of human creativity and building an environment that fosters it rather than restricts it.

BAI:  Yet the words “banking” and “change” don’t always seem to mix well.

Linkner: It’s an existential threat, no question about it. But when you think about change, everyone will need to embrace the new world order, and those who do that right away will reap the benefits and advantages. Think about the fax machine. The guys who bought them first were ahead of the curve and reaped the rewards. A year later, fax machines were still the same price. But if you bought one, you had no advantage because by then, everyone had one. So with change, it’s not a question of “if” but a question of “when,” and those who embrace it now are going to benefit the most.

BAI: Are there industries with similarities to banking that can serve as an example?

Linkner: There are many related industries doing it and at my talk I’m going to share some real world examples in action. Health care, for example, is very regulated and has a complex relationship between insurance companies, patients and providers. But some people are doing spectacular, creative things, and it’s something for the banking industry look at. Before we lived in an environment of compliance; today we live in one of creativity.

BAI: What about the intimidating notion of banks seeing change as a major initiative?

Linkner: It’s often a big blocker. They think of creativity and disruption as enormous, scary and overwhelming—so they do nothing. But my concept is to take everyday, innovative steps. It’s about creating a culture that takes responsible steps—lots of little baby steps—rather than bet the farm. Try 100 little things and from the data, see what gains traction. There are many small ways to move forward.

BAI: Where does that start?

Linkner: Banks should allocate time, resources and energy to stimulate some of the mental stuff. In a portfolio you wouldn’t put it all into  bonds; that would be too conservative. The way startups think is, “How can we try a lot of little things, throw them against the wall and see what fits?” You can make what I call “micro-innovations,” from the hours in your bank to how checking accounts work, and when they’re added up they can lead to big things.

BAI: But won’t other banks just copy what’s working?

Linkner: When I was building my company, I used to say, “There will be a company that comes along and puts us out of business—and that company should be us.” It’s all about “disrupt or be disrupted.” That’s an ongoing process. And it’s just the world we live in today.

BAI: So you’ve preached improvisation and real-time innovation. Is that how you plan to handle your keynote speech?

Linkner: That’s the great thing about my playing jazz guitar; you have to adapt to the surroundings. So I’m not going to bring “speech number two” and the wind-up doll. Once I get a sense of what’s going on around me, I’ll be tweaking and adding things right until the moment I go on stage.

Part 1 of this interview, can be found here.

Lou Carlozo is the managing editor at BAI.