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Disruption is around the corner: how to create an innovative culture to survive?

The following case study was one of the most highly rated presentations at Efma’s recent Banking on Innovation Conference.

This case study is about disruption. At the moment, it feels as if the banks are getting together, having a nice dinner on a beautiful large ship, and the orchestra is playing a nice tune but we are heading towards something that could alter everything. The name of the ship is the Titanic.

slideshareA huge change is coming. It’s partly due to the new generation; partly due to new technologies; and partly due to entering a new era of banking. Rabobank asked Accenture to look at the potential impact of start-ups on our budget and the revenues we earn. Accenture predicted that the start-ups that appear in the next five years, along with new technology, could potentially reduce our earnings by a third. This would mean the end of ‘business as usual’ and probably the end of the bank.

Financial institutions have already been warned about this. Bill Gates famously said that people need banking but nobody needs banks. Brett King has a radio show in which he has a lot of presentations about breaking banks. If banks want to survive the iceberg ahead, we need to change direction and transform ourselves.

Bank transformation

So, how is Rabobank trying to transform itself?

1) Co-creation

CoCreationThe first step is co-creation. This has to involve social media. Many banks still aren’t really engaging with this, but we all have to do it – because we have to engage with our customers, not only in the offline world, but also in the online world.

So, the first thing that is needed is to really listen to what your customers are saying. This includes involving them in the creation of new products. We have therefore developed a user experience centre at our branch, where we can ask customers to join in, test products and help others to develop new products and to challenge our services. This approach can be used both in branches and also online.

We therefore have our own platforms where we ask our most critical employees and our most critical customers to help us to develop new products and to challenge our services. But we also want customers to help each other as well.

2). Autonomy of employees (intrapreneurship)

autonomyThe second aspect involves giving employees more autonomy. We are doing this because as a bank, we are also becoming a really good orchestra: everybody knows how to play their role and they only have one specific role to play. They know their function – for instance, if their job description is as a business analyst, then they have to be a business analyst. If they are a communications, IT or marketing person, they have to concentrate on just that role.

So the orchestra is playing the tune, they know what to do and when to do it – but I believe that we need to work more like a jazz band and to improvise and to look at people as humans, not as job descriptions. Because people have many different experiences and skills, so we should try to nourish those.

Our new offices are meetingplaces They are  very open space and it’s completely designed for meeting other people, but it can work anywhere, at any time. For us, it’s very important to give people the freedom to choose where they work and how they work.

Of course, we tell them the goals of our organisation and what we want to achieve. But we don’t tell them how to do it. They can choose how to do it. For example, we have an internal facilitators’ network, which consists of employees (who could be legal employees, marketing employees, IT employees etc.) who love to facilitate sessions.

facilitators networkWe used to hire facilitators from outside our company but now we have our own large network of 200 employees and each of these employees takes part in one or two workshops each year. This saves us money but it also enables them to learn about other parts of the organisation – so it’s about exchanging knowledge. We have internal brainstorm facilities where they can make use of these beautiful rooms for holding these workshops.

We also have a coaching network and employees can coach each other and help each other through the transformation. We try to let our employees follow their heart and we share our talent with other companies. They will get involved in a project with a company for a couple of weeks or a couple of months and then come back, and they have learnt about that company and can help us again. Or we invite specialists from another company to come and work for us. So it’s about sharing and giving our employees the feeling of entrepreneurship so that they aren’t just limited by our organisational boundaries.

coursesWe also provide innovation courses. We start with the students who apply for the course and check their specialist skills and see what they want to develop. They don’t need to develop skills that they don’t have, and they can develop skills at which they are already very good.

Then we specify the topics we want them to learn. For instance, it might be about lean start-up, or the innovation funnel, or design thinking. Who is going to teach it? We ask the group of about 20 students what they want to teach to the other students and the student becomes a teacher. They can choose topics they love or topics they aren’t familiar with, so they have to learn extra hard – not only to understand it themselves but also to teach it to the other students.

It’s a really nice environment: we have 24-hour workshops where these students help each other to become more innovative. We let people explain what they are doing. For instance, as someone involved in innovation, I make a weekly innovation movie ( ) about the previous week’s start-ups and trends.

We also have internal ‘hackathons’ where our employees are given 24 hours with no managers allowed in. That’s very important: there is just a team that they form themselves and then they think of a challenge and try and work out a solution to it.

When they present these solutions to the management teams, the management teams are astonished and wonder how they did it – and why it hasn’t been done before. The employees reply that it’s because it wasn’t part of their role and they didn’t have the project codes or budget to do it. So there is a lot of hidden power and a lot of potential within the employees of a bank. We just have to give them the freedom to unleash it.

3) Collaboration and networking

networkThe third topic is collaboration – because responding to change isn’t just about co-creation with your customers, or giving more freedom to your employees. It’s also about reaching out to this new community, to the new start-ups. As a bank, we are a large organisation heading towards a huge storm or iceberg. Like the Titanic, bad things can happen to large vessels.

However, the picture above shows one little vessel helping and guiding the big vessel. That gave us an idea: why not use little vessels or pilot boats to nudge our large vessel or to help to steer us?

That’s why, for example, Rabobank works closely with MyOrder, a Dutch start-up that has a payment wallet. For us, this is a really nice way of creating new ideas and learning about their way of tackling problems. We learn about their culture. Another thing we’ve done is to join ‘startup bootcamp’. We not only provide our own accelerator programme but work with MasterCard and other banks. We ask start-ups to put forward their ideas and we will help them. We will mentor them and help them to connect, but it’s also about reverse mentoring. It’s about learning what they are doing and about how they are doing it and connecting them with our employees.

pilotboatsSo this is really useful for us. We alsoorganised the first Dutch Fintech Hackathon (http:// : after holding internal hackathons for three years, we are now doing it outside our company. We also had teams from other banks applying for this, so it’s really about how we can develop these ideas together for our industry.

We looked at how we could connect this innovative ecosystem outside our company and how it could become a going concern, as this large vessel needs to keep moving forward. We have to find a way to bring this new innovative movement and these new trends inside a company more quickly. My concern is that we’re still not fast enough in doing that.


summaryIn summary, there is a new generation, a new technology, and a new era arriving. To respond to the changes that these are bringing, a bank needs to co-create, to give its employees more autonomy and to work together with others in the world outside banking.

One of the results of following this approach and from working with MyOrder is Sidekick, a new impulse terminal that we’ve developed for merchants that use iBeacon technology. It enables the merchant to see more information about new customers who are going to pay in their store.

sensesWe are also experimenting with time-based currencies, with a Dutch platform. This is a new type of currency, with new values. Meanwhile, like other banks, we’re looking at Google Glass. I think it’s very nice but it’s more for people who have to use both hands for their work (such as surgeons or car mechanics). Finally, we’re also developing a new online platform with more transparency, which doesn’t look and doesn’t feel anything like any bank (at least in the Netherlands). PhilThe starting point of this new platform is the client. So it’ss not the environment of the bank, but the environment of the client.

Blogpost writen by Phil Allcock.

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