Knowing when to stop: bringing start-up disciplines to the land of plenty
You go into corner offices these days and you see copies of the Lean Start-up, printouts of IDEO material, maybe even a copy of Sprint.
We are learning the lingo.
These are usually the offices of the sponsors of innovation programmes, agile roll-outs, “change the bank” initiatives and pilots. They will say words like “pivot” and “minimum viable product” and they will speak of iteration. They have digested the value of failing fast and learning just as quickly. And they are Sponsoring, capital S, introducing these tools into their organisation.
Which is, no hint of irony, awesome.
There is only one problem.
Start-ups don’t do any of that because they are smart and wise. They don’t even do it because they are naturally agile. They do it because they have no choice. They are bootstrapping and money is tight. They fail fast because they don’t have the resources to fail slow. They iterate because they don’t have the runway for elaborate errors. They pivot because the pressure of potentially going out of business altogether is crushing them.
Now bring all this to banking.
Applied to the land of plenty – despite our cost reduction targets, none of us are faced with a ticking clock and the possibility of money running out so that we may not be able to pay the office rent next month – you realise deciding to be iterative is one thing, knowing when to actually call time on each stream of effort quite another. You realise that timing for those things is not intuitive. And in the absence of a figurative time bomb upping the pressure, not at all clear.
“Nanny Ogg knew how to spell banana, she just didn’t know when to stop”
You know what I mean even if you don’t know your Pratchett (though if not why not?).
Assume we are doing this agile, iterative, pivot-like-a-start-up thing right – we are not, but it’s ok, it’s not an exact science and if by doing it right you mean proceeding without a hitch then rest assured (or not) that nobody is doing it right. Everyone is having a rough time of it, iteration may be universally accepted as useful but it is not a pleasant thing when you realise you went the wrong way. Sure the alternative to failing fast is worse, but failing is no cake walk, even when the stakes are comparatively lower.
For us, the story is nowhere near as dramatic. At the end of the day, if our MVP proves to not be all that viable and we need to iterate twice, all we get is an amber flag on our quarterly report. We don’t need to brush up a CV and look for a day job because the business coffers have run dry.
I don’t mean to be over dramatic.
But I have, over the years, seen banks doggedly avoid pivots or pivoting too soon and not learning from it either way like a start-up would. Because they don’t have to.
I have seen banks gather too few requirements because it didn’t feel like real work. Or gather to death because they hired an agency, or some hipsters and a cartoonist and it became a thing they tracked on its own right. I have seen projects start tentatively with so much information as to have no focus, and projects start with an iron fist but no data points. Each and every one was working to a timeline pre agreed with the folks who are paying for all this agility, in a format eerily reminiscent of the quarterly result slides and the senior risk committee update.
So how do you know when the time is right to pivot? When you need to iterate yet again even though you were sure you had it this time?
When do you know if you should stick with it a bit longer? When do you have enough proof points?
How do you know if it is too soon? How do you know before it is too late?
The start-ups don’t know either.
They are driven by the law of diminishing returns and their diminishing resources. Their passions, ambition and unpaid bills. It is stressful, it is scary, the stakes are high and each decision is a life and death call. They don’t know if the call is correct. They don’t know if it’s too soon, too late or just right. They don’t know what will finally work.
The one thing they do know is that it is do or die. That the clock is ticking and time is of the essence.
If money runs out then it’s definitely too late. They know that.
And they know that the only way to win the game is to stay in it. So they pivot, release and iterate, reflect, change and learn. Fast. Because the alternative doesn’t bear contemplating.
They also know that too soon may be hard to fix. But too late is impossible to fix.
And you can’t learn that unless your back is against the wall.
And ours isn’t. Not in the same way. Not over the same things.
So maybe we shouldn’t try.
Maybe we are learning the wrong thing here.
If we can’t manufacture the pressure that leads people to fail fast, should we not be applying our considerable resources and the staggering talent residing inside our organisations to the type of problem that needs time, collaboration and investment?
Rather than trying to emulate something that is so far from what we are, why not seek to tackle something we will be uniquely suited to?
Maybe it’s time for the ultimate pivot.
Start-ups take on problems that to them feel big. And they do their best under that pressure. Maybe we should do the same. Not just by emulating behaviours but by adjusting for size. If we scale up the task, the pressure may get real. And then we can have a conversation about whether it’s time to pivot.
By Leda Glyptis
Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.
Leda is a lapsed academic and long-term resident of the banking ecosystem, inhabiting both start-ups and banks over the years. She is a roaming banker and all-weather geek.
All opinions are her own. You can’t have them – but you are welcome to debate and comment!