Former First National Bank (FNB) CEO Michael Jordaan was instrumental in driving the bank's digital strategy and along the way learnt a few things about how businesses innovate.
Speaking at the Software AG Innovation Tour in Fourways yesterday, he explained that every industry is being disrupted at the moment and only the innovative companies will survive.
Jordaan, who now heads up private investment company Montegray Capital, says there is a digital revolution under way, and conventional thinking and leadership models will have to be put aside if business truly wants to adapt.
He says during his time at FNB, he learnt:
Ideas can be hard or easy to come up with
Innovation is sometimes about coming up with new ideas, says Jordaan, but even the tried and tested ideas can be hard to implement and convince people of their legitimacy.
Jordaan says he is an advocator of implementing daylight savings in SA; an idea that has been used in other parts of the world for decades. He says it could potentially result in a 3.4% power saving, which is the equivalent of more than 15 million tonnes of coal per annum and more than two Medupi-size power stations over 20 years.
But Jordaan's daylight savings push was met with resistance. When he spoke about it on the radio, a caller said it would never work in SA as it would confuse the cows.
Jordaan says typically coming up with an idea is the easy part, but actually implementing it in business takes a lot of effort.
Innovation can only happen in an empowering culture
Jordaan says if the environment is stifling and controlled, innovative ideas will not breed ? the company needs to be freeing.
This applies to countries and government departments too, he notes.
He gave the example of going into a home affairs department and, not having made a copy of his ID, he asked if he could use the photocopy machine behind the desk. The cashier refused and when asked why, Jordaan was told it was broken and had been so for two years.
These types of environments where employees are not empowered to do simple things will not inspire them to produce innovative business strategies, Jordaan points out.
Take risks and make mistakes
"Innovation means you are doing a new or old thing in a new way. And this means anything could go wrong as it has never been done that way before."
He says it is impossible to innovate if companies do not take risks. Employees should be able to make 'clever' mistakes - decisions that were thought through and superiors were aware of.
"It is only possible to see if a company really believes that failure is important when something goes wrong: do the leaders rally around the person who made the 'clever' mistake and defend them, or do they look for someone to blame?"
Recognise and reward innovators
Recognising employees who have done good work, especially in front of their peers, is important.
He says FNB started hosting a competition to reward the employee who came up with and implemented the most innovative idea over the course of a year. The prize money then was R1 million, and the competition still runs today, although more categories and prizes have been added.
"At first, the prize money seemed like a huge amount of money compared to the revenue gained from the ideas that won. However, over the years, the ideas have gotten better and there has been more drive to win it, so that now the R1 million seems insignificant compared to the billions of rands the winning ideas generate."
Fun, coffee and wine
"Innovation happens in an environment where there is a bit of fun." He says employees need to feel comfortable and not constantly be in serious situations as this does not breed a culture of innovation.
He recommends coffee and wine as social lubricants to help people relax and break-down small talk, which often leads to the best conversations. He says during his time at FNB when there was a big problem that needed solving, he would take his team offsite and share a bottle of wine and try and solve the problem at hand.
He says more often than not this worked, because people were out of the office and relaxed; a state where ideas flow easier.
"Most importantly, remember not to take yourself too seriously."
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