Posted by & filed under Accelerator, Banking, innovating, Product development.

Collaboration. That’s a buzzword that you can not avoid hearing nowadays. But it’s a buzzword that talks about a real need: collaboration between startups and banks. That’s what is needed in banking, both for the banks’ and startups’ sake, but especially for the sake of the customers. But to be successful, collaboration has to be done right.

We at Nestholma engage banks and startups to collaborate. We have done 20 startup accelerator programs so far with companies such as Nokia, BT, Microsoft, Telecom Italia… During the last couple of years, we’ve been working closely with Nordea bank and have run three accelerator programs with them so far. It has been a great learning experience for them….

…but also for us. Here is what else we and our partners have learned about how to get the results you want from collaborating with startups

 

Have the best startups to work with

You achieve the best results when you have the best startups to work with. Now that is quite obvious. But finding the high-quality startups is a problem. A big problem. And an even bigger problem is attracting them to work with you.  

 

Innovations are global

Most likely the best innovations don’t come from the startups closest to you. And this is for the most local and regional banks a huge issue. How to attract the best startups and their innovations from other places to Helsinki or even to Milan.

 

How to work with startups in practice

Once you have managed to lure a startup or startups to start working with them how to do that in practice. Are your processes, your people, and your company culture ready to work with them?

As one bank executive said, ”it takes only one bank to kill a startup”! Banks and startups are like two different creatures. And almost nothing is easier than for an unprepared bank to smother the startup with its processes and ways of working.

 

Work close enough with the startups

Our customer experience tells that the proximity is one of the key things. You really need to work with the startups, not just take quick peeks at what they are doing. Like taking a look at a lion won’t make you one, just looking at startups won’t help you much. And to get your organization to learn, you need to get as many people as possible involved. That is how you will re-energize your people and get them to learn, to learn how to become agile fast accepting failure and capable of pivoting when needed.

When you have enough people who know how to do that, your whole organization has learned and become agiler, startup like. That is why it is so important to really work together with the startups, get involved and have enough of your people involved.

Those are the things we have learned to be key in working with startups successfully. I don’t claim it is easy, but that’s why we created the Global Fintech Accelerator. To tackle these 3 challenges: to get the best startups, access innovations globally, to work with them but not killing them we have designed Global Fintech Accelerator. It is the perfect solution for preparing for the future.

Startup accelerator program for non-competing banks

 

What is it?

It is a program for non-competing banks. To join forces with other banks, to enjoy benefits of global presence and brand but still to have your own local program for new products. Maximal learning and branding benefits.

 

Access to the most disruptive innovators in the industry, globally. Better and stronger startups.

By combining the brands of the 5 banks we’ll be able to attract far more startups than any one single bank could do. From all over the world. They’ll apply to the locations they want and you decide which startups you want.

 

Learning, sharing the common needs and solving them together 

Banks share many similar or completely same challenges. Thus it makes sense for non-competing banks to collaborate. Trying to reinvent the wheel while others are wrestling the same challenges is a complete waste of time. That is why banks learning from other banks is also a key part of the Global Fintech Accelerator.

 

Share, learn, be more competitive. And help the startups to get better and stronger.

 

There will be 50+ bank approved startups graduating from the program. Capable of solving problems that you might have and what the PSD2 might bring. 10-15 is already a huge number,  but it is only the beginning. You’ll also benefit when the other participating banks make their startups better.

It’s about sharing the learnings in a structured way without any unnecessary hassle. We know what fits for your needs, and how to make it all bump-free.

Global Fintech Accelerator in short:

  • Join forces with the other banks
  • Share the pool of the startups & innovations
  • Learning and sharing from the other banks
  • Test your processes, assumptions, business models in a safe environment to be ready for the PDS2 ERA.

Collaboration with startups has become a must now. But a lot of collaboration, if not even most don’t bring the results banks and corporations want. That’s because collaboration isn’t done right.

That’s why we have worked hard with our partners to find out what exactly causes the hiccups. And we used all the knowledge and experience we have gotten from working with startups and big corporations and facilitating the collaboration of the two. Global Fintech Accelerator is the result of all that. It is what is needed to bring banks to the 21st century.

If you would like to get into the Global Fintech Accelerator or hear more about it, feel free to contact me at [email protected] or +358 40 3433352.

 

Related post: Nordea fintech accelerator successful

 

Posted by & filed under Accelerator, Corporations, innovating, Startups.

We are going through huge changes in technology and in the world in general. The future has never been this unpredictable no matter what industry you are talking about. Now is the last chance for big corporations to ditch their stiff structures and slow ways of working. To become agile and innovative like startups. That’s the recipe for success in the future.

Big organizations have a lot of benefits over startups: brand value, funds, knowledge of the industry and so on. But they are definitely not known for agility, disruptive innovation power and all the other things startups are amazing at. Corporations have already understood that working with startups is great PR and a way to get great innovations – way ahead of their competitors. But most are missing the biggest learning experience they could ever get. Startup accelerators shouldn’t just accelerate the startups, but also the corporation in the program.

We have now done 20 accelerators with big corporations. One of the biggest learnings has been that it is not just the startups evolving during the accelerators. The big corporations have also changed. The more involved the corporations have been, the bigger learnings and changes they have seen. In this post, I will talk about some of the key learnings on how you can transform your organization with startups.

Learning from startups organizational learning

 

1. If you want to achieve a lot, don’t settle for too little

Working with startups can be scary for a big corporation. Startups often seem like a completely different species. The way they act, their speed, even the way they speak are just so different. It is a completely new kind of world to operate in. A scary world. And at the same time the corporations are worried about the returns: will it really be worth the effort.

That is why many choose to go for a smaller event like hackathons. And sometimes that can be a great first step. But the expectations should also be appropriately small. That is because no matter how great the startups and teams in the hackathons are, they still only have a couple of days to do miracles. Or some corporations try to get the benefits by working with just one or two startups. But the thing is, you need to be lucky to get the right ones for you.

Those kinds of things can be a great way to get a peek into the startup way of working. But for organizational learning and real change, they are usually not enough. That’s why there are accelerators.

Accelerators are still relatively short in corporate terms (the program itself about 3 months of so), but for startups that is a long long time. They can do real miracles in weeks if not even days. And a couple of months means many many miracles. During the length of the accelerator program, the startups will also get to know you and your challenges so much better. That means they will create ready solutions that are pretty much tailor made for you. Of course, this means that you have to give them the possibility to learn about you; you really need to work with them. But that is also how you will transform your own organization.

2. To learn, you need to do

Your organization is your people, your employees. No matter how great your products or business in general are, they are nothing without the effort of your employees. They often say it’s not the great idea, but the execution that matters. And execution is on your employees’ shoulders. And that is why to transform your organization you need to transform them first. That’s the beginning of changing your whole organization, from inside out.

For your employees to learn and change, you need to get them doing. A lot of organizations send people to seminars and hire consultants. Those have their purposes, but the best way to learn is never to just sit and listen passively. You need to be doing. And when you learn by doing, you have already started making those changes. That’s why you need to get your people as involved in the accelerator as possible. To work together with the startups.

And when I say working together and I really mean working together. Many organizations just have the accelerator’s startups in a corner of the office and encourage their employees to go look at them. But again, like taking a look at a lion won’t make you into one, just looking at startups won’t do much. In practice, that means you should have your employees act as the startups’ mentors & business champions. That’s the way to get them learning. For best results, choose an accelerator that helps with that. Like I said earlier, the worlds of startups and corporations are different, and often a bit of help for joining those two is very much welcome.

3. Help the startups, help yourself

When your employees work with the startups they see first hand how startups work. How completely redoing something takes days instead of months. How they turn their business completely around, pivot when they realize what they are doing isn’t working. And so on, and so forth. When your employees help the startups, they will start to see a different way of doing. They will also see what is wrong with their own organizations, and even more important: how things should be. And as they have startups relying on them to help, they make those changes happen. Instead of thinking about and following all the usual procedures, they just do it. Take the shortcut and break the infamous silos.

In other words: while helping the startups the employees are in fact helping their own organization. They are learning and fixing it inside out. And that is much more efficient than getting an outsider to force their models on you.

For those little changes to become a real transformation, you need enough people to do it. One fish can’t change the waters, but a flock will. You need to have enough of your employees working with the startups. And you have to have your whole organization involved.

4. Make learning (and the accelerator) your organization’s top priority

When the changes in your organization happen you should let everyone know about them. You should use your own success cases as inspiration for the rest of the organization. And in general, you should make sure your people are aware of what is going on. That you have startups on board and you are transforming your whole organization. Not only is it good internal PR, but it also makes it easier to make those changes happen. What you make a priority in your organization is much more likely to happen.

5. The right amount of startups

You need to have enough of your own people involved, but you also need to have just the right amount of startups. Too few, and it is difficult to involve enough of your employees for real change. Too many and you will have too many changes needed to be able to actually execute them.

In our experience about 10-15 startups hits just the spot. Just enough to have a real impact, but not too many to overwhelm you. It is also a good amount from the innovation perspective.

6. Learn to fail

The right way to fail might even be the most important thing you can learn from startups.

First of all, the word failing is wrong. Or at least how we understand it. To most failing means the end, losing. But it really is a beginning: you did something and you learned. And the next time you do something you will be much better at it. That’s why startups have FailDay, and have this whole ”culture of failing”. Some even celebrate each failure AND the learnings from them. And that is what big corporations need. Many even say it is impossible to innovate if you don’t know how to fail. And to be the top player in the future, your organization can’t just rely on innovations coming from outside (or even worse: doing the same thing you have been doing since the beginning of time). You yourself need to have the capabilities of acting fast.

So, learn to fail. If you don’t master the art of failing safely, that’s when you will really fail. And even more importantly: you need to learn to fail fast. In a way, startups are constantly on the lookout for failures, things that don’t work. They learn from them, and pivot, change directions and try again. And they do it super fast, over and over again. When you do it fast enough, it really isn’t failing. Just learning and adjusting accordingly. And as it is done quickly, just the minimal amount of money or effort has been wasted. The faster you fail the faster you learn and start doing the right things.

 

In short:

  1. If you want big changes, you can’t settle for little. The effort you put in and your results are directly related to each other.
  2. Your employees are the key to learning and corporate changes. The change starts from them.
  3. Get involved. Don’t just look, but work together with the startups. By helping them you are actually helping yourself.
  4. Make the accelerator, organizational learning and changes a priority. That helps make the changes happen and make them stick.
  5. Work with the right amount of startups. Enough to have an effect, but not too many to paralyze yourself.
  6. Learn to fail fast.

And there you have it: 6 ways to transform your organization with startups.  Remember: when the stiffest of them all, banks, have transformed, so can you.

 

Start renewing your business today

Let’s talk how Nestholma can help to renew your entire company and find new businesses with startups and beyond.

I want to hear more

 

You might also be interested in: Why are big corporations so bad at innovating?

 

Posted by & filed under Banking, Fintech.

Over the past two months, I have been discussing with almost 50 banks from all over the world: from Asia to North America and everything between. By doing it I believe I have gotten a good look into what is going on in the heads of major banks; what do they think about the future and especially the rise of fintech startups.

First, you can forget the image of banks as dusty corporations that fail to admit the world around them has changed. They are very much aware of it and working hard to keep themselves relevant in the eyes of their customers. It has been truly striking to see how smart the people in banks are. They have such a vast experience of banking they know it like their own pockets. But not only that: many have come outside the banking world. And all that shows. The banks know both the worlds inside and outside the banking bubble. At least the banks with whom I have been talking.

Great advances in technology & changes in regulations make predicting the future difficult

Regardless of where the banks were located, blockchain, artificial intelligence, robotics, and the PSD2/open APIs came up over and over again in our discussions. It is clear these are the things that are going to have a great impact on the future of banking, but how – that is what banks are just starting to grasp. It is no easy task: before you could predict the future by looking at the past, but that doesn’t work anymore. Things like technology are developing at an exponential rate, and it is close to impossible to imagine what banking or even the world in general will look like in 10 (or even in 5) years. All that makes developing the banking industry a challenge. But it is not a challenge only for banks: investors and startups are all facing the same issues. And that is something banks have also noticed.

startups banks and banks collaborating

From competitors to collaborators

Another common nominator in our discussions was that the banks are not thinking about fintechs (or even other banks!) as the enemy anymore. They recognize the industry is under such big disruptions that they have to work together to stay relevant. Both banks and startups have their advantages, things they do and know better than the other. Using those together is going to bring much better results than them trying to just figure it all out on their own. Banks also understand that startups can bring them the kind of innovations they would never be able to create by themselves. Startups are free of many of the innovation limitations banks have, and cooperating with them is definitely a good idea.

Banks & startups both have their own advantages, thus working together is definitely a good idea. Tweet about it!

One rising trend is collaborating with other banks. Before working with your competitor was almost unheard of. But now banks are looking to join hands with other banks and tackle the challenges of future together. It is a smart move as a lot of the challenges they are facing are the same. They want to work with other banks in different environments, development phases and so on to get a more complete picture. For example, banks in cashless societies have very different experiences than banks in cash-strong environments. By combining all that knowledge, banks are much more equipped to stay relevant to their customers in the rapidly changing environment.

By working together banks are much more equipped to face the challenges of their rapidly changing industry. Tweet about it!

Another point supporting collaboration is scaling up the new innovations banks create. Even if one bank created the greatest innovation since the beginning of banking, it is hard for it to become a success, if it is not widely used. When banks work together it is much easier to scale that innovation. Of course, the innovation itself is also likely to be better when done via collaboration.

Overall, there is a strong momentum to reinvent the traditional way of banking. Banks are not only changing because they are forced to; they want to lead the change. That momentum is going to bring great possibilities for everyone, especially the ones that are in it together.

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Posted by & filed under Corporations, innovating.

Big corporations are clusters of amazingly smart people. They have resources, vast experience and deep knowledge of the industry. Be it banking, technology or pretty much any industry, the corporations are the rulers of the industry. At least till now.

Now startups with their amazing innovation power are taking over. Consumers are demanding better and better solutions, and big corporations can either learn how to really innovate again, collaborate with the startups or be left in the dust. To understand how you must first understand why. In this post, I am going to explain why exactly corporations are so bad at innovating.

Working together, but not really together

Big organizations do have plenty of smart people working together, but the problem is that they are not really working together. With big organizational size comes the need for structure, units, departments and all kinds of sections. There are departments for marketing, sales, legal and so on. The problem with it is that the employees don’t venture much outside their departments. They work with the same people all the time, and often with similar people. Marketing people with marketing people, sales with sales and so on.

To innovate, you need to have people with different knowledge bases and experiences working together, cross organizational boundaries. Even if people from different departments happen to work together, it is often just for a short time and for a specific mission. Innovations usually require time to just freely bounce around ideas. But with a focus on efficiency and the mission and hand, that is often just not possible.

To innovate different kinds of people have to work together. But in corporations that rarely really happens.  Tweet about it!

Quartile focus & the quest for efficiency

Corporations focus on making the next quartile better than the last. Innovations, on the other hand, require time. And that is exactly what such short-time focus does not provide. At the same time corporations look for efficiency. The same (or even more!) tasks are expected to be done with fewer and fewer employees. That leaves the employees no extra time for free thinking; creating new & innovative ideas. And even if they could squeeze in a bit of innovative thinking, why would they? Their performance score is based on how well they handle the tasks in their job descriptions, and that’s it! Such systems punish for trying to be innovative; ‘wasting time’. Even if the employees are told to innovate, fresh ideas rarely come on command.

Innovations require time. When you just focus on making the next quartile better, there isn’t enough of it. Tweet about it!

short-term focus quartile

Knowing their field too well

Another problem big corporations have is that they are the masters of their field. It obviously has a lot of benefits, but at the same time, they know their field too well. When you are so deeply inside, it is difficult to see possibilities for change. And often times the innovations that do come from within are fairly small. That is why big innovations come from the outside, from people who have a much less clouded view.

Resistance to change

Some corporations get cocky. They don’t realize that what has worked for the past 20 years, might not work at all now. They fail to recognize that with time also their customers, market etc. change and they need to change with them, preferably even lead the change.

Sometimes the organizations understand in principle that to stay on top of the game, they need to innovate and essentially: change. But to truly do that, you need to have the whole organization in it. But instead many big changes are faced with attitudes like: ”We have never done it this way” or ”We already tried this 30 years ago”. When you have lived too long in the same bubble it can be hard to recognize how much e.g. technology has changed over time. What was impossible before is often very much possible now.

You need to realize that what has worked for 20 years, might not work at all now. Stay current. Tweet about it!

Failing to fail enough

Being innovative requires tolerating failure. Like Ilkka Paananen from Supercell has said: most of their games fail, but they keep doing that to find the game that’s going to be on top. For big corporations, failure can seem daunting. Unlike the failures of smaller companies that often go unnoticed, everything big corporations do is scrutinized. They have a reputation to keep and they need to be careful of bad press and its influence on their brand, stocks and so on. But failures are a crucial part of being innovative.

Being innovative requires failures and the courage to fail. Tweet about it!

Failure failing success

Innovations don’t always seem so attractive

There are also negative sides to innovations, which can make them seem unattractive to corporations and especially their employees. New innovations often mean things can be done more efficiently and with lesser costs. And that often means the corporations have an excess of employees. They need to downsize, let go of people, and that is what no one wants to do. It is horrible for the employees; both for the ones leaving and staying, and very bad for the company’s public image.

Another obstacle is all the legacy systems big organizations usually have. Over the years corporations have invested a great sum of money into IT, machines and real-estate among many other things, and letting go of them often feels like just too big of a waste.

When you look at all these issues, getting corporations to innovate may seem like an impossible task. But it doesn’t have to be. There is definitely hope, but organizations need to take action now. What can they do then? One solution is (surprise surprise) to learn from the innovation masters: startups. In a future post, we will talk more about the different ways big corporations can innovate.

 

Start renewing your business today

Let’s talk how Nestholma can help to renew your entire company and find new businesses with startups and beyond.

I want to hear more

 

Related post: 7 differences between startups and corporations