Leaders at big financial firms know that they need a process for continually “disrupting themselves,” but it’s hard to pick suitable experiments to focus on. The former CIO of Credit Suisse explains why her go-to criteria for choosing an experiment worth pursuing is whether it’s risky, creative, and scalable.
During her five years at Credit Suisse, Radhika Venkatraman built a “well-oiled machine” for scaling innovation across the investment bank, she told Insights Distilled. She built out an innovation pipeline that included a “Shark Tank”-esque experience for selecting projects, and, through that, honed her process for filtering winning technology ideas. Ultimately, she recommends asking three key questions when evaluating a potential innovation experiment:
First, what’s the probability of success versus failure? It would be best if you found an idea that has the right amount of risk. “If the idea is going to succeed, you should just be funding it,” she said. Those types of ideas should flow through the typical business process versus the innovation pipeline. “And if it has absolutely no chance of success and scaling, then why bother?”
Next, you should ask whether an idea is focused on incremental efficiency gains or something more ambitious. “When you’re creating small amounts of efficiency through your experiments, I’m not interested in that,” she told us. “I always tell people to go for a new market opportunity or a new pool of revenue, something that indulges and engages your creativity.”
Finally, leaders need to ask: What’s the scale of this experiment if it succeeds? “If your experiment is outlandishly successful, but your output is tantamount to giving birth to a mouse, that’s not an experiment you want to spend your precious money on,” she said.
During her time at Credit Suisse, Venkatraman’s innovation pipeline received over 400 ideas and funded about 18 different experiments. Ultimately, 10 went to production and three became new business ideas – including a so-called “Netflix for bonds” project, a recommendation engine for bond traders.