Ken Moore is responsible for building what he calls the “growth operating systems” at Mastercard, identifying and pursuing opportunities beyond the company’s core payment processing business.
“Payments is a huge part of our business, and a celebrated part of our history,” Moore says, but the company has been looking beyond that “into a broader set of clients, a broader set of problems and opportunities that we can deliver against.”
As part of our recently released research report, Benchmarking Innovation Impact 2023, we interviewed Moore, Chief Innovation Officer of Mastercard, the financial services, technology, and payments giant. Moore shared his advice on mitigating the challenge of turf wars and inflighting — which emerged from this year’s benchmarking survey as a major hurdle — and discussed the various ways his organization measures innovation succcess.
Mastercard is headquartered in Purchase, New York, but Moore primarily works from Dublin. The company reported $22 billion in revenue in 2022. Highlights from our January interview are below.
My role. I’m on the management committee for Mastercard, and maybe that shows you the importance of innovation on our particular journey. Structurally, I sit under Craig Vosburg, who is our Chief Product Officer.
My role in Mastercard is really about four key things. One, it’s to build what we call our growth operating systems. It sounds fluffy; it really isn’t. We have a thing called guilds, which is a kind of a job family. So everyone belongs to a job family — in engineering, in design, in product, and other things. I’ve got a role around building our growth operating systems, so the skills of our people through the guilds. …Making sure that our people have the right tools, to make sure they’re customer centric, that our company is working in an agile and nimble way. …My second role in the company is around informing our strategy. Clearly there are lots of inputs to strategy. One is what does technology make possible tomorrow that wasn’t possible yesterday? We’re always looking at a landscape of maybe 20-odd emerging technologies, maybe out to about a six or seven year time horizon. And then secondly, anticipating changes in end customer behavior.
What does technology make possible tomorrow that wasn’t possible yesterday?
For instance, a couple of years ago, we saw the rise in “cause-driven” consumerism, which led us into ESG, and carbon calculators, and some of those initiatives that really tapped into a consumer that was becoming increasingly driven by [caring] about the planet, or they cared about working with brands that they could identify with. My third role is about derisking new products and services. My team is a service to the rest of Mastercard. We’re not a revenue-generating unit, although we’re highly commercially-focused. We’re not a cost center. Instead, we are a service center. We derisk the introduction of new products and services, in partnership with the product groups. We get an idea from somewhere, we work it through a structured process to make sure we develop it in a customer centric and agile way, we make it real…and we transition it into the product groups, who scale it globally. That creates a very strong foundation for partnership. We’re not fighting against each other. This is one of the challenges that can exist in other organizations. Because we’ve got the vision at the top of the house defining why we need to be innovative, and because we are not competing for revenue with the product groups, we are structured as a service, it creates the conditions for partnership.
My last role in the organization…is about differentiating us in the eyes of our customers. That’s through thought leadership. It’s through our network of physical client experience centers, so that our clients see us and feel us as this broader company that we are today. These are physical spaces that host about 8000 clients every single year.
We’ve got the vision at the top of the house defining why we need to be innovative, and because we are not competing for revenue with the product groups…it creates the conditions for partnership.
Our innovation agenda. Our innovation agenda is not just about tomorrow; it’s also about evolving our products and services today, fixing the challenges that are there…evolving them, making sure that they continue to be best-of-breed products… So we’ve invested heavily in customer experience, design, customer research, customer analysis, and we’ve embedded that through the full lifecycle through which we build a product and service.
Advice for mitigating turf wars and infighting. There’s no easy answer for this, but there are pieces of the puzzle which make it easier. One is “setting out the stall” [in other words, making the pitch] for why innovation matters in the company overall. For us, that’s back to mission, purpose, and values — right from the top of the house, defining a mission statement that forces you, as a company, to want to be more tomorrow than you were yesterday.
I think the second piece is that innovation needs to be embedded in your culture, and it can’t just be in a soft way. I think you have to measure it at some level, because what you don’t measure, you don’t care about. [At Mastercard], we specifically call out things like customer-centricity, partnerships, working together, helping each other be great. There’s a lot more to it than that, but those are some of the tenets that we specifically call out. And that’s what we expect of our people — we measure them against that; it’s part of their job descriptions; it’s part of their performance assessments on a yearly basis.
Innovation needs to be embedded in your culture, and it can’t just be in a soft way. I think you have to measure it at some level, because what you don’t measure, you don’t care about.
The third [key piece] is how do you [structure your organization]? For us, we don’t try to take revenues from other groups — we are a service to the company. We are there to be used. We are a safe place for failure… We’ve created the right conditions in the structure of our R&D organization to allow for partnership, because we are a service provider versus a cost center or revenue center.
How we measure success. [We look at the] future potential of products and services — almost a risk-weighted basis, commercial potential, or scale potential. The second way we measure is, we clearly have focus areas in the company aligned to portfolios, which is a collection of related new products and services designed to achieve a particular objective. …That unifies us with the product groups, because we tend to have the same forward-looking objectives in those spaces. We we report back against that as well.
Innovation itself is a team sport. It’s not just in my organization. …If you think about helping us be a more innovative company, we measure that on agility, speed, how quickly are we making decisions on products and services? How well do our products and services scale? How quickly are we getting products out the door? Are we failing smart? Are we failing fast? How much time and capacity are we getting out of our engineers? How much of their time is wasted? How much instead is actually on value-generative activity?
And then on the strategic insights, how many insights are we generating every year? What have they informed? Have we identified new potential product opportunities because of our strategic foresight work? Have we changed the direction of a product because of something we learned as we were designing it that changes the direction, how we build it, how we conceive it, what API’s we provide to our customers.
[And then,] is our message breaking through to customers? Are they perceiving us as being differentiated in the marketplace? We have a “voice of customer” survey every single year, where we ask customers, both how we’re performing today, but also how we’re anticipating and helping them position against tomorrow. We get that feedback globally from them every single year. Last year, we had our highest ever results on that on both sides — how they perceive us today, but also how are we positioning for tomorrow.
Investing in Horizon 1, 2, and 3 projects. On horizon one, you’re probably talking about enhancements around existing products and services. For us, that’s hugely important. We invest heavily there — we have research teams, we have experience design teams, we have engineering and product teams that are constantly evolving, enhancing, etc. Horizon two, for a services business, [is] probably three [years out] for us. We’re already building product and service concepts against that. We’re testing those with the market, we’re testing them with customers. We probably have partnerships to help us do that, like the ones that we have in quantum with IBM and D-Wave, or the ones we have in 5G with Verizon, or the ones we have with Microsoft in cloud.
…Then as you enter horizon three, for us, this a little bit lighter touch, and we use thought leadership, we use lower fidelity prototypes — we call it “play with a purpose” — against that horizon. These are things that may happen; they’re five-plus years out, but some of them could be really, really important. We will build sandboxes. We’ll invite partners in. We’ll publish thought leadership. We will be open to being wrong. And we will evolve as we monitor something that’s maybe six or seven years out. As it starts to move closer, we’ll constantly iterate and reassess. Are we thinking about it in the right way? Does the technology do what it says it will do on the tin? So “play with a purpose” is the way that we kind of approach that space. So for us, all three are important…
We fail a very, very significant number [of times] every single year. We are designed to tolerate that failure, perhaps in a way that a product group isn’t.
Failing fast and failing smart. We celebrate [failure]. We publish that as part of our role. [My team] has a specific role around de-risking the introduction of new products and services. When I say de-risking, risk comes in three ways: it can be client-market fit; it can be solution uncertainty; or it can be commercial uncertainty. We will keep a new product or service within my organization, Foundry, until we’ve taken risk out of each of those three categories. We will fail a huge percentage of initiatives. It varies, depending on whether you’re adjacent or disruptive — but we fail a very, very significant number [of times] every single year. We are designed to tolerate that failure, perhaps in a way that a product group isn’t. They have to place safer bets, so we’re deliberately a partner to them, to help them take those bets may pay off.
Technologies coming down the pipeline. I think the big [technologies] that come to my mind are part of the broader set of mixed-reality technologies. From augmented through to virtual, with augmented being a little bit more real, short-medium term, and more immersive technologies being more medium-longer term.
I think that physical-digital convergence is going to continue to be thematically important over the next couple of years. I don’t think crypto or Web3 are dead. I think it’s a bit of a winter at the moment… so we’ll continue to be very active in that space, but in a thoughtful and measured way. Cloud, IoT, 5G are very much [in] now. Beyond that, I think quantum — particularly on the annealing side — [will be] important… As you look beyond that, I think privacy-enhancing technologies and zero-trust-based architectures probably round out the picture.