Making Innovation Pay at U.S. Bank

By Scott Kirsner |  December 13, 2013


  • We’re not focused on trying to reinvent the bank, but we focus on where payments and commerce meet.
  • We were created seven years ago… PayPal and others were emerging on the horizon. Financial institutions were conservative. We recognized that the train was beginning to get away from us, and we needed to do something about it. So we created an innovation group.
  • The line of business leaders at U.S. Bank…are all very busy running really big operations. They have an 18 month technical development cycle, an annual planning cycle, and by definition, they aren’t able to address a new opportunity that comes up that isn’t in plan. We started small, focusing on Horizon 2 and 3 (see this post about the three horizons of growth, and Venturo’s second slide below). Three to five years into the future, where do we think technology and commerce are going, and what do we think we need to do to be there when it gets there, so we can be at the front of the pack? The business units, by definition, were focused on Horizon 1.
  • My team is currently 13 folks. We were three to four people for the first three years, until we began to get some street cred and get some things out the door. [The vice chairman of the payments business, Pamela Joseph, created the innovation team, and Venturo said he has solid support from CEO Richard K. Davis.]
  • Our goal is to be like an R&D lab. Why would a bank ever do R&D? When you look at cards with chips on them, mobile devices, near-field communication, biometric security, [banking is] no longer branches and vaults full of cash. Most of our products are digital, so we have to test and learn, without putting the whole bank at risk. We want to be able to try things, prove them out, develop the business model that supports them.
  • We do an innovation principals meeting, every other month. Each business line executive has appointed one senior-level person to be an innovation principal. They’re [kind of] the cartilage that connects that business unit to the innovation group. That makes sure we’re in line with their strategy, and we understand their business objectives, and it also helps with the information flow between our groups and the business groups. The coolest thing that happens in that meeting is that folks get to share a new problem or idea or thing that they’re working on, and disparate business units will collaborate on the spot to help solve the problem, or agree to set up a follow-up. The frequency of that [bimonthly meeting] is very important.
  • The quarterly executive review happens at my boss’ level. The vice chairman of payments reports to the CEO. [This meeting covers] every single project we’re doing, the status, and the business units’ involvement. You can imagine how engaged the bimonthly meetings are when they know that on a quarterly basis, the business executives of each group are going to be talking about each of those projects, who’s involved, and what has happened. If you know that the executives are going to be meeting and talking about something…communication happens.
  • We do our annual planning with the business line leaders. We have 20-25 active projects at any given point in time, and we map out whether those are merging into [their plan] this year, or is it going to be merging into two years out, or are we going to terminate it? We do that transition planning, so we can get through the commercial launch side.
  • One thing we’ve done is an idea competition for salespeople, [encouraging them] to come up with ideas that help them sell more. If the idea is implemented, they can sell more, they make more money, and we generate more revenue. Salespeople are awesome at being able to articulate what inhibits the sale, which is a great source of ideas. So don’t overlook your sales folks.
  • Everybody that manages people has innovation as a category in their annual performance review. That sounds like a simple thing. It six years to accomplish. Some of this stuff takes time.
  • It’s important to have a way to be able to decommission something [you’ve created.] It’s really hard to kill something — they’re like zombie products. They just sort of wander around, and nobody tells them they’re dead. You have to give something to a customer, and you may have to take it away. Nobody wants to do that.
  • Innovate your innovation process. We’ve changed ours five times in seven years. We’re never going to be done.You need to protect the innovation team. If you let them get too close to the people who enforce policy, they will all run out of the building with their hair on fire.