One of the most inspiring books that I have read over the past few months is The Innovation Stack written by Jim McKelvey who is the cofounder of Square. Jim and his business partner, Jack Dorsey set out to solve an interesting problem which was how to provide small merchants with an easy, secure, and cost-effective way to take credit card payments from customers. Their journey through the initial visioning and business planning processes, defining the technology, confronting competition, addressing regulatory complexities, and growth challenges is an epic tale.
Jim also takes us through the journey of Bank of Italy, which is now known as Bank of America, IKEA, and Southwest Airlines. All four companies embarked on a journey to solve a problem which led them to solutions which in turn presented even greater and more unique challenges.
We at Red Rock Strategic Partners highly recommend the book for all advisors and leaders in the financial services industry. The rich lessons in the book are crucial to the success of the financial services industry as a whole and to the continued success of your practice. The author reminds us that each business is unique as a result of what he calls the “problem-solution-problem chain”. Your company has embarked on its own unique journey to confront problems and find solutions each day as the business environment evolves and changes. As McKelvey so clearly describes, “you succeed in solving all the problems with a collection of both interlocking and independent innovation. That successful collection is what I call an Innovation Stack”.
Although our industry provides many of the same products and services to the marketplace, how we address the delivery of those products and services in an ever-changing investor landscape is the true uniqueness of each practice and firm. How we change our processes, learn new competencies and skills, change marketing to create a clearer message, inform our client base of market or economic changes defines our unique innovation stack. As we grow our practice or business and make critical human capital decisions, technology investments and platform modifications, we build our unique innovation stack.
The real questions we need to consider is are we using our unique innovation stack to differentiate our firm or practice from the competition? Are we helping our clients and prospective clients understand the journey that we go through to move effectively serve their financial needs and goals? Here are a few additional questions for you and your firm or team to consider:
What changes do we make to our practice or business that allows us to more effectively serve our clients and compete for new client relationships?
As a team or a firm, what problems do we solve that have a positive impact on our clients and our growth trajectory?
Do communicate the changes and the desired outcomes to our clients in a manner that sticks?
How will we most effectively describe our Innovation Stack to our existing clients and our prospects?
Finally, McKelvey shares the following, “Necessity mothers invention. You don’t plan to innovate, you don’t want to innovate, you don’t aspire to innovate, you have to innovate. It begins by putting yourself in a situation where innovation is the only alternative”. He is absolutely correct. Our industry demands real, unique innovation to grow and meet the critical needs of our clients and its our duty and responsibility to take that step and build our own Innovation Stack.