In this first in a series of interviews, the Institute for Innovation Development will be inviting top innovation specialists from around the world to talk to our readers about global, cross-industry innovation activities and how to apply these innovation best practices to advisor businesses. Note that “innovation specialists” are essentially business growth experts not confined by industry or geography. They can share with financial services leaders a very different and expansive perspective, proven processes and tool kits for our mature industry to drive further growth, differentiation and unique community engagement strategies.

For this interview, I had to track down Rowan Gibson, who is in Costa Rica, for a chat on Skype. Rowan is a global innovation and strategy consultant, author of the international best-sellers Innovation to the Core and Rethinking the Future, and a top keynote speaker and executive educator with engagements in 51 countries over the past four years.

Hortz: Rowan, based on your global perspective and practical experience of helping businesses of all sizes grow across many industries, what is your perspective on the financial services industry?

Gibson: There is too much focus on efficiency and not enough on innovation processes. Whether it’s lean management, six sigma, efficiency, downsizing, cost cutting, mergers and acquisitions, these things don’t really deliver growth on the long term. In fact, a lot of them destroy growth. So the only way we're going to get wealth creation and growth for the longer term is through innovations. It doesn’t come from anywhere else. If you stop innovating, you essentially stop growing.

Hortz: Can you expand a little bit more on what are the biggest risks you see for the financial services industry?

Gibson: I think a huge risk in the industry is that financial services today as an industry is incredibly blurred, meaning that it used to be clear where that industry begins and ends. If you wanted a bank account, you’d go to a bank, but today if I want a checking account, I can go get it at Starbucks, from Walmart, from GM. If you go to the U.K., one of the largest financial services providers in the U.K. is a supermarket called Tesco. So in that kind of world where everything is blurred, what exactly is financial services? I have a client in Kenya called Safaricom. It’s a part of the Vodafone organization and is a mobile phone operator. Just a few years ago, they invented a thing called M-Pesa, “M” standing for mobile and "pesa" standing for currency, so mobile currency, and it’s not a bank. What they did was create an innovative service where you could make money transfers just using a mobile phone. So there are people right now across Kenya that never had a bank account, still don’t have a bank account, but do all of their financial services using their phone. So what’s happening to Safaricom is they are now morphing into a financial service company rather than a mobile phone company. They now offer something called "M-Shwari," which is credit and other financial services via their mobile phone operations.

And then beyond that, we’ve got another incredible development. Think about digital financial services. We’ve got guys like Google and Facebook who are beginning to offer financial services. Google already offers an e-wallet service, but they also got their own kind of PayPal service called Google Checkout. So think about Google moving into more extensive financial services and imagine someone like Facebook creating a peer-to-peer banking. People are saying, who needs a bank? I can lend money to someone who’s in the Western world or a developing world, and its peer-to-peer lending. But imagine Facebook, with a billion users, suddenly starts to open its own banking and financial services, and even if 10% of their users decided to take advantage of that service, that’s 100 million customers from day one. These are examples that have the potential to reshape the financial services industry.

Hortz: How do financial advisors deal with and position themselves against these types of threats?

Gibson: I know it’s a cliché to say we live in a world of change, but it’s nevertheless true, and none of us have even begun to come to terms with how to deal with this kind of exponential rate of change we have around us. We're in a world of hyper-accelerated rate of change. So you need to find a way to keep moving up the value added ladder.

In this kind of world, the largest unexpected downside is that business models don’t last as long as they used to, they get broken much more quickly. So if we look across industries, whether it’s the music industry, the movie industry, the advertising industry, the television industry, the financial services industry … we have industries where the business models are up for grabs. They are changing right before our very eyes, and that’s the reason why we have to put so much more energy not just into growing the size of the business, by 6% or 8% or 15% or whatever year to year, but also on how quickly can we renew and regenerate our business model in this changing world. We have to ask ourselves: Are we changing? Is our company changing as fast as the world is changing?

Hortz: How do you encourage advisors -- small to midsized business owners who feel they do not have the time, money or effort for innovation -- to make that jump to be more innovative?

Gibson: It is important to note that some of the best examples from financial services around the world are not from huge, huge, huge companies. For example, there is a tiny little bank in Denmark called Jyske Bank, and they were facing a lot of competition from international players, so there’s hyper-competition. So what do they do? They totally reinvented their retail branches to be really consumer friendly, wonderful places to go, hang out and have coffee. They promote all their products and service by having intriguing displays where, if you’re going to buy a mortgage, they had all these paper bricks on display and you go up and open a brick and inside was all the information about the mortgage and so on. So they were fun and very consumer friendly. That’s an example of a smallish bank saying we need to do something radically different. Why don’t we change the inside of our banks to be really appealing and different?

Other examples, there’s a bank in Oregon called Umpqua Bank. It’s a local Oregon player and they decided that instead of trying to be like all the international banks, they were going to be the bank of Oregon. They do wonderful things. They celebrate local community merchants so there may be a local photographer displayed in the bank branch, next month there might be a local tea manufacturer and they have all of their tea displayed there. They’ve even invited local rock bands to play to people while they’re doing their banking. I’ve never heard of or seen that before, a bank that has rock bands playing in the bank. If you think about it, how difficult is that to organize? It’s a local rock bank, a young teenage band or whatever, but it’s about celebrating the local champions and that’s their way of challenging orthodoxies. Why does a small organization have to be traditional or behave like other firms in their industry?

These I think are exciting ways of doing things differently that don’t necessarily have to come from a huge firm. It could be anyone in financial services that can do things differently. It doesn’t really matter how big or small you are. It’s the principle of are you using what’s available to you in terms of innovation tools and ways of thinking to revolutionize the way you do business and add value.

Hortz: To be more innovative, it is always recommended that you are observant and know what’s going on in other industries so you can use cross-industry pollination for ideas. Are there any industries of particular merit that financial advisors keep an eye on for ideas or situations that would seed and develop some new thinking?