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 providers a very different and expansive perspective, proven processes and toolkits for our mature industry to drive further growth, differentiation and unique community engagement strategies.

For this interview, I had to track down Rowan Gibson to Costa Rica for a chat on Skype. Rowan is a global innovation and strategy consultant, an internationally bestselling author of 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: What specifically can an individual financial advisor do to continue to grow his or her business in a business climate of rapidly accelerating change?

Gibson: If you’re going to substantially grow your business, whatever size it is, you need to innovate. You need to find some compelling ways of creating new value for customers that differentiate you from others, that’s the first thing. The second, is about how do we find new sources of profit before the old sources of profit disappear. How do we change as fast as the world is changing? How do we reinvent strategies and business models before the old ones become obsolete? These are the imperatives.

The way we do that is to take innovation very seriously and approach it systematically. Instead of leaving innovation to chance, we now have systematic tools at our disposal that act like power tools for innovation and enhance our capabilities.

The tool that I use around the world is called the “four lenses of innovation.” This is a tool we developed based on research we did through hundreds of cases of business innovation over the last few decades and by actually going out and talking to the world’s greatest innovators like Steve Jobs, Jeff Bassos, Richard Branson and so on … to try to figure out how the mind of the innovator works. How do you come up with these ideas, the opportunities that add incredible growth to your business model? And how do you come up with ideas to continuously renew things?

We found that innovators came to their discoveries not by sitting there staring out the window waiting for the light bulb to go off above their heads like a “eureka” moment, but actually by looking at the world with a fresh perspective. They were using different lenses than the rest of us, and by using those different lenses, they were able to see opportunities the rest of us couldn’t see. Opportunities that, by definition were in plain sight, that were out there, not because these innovators discovered them, but the rest of us couldn’t see them because we were blind to these things.

Hortz: What are these lenses that let us to see these opportunities?

Gibson: We found that there were four that come up again and again and again in all these innovation phases. The first is called challenging orthodoxies, and that’s about taking conventional wisdom in your industry and just turning it on its head. It was like Commerce Bank several decades ago asking “Why can’t a bank be open more often?” What is particularly interesting is that Vernon Hill, the founder of Commerce Bank, didn’t come out of the banking industry. He came out of Burger King. He brought with him an attitude of challenging orthodoxies and not coming in with any preconceived notions of how you have to do business in the banking industry. And that’s what this is about. It is asking what are the orthodoxies, what are these conventions, those dogmas that deserve to be challenged, deserve to be overturned? That’s the first lens of innovation.

The second lens is called harnessing trends. It’s getting a deep understanding of all the changes that are taking place all around us and then figuring out how we can use the power of those changes to create new value for customers. Things like demographic trends, consumer behavior trends, technology trends, lifestyle trends, environmental trends. I know of one company, for example, that had a very interesting idea around their ATM service where they said we wanted to do something about sustainability, so every time you make a withdrawal from their ATM machine instead of paying the charge of $2 or $3 to take out the money, $1 of that charge is sent off to a particular charity, like Save the World. That’s harnessing the sustainability trend. So it’s looking at all those trends like social trends, economic trends, whatever customers are doing and saying, to create new value and renew our business models?

The third lens of innovation is called leveraging resources in new ways. This is about looking at your core competencies and strategic assets and saying how do we stretch these skills and assets into new ways to create more value for the customer. For example, there is a bank in Korea that wanted to promote mobile banking so they created booths inside of their banks, like 4,000 bank branches, that offered the mobile banking service together with mobile phones from phone manufacturer LG. They took in like 230,000 new subscribers in three months while using their existing branches. It’s really about using your assets or skills in new ways to create new value. They may not even be your resources, your skills and assets. They may be somebody else’s that you use to create value. For example, when they started Virgin money, their own financial services organization, Virgin partnered with a huge bank in the U.K. that did all the back office stuff. Virgin did the front-end consumer services, but the real backend stuff was done by one of the largest banks in the U.K. So sometimes you need creative combinations of assets and skills that again will create new value for customers.

And the forth lens of innovation is called understanding unmet needs. This is really about getting under the skin of the customer and trying to figure out what the customer needs before the customer even know what he needs. For example, nobody in the world was crying out for Google Earth or iTunes or Amazon or FedEx or Skype or Twitter or Facebook or eBay or any of those things. No one was asking for those things, but clearly the need was there, and all those things, we cannot live without them now. We need them every day. So clearly the need was there but how do you discover those needs?

Likewise if you think about the financial services industry, no one was asking Zopa in the U.K. for peer-to-peer lending. Nobody was asking for direct banking like first direct or ING direct or any other direct banking companies. No one was asking for PayPal, and it wasn’t the financial services industry that invented PayPal, it was three guys that basically had nothing to do with the industry that came up with that whole opportunity. One of those guys was Elon Musk, who went on to found Tesla and SpaceX and so on. So it’s about trying to discover those needs and understand the things that people are not necessarily crying out for but they do need.

There was an ad run by IBM about five years ago, I believe, and it was a brilliant ad campaign. They said “Stop selling what you have, start selling what they need.” In fact, there was an ad campaign done for banks which was called “Stop thinking like a bank, start thinking like a customer.” So it’s really thinking from the customer backward and trying to design solutions, from the customer backward.

Hortz: So, you recommend advisors focus their thinking and resources in these four areas to become more innovative, grow their businesses and stay ahead of change?

Gibson: Those are, what we call, the four lenses of innovation and that would be my recommendation to financial advisors -- to systematically generate new insights and opportunities for innovation. Systematically challenge industry orthodoxies and company orthodoxies. Systematically generate new insights around trends and changes in the world and try to figure out how you can use the power of that change to add new value. Systematically generate insights on how you could use your skills and assets to create new value or combine your resources to somebody else’s. And also systematically generate insights around customer needs and how to create solutions from the customer backwards.  That’s my recommendation to anyone, companies of any size in any industry, on how you should approach innovation.

For further information on Rowan Gibson:

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial services firms. We position our members with the necessary ongoing innovation resources and coaching to drive and facilitate their growth, differentiation and unique community engagement strategies. The institute launched with the support and foresight of our founding sponsor partners --Innovation Equity Partners, Pershing, Ultimus Fund Solutions, Fidelity, MeridianIQ/AdviceIQ & Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). Together, we help make innovation happen. For more information or to join, click here.