Editor’s note: In this series, we share personal innovation stories from a new book by Luis Solis; Innovation Alchemists: what every CEO needs to know to hire the right Chief Innovation Officer
Drive innovation in your organization through the 3P Innovation Compass — purpose, process and people – as NYSE Euronext did after the 2008 financial crisis
I hated learning Latin. When I was in seventh grade memorizing Virgil’s poems with my Viennese classmates, I had no idea the phrase novus ordo seclorium is on the back of every dollar bill. I had no idea I would one day move to the United States and build a family, no idea I would have to renew my own self to adapt to America, and most certainly no idea that I would have the privilege of walking through the golden doors of the New York Stock Exchange every day for eight years working in the vortex of change.
The verb innovare, I learned in my Latin classes, means to renew. For me, moving to the U.S. meant relearning basic business principles in an e-economy that was invincible, and a stock market that knew only one way: up. When the bubble burst and the horrific events of 9-11 sent markets into a tailspin shortly after my arrival, the American dynamism I was just learning was replaced with anxiety. It was at this time that an entire new breed of exchanges was in the making. Exchanges were being transformed with technology as their catalyst.
Even through the 2008 financial crisis, exchanges continued to fare well as heightened volatility drove volumes. Sophisticated program trading strategies and high frequency trading kept business humming across all asset classes. However, what goes up does come down, and so it happened. Stratospheric valuations plummeted and cross-border deals thought viable through the link-up of NYSE Euronext (NYSE) or NASDAQ OMX suddenly became impossible as many countries and governments had to deal with their own financial challenges. Sometimes, no amount of innovation can keep valuations up and stop markets from plummeting as the overall economic sentiment and reality just takes over.
How can you anchor and drive innovation in a crashing environment? The answer is you can’t. What you can do is to establish a framework that helps your company snap back faster than its competition.
3P Innovation Compass
My training as a consultant at Bain & Company had equipped me with the required drive for analytical rigor and the necessary pragmatism to establish our innovation program at NYSE Euronext. Purpose, Process, and People became the basic components of my “3P Innovation Compass.”
Purpose: I ask myself so many times why I moved to America. I could have been equally or more successful with my established networks back in Europe. I always end up with the same answer: it was about pushing my boundaries. It was about learning, breaking with the old ways of doing things, stepping out of my comfort zone, and risking being ridiculed, sometimes for having Arnold Schwarzenegger’s accent, but not his body.
I believe as long as you keep a focus on the “Why,” you will snap back faster from any defeat. This is the same with innovation in organizations. The ones who risk and learn will always prevail over the protectors of the past. NYSE Euronext aspires to lead the evolution of the exchange industry and redefine what it means to be an exchange. Its purpose is “to empower the world’s capital markets community to innovate and collaborate.”
Process: It was clear to me that what comes naturally in smaller companies needed some process support at NYSE. A heavily-regulated industry like the exchange industry does not allow for disruptive innovation; it rather calls for dynamic evolutionary innovation. At NYSE, we started with a pilot and experimented with small “innovation jams” until we were ready for a companywide event. Although as senior management we believed that we had created a culture that fosters new ideas and out-of-the box thinking, it was still amazing to see how much our employees appreciated finally having a process to collaborate across organizational boundaries.
Technology became our innovation engine. We established goals and incentives, introduced a tight review and funding process, and provided strong support from the corporate center with resources and training. At the same time, we established NYSE Euronext behaviors, of which “Innovate with Purpose” has become the anchor.
People: As in my personal life, success is all about surrounding yourself with the right people, especially courageous people. America has been built around the “can do” attitude. There are no obstacle’s that can’t be overcome. No centuries of history and legacy are holding Americans back. It is all about tomorrow and never about yesterday. Our CEO saw Innovation as a catalyst for change, and his constant support was crucial for anchoring innovative behavior into our new corporate culture. His decision to move from the core trading business into more adjacent businesses such as Technology Services has to be seen as courageous at a time when the economy was rapidly deteriorating because of the financial crisis. With only 3,000 employees worldwide, there was no need for a heavy innovation infrastructure.
Combining my Germanic structured tendencies with an American trial-and-error approach, we set up a typical Innovation Office, including our CIO, HR representatives, and the Innovation Team, which was a quasi-virtual innovation function at company headquarters to facilitate the ramp up.
We launched the Innovation Champions concept in the next leadership layer in the organization. The Champions became the real ambassadors of the Innovation Agenda.
They were much closer to the business frontlines, brought a strong customer perspective to the table, and became amplifiers of the NYSE Innovation Agenda. This bifurcated organization approach allowed for more central direction when needed and more market sensing on a day-to-day basis when quick (re)action to competitor moves was required. We built reciprocal trust as we had associates challenge the status-quo, and celebrated failure as long as it was a result of challenging the status quo and within the boundaries we set. It was all about having the right people working collaboratively in moving NYSE Euronext into this new strategic direction.
Innovating with Purpose in a Dynamic Environment
Looking back, I have to say that with the cards we have been dealt, we can be proud of what we have achieved on the innovation front at NYSE Euronext. Did we make mistakes? Yes we did, many of them. Nevertheless, the “Innovate with Purpose” behavior and program have become one of the pillars of our corporate culture. Adaptability and speed to innovation — be it innovation architecture or idea funding and implementation — have become the underlying drivers in the exchange industry and especially at NYSE Euronext. We believed that creating an environment that fosters and promotes innovation is more adaptable to our dynamic industry environment than anointing a few corporate brains to come up with the next big thing.
I’m still not a fan of Latin. But the verb innovare doesn’t fill me with anxiety anymore.
image credit: blogwsj.com
Dieter Eisinger is Senior Vice President | Chief of Staff |CAO |CPO at NYSE Euronext. Dieter’s LinkedIn profile is here.
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