IBM and HSBC, promoting innovation by collaborating like a start-up

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When I first heard about IBM Client Engineering, a team focused on driving innovation by “co-creating” with customers, I questioned how it would work in practice: investing in “co-creation” could be expensive and the complexity of our corporate customers would challenge our ability to run fast experiments. However, the opportunity to work with a multidisciplinary team, using design thinking and lean start-up practices to explore innovative ideas, was just too good to pass. I was in!

A few months later I met Tolga, the of Head of Innovation for HSBC Europe, and was surprised to hear how his organisation was embracing the same practices that my team was promoting. We started a collaboration that, with ups and downs and twists and turns along the way, has taken us to explore unexpected territories, from new fraud prevention strategies to the emerging role of the metaverse in banking.

What follows is a discussion with Tolga, reflecting on that experience.

[Carlo]: Tolga, tell us, what do you do as Head of Innovation for HSBC Europe?

[Tolga]: My role is dedicated to making innovation happen as part of our culture and day to day work, focusing on our business strategies and priorities. For that purpose, we create an open, accessible and collaborative environment so that everyone in the organisation can participate in multiple Innovation activities. We also try to operationalise Innovation across the region. As a central Innovation Team, we have designed an end to end Innovation framework which is tailored for our region. We evolve our Innovation Strategy to understand our business needs, emerging capabilities, market trends and other internal/external factors. We match new capabilities to business needs to bring new ideas where they can have the highest impact.

[Carlo]: We often talked about the value of running agile initiatives and testing ideas through minimum viable products. That’s easy for a start-up, what do you need to make it work in an organisation as large as HSBC?

[Tolga:] In a large organisation such as HSBC change can take time to implement. Successful change requires the right sponsorship from the start. It is essential to line up senior stakeholders that will help us to build engagement. Once the right sponsorship is in place and we have senior management agreement we move onto collaboration. Collaboration is the key to change culture. We focus our collaborative approach on learning. We encourage experimentation and make space for new approaches. Anybody is free to take action, provided that the course of action can be reversed, if it is not effective. You try, if it doesn’t work you go back to the old way, or try a new experiment. As well as trying to develop our culture we also partner with external organisations. In particular, we see value in tapping into the expertise of our technology partners.

[Carlo]: How do you balance initiatives that you run internally, versus the ones in which you collaborate with external organisations?

[Tolga]: We want to be able to develop and build our own innovative solutions, from small improvements to major projects. Innovation is key to improve our customer experience, achieve our targets, measure and drive efficiency. We need it to drive our business forward, under the pressures of cost efficiency and an evolving customer proposition. Our partners can augment and complements our approach. For example, we may create a solution that challenges our traditional ways of working, or is outside of our frame of reference. Consulting with our partners allows us to validate our plans. We look for individuals and teams with complementary mindsets and experience, to augment and support our teams so that we lead with our own thinking, validated and supported by partners.

[Carlo] What are the key factors you are looking for when you collaborate with an external party?

[Tolga] The suppliers that we work with in the innovation space understand the nature of global banking, the challenges that we face, the economic landscape, the regulatory environment and can bring novel thinking, creative solutions and an understanding of how technology can improve what we do.

All of the relationships that we have thrive when the partner understands our business and our mindset. Some elements of our organisation are common across the banking industry, but we consider a number of aspects of the way we operate unique and specific to our own culture. From this point of view there is value in working with suppliers that have had long relationships with HSBC.

[Carlo]: What do you think about the collaboration with IBM Client Engineering for innovation?

[Tolga]: We had great engagement and collaboration in 2022, working in an agile way and we made concrete progress working together. The Client Engineering team was keen to test new ideas, leveraging their proven practices. The team is flexible and most importantly understands our needs and can act as a conduit into IBM and the scale of what the company can offer. The Client Engineering team helped us gain insights into emerging technologies and the future capabilities that would help us deliver better solutions for our customers.

[Carlo] When you try something new, how do you measure progress/success, when you don’t know the outcome? How do you report progress to your sponsors?

[Tolga] It makes sense to start with a clear plan, signed off by sponsors and key parties. We run a number of major change projects at any one time. Measurement and assessment of our work is key to demonstrating success. Innovation as a concept is often ephemeral and conceptual but we are a business, and the business is driven by metrics. We want to be as clear as we can about what we want to achieve by adopting a new approach, part of that is defining how we are going to measure success. We have to justify investment and ensure that we are adding value. Identifying the metrics that will show whether the investment will produce a positive outcome, and its benefit to the organisation, is an integral part of the innovation process.

[Carlo] In Client Engineering we use something called the “Value Engineering Method”. This kicks off with a workshop in which we identify stakeholders, outcomes and value measures. We call it “business framing”. It is a highly collaborative activity and one of the most important aspects of co-creation. Only the customer can qualify the real value of leveraging a new technology in the context of their business. We do it face to face when we can, but even before Covid, we often run the activity remotely, using virtual workspaces.

What is your experience in using remote collaboration to drive innovation? What are the benefits and limitations?

[Tolga] We love the vibe of human interaction but that isn’t always possible. Remote collaboration is an integral part of the modern working environment. I love being in a room with others working on creative solutions; however, remote collaboration offers value in different ways. It’s easy to forget the impact of an innovation that allows a colleague in Russia to draw a sketch on a virtual board so that my Israel and France-based colleagues can understand exactly what a new process is going to look like. Video conferencing and virtual team spaces allow us to get together across borders at all times of the day and solve problems together. We operate in 20 countries across Europe. Our partners are everywhere in the world. Ideally, we can mix it up and have more physical sessions to complement our virtual culture. However, if you think about it, this is a great example of how technology solutions move from the innovation space to our day-to-day life. When we first used video conferencing, group chats, virtual whiteboards, we were probably just wowed by the new technologies. We now take them for granted and we almost forget the value they bring and how they make our working lives easier.

[Carlo] Thanks Tolga, reminding us of the concrete impact of innovation is a great way of wrapping up our chat.

I am looking forward to seeing the collaboration between HSBC and IBM Client Engineering continue next year!

[Tolga] I am too. We have started a journey together that I believe will bring further exciting developments.

Learn More:

https://www.ibm.com/client-engineering

https://www.ibm.com/lets-create/