New Markets Advisors
  • About
    • Our Distinct Model
    • Team
    • Join Us
  • Services
    • Develop Growth Strategies
    • Uncover Jobs to be Done
    • Build Innovation Capabilities
  • Industries
    • Arts and Culture
    • Consumer Goods
    • Financial Services
    • Healthcare
    • Social Innovation
    • Technology
  • Past Work
    • Success Stories
    • Recent Clients
    • Testimonials
  • Our Thinking
    • Leading through the Coronavirus Crisis
    • Books
    • Working Papers
    • Articles
    • Blog
    • Speaking Engagements
  • Contact

New Markets Insights
​
Strategy and Analysis from Innovation Specialists

Financial Services Innovation Lessons from Rule-Breakers

5/5/2010

 
By: New Markets Advisors
In a speech today at a major innovation conference, Dartmouth Professor Vijay Govindarajan talked at length about how Grameen Bank turned upside down all the traditional notions of financial services in Bangladesh: small loans, no risk officers, no collateral, bringing the bank to the village, and so on. 
The Grameen model earned its Founder the Nobel Peace Prize, in addition to creating a very large and sustainable enterprise. The lesson can applied broadly in financial services innovation, as well as to other industries.
In a famed episode of the TV series Seinfeld, the cast encounters a set of four friends who look just like them, but behave in a totally opposite manner. Feldman, for instance, lives across the hall from his best friend, but always knocks before entering, brings groceries, and has well thought-out schemes. This new crew becomes known as the Bizarros.
​
It can be very useful to think through what the Bizarro version of a company might be. The exercise can lead firms to consider how they might violate long-held rules of an industry in a compelling way. Companies find the exercise especially fruitful when they focus their analysis on a customer set that is poorly served by traditional models today.
​
Grameen turned the banking model upside down with respect to poor villagers. Another firm, AllLife, has done the same for sufferers of HIV and diabetes in South Africa. AllLife, which is an unabashedly for-profit enterprise, targets these large groups of people that are highly motivated to buy life and disability insurance but viewed as unacceptable risks through typical financial services lenses. The company pursues customers that other insurers shun (violating the maxim that insurance is sold, not bought). It requires its customers to regularly submit medical information showing compliance with therapies for these diseases. It regularly interacts with customers to remind them to adhere to their treatment protocols.

Because Bizarro endeavors can lead to offerings which look alien to the core business, it is extremely challenging to formulate these ventures within existing business units. The mindset required, partners, metrics, and incentives may all diverge significantly from norms. The reality of most businesses is that there is not flexibility to separate a venture totally from the core, and indeed it may be essential to commercialize the concept within the main business to exploit the company’s unique advantages (a network of bank branches, for example). However, the process of creating the concept should be as divorced as possible from the day-to-day definition of the business. It should, for example, be focused on the needs of a particular customer set rather than be defined by how a certain family of existing products might be grown. If the business potential is shown to be sufficiently strong, then commercialization may succeed even if it happens within the core.

Bizarro companies are rule-breakers. For financial services innovation and other endeavors, this approach can enable escaping commodization and creating new markets that a company can own.

Story by Steve Wunker.


Comments are closed.

    This section will not be visible in live published website. Below are your current settings:


    Current Number Of Columns are = 3

    Expand Posts Area =

    Gap/Space Between Posts = 10px

    Blog Post Style = card

    Use of custom card colors instead of default colors =

    Blog Post Card Background Color = current color

    Blog Post Card Shadow Color = current color

    Blog Post Card Border Color = current color

    Publish the website and visit your blog page to see the results

Picture

ABOUT
Our Distinct Model
​Team
​Join

SERVICES
dEVELOP growth strategIES
UNCOVER JOBS TO BE DONE 
BUILD INNOVATION CAPABILITIES


​​

INDUSTRIES
Arts and culture
​consumer goods 
financial services
healthcare
Social Innovation
Technology

​

PAST WORK
success Stories
recent clients
Testimonials

OUR THINKING
Leading through the coronavirus
books
working papers
articles
blog
SPEAKING ENGAGEMENTS

NEW MARKETS ADVISORS
50 Franklin Street
​Second Floor
Boston, MA 02110
United States

Tel. +1 617 936 4035

Contact Us

New Markets Advisors: Empowering Companies to COMPETE DIFFERENTLY ​© Copyright 2021. All Rights Reserved. Terms of Use. PRIVACY POLICY.
  • About
    • Our Distinct Model
    • Team
    • Join Us
  • Services
    • Develop Growth Strategies
    • Uncover Jobs to be Done
    • Build Innovation Capabilities
  • Industries
    • Arts and Culture
    • Consumer Goods
    • Financial Services
    • Healthcare
    • Social Innovation
    • Technology
  • Past Work
    • Success Stories
    • Recent Clients
    • Testimonials
  • Our Thinking
    • Leading through the Coronavirus Crisis
    • Books
    • Working Papers
    • Articles
    • Blog
    • Speaking Engagements
  • Contact