Listen to part two of our interview with Chip Conley here, or read our summary below:
Our industry is constantly changing. With technology, new FinTech competitors, megabanks, regulation, and changes in consumer behavior, community financial institutions have a lot to keep up with.
But marketing expert and hotel industry veteran Chip Conley says there are three rules of innovation you can use to get ahead of the disruption. We recently sat down with him to learn about those rules and how you can use them to your advantage.
1. Foreshadowing precedes innovation and destruction.
How do you predict the next wave of innovation? Conley says that changes in consumer behavior and the competitive landscape often foreshadow that an industry innovation (and possibly destruction) is around the corner. And if you’re only focused on your business, it’s hard to notice those changes because you don’t actually have your eyes on the industry’s big picture.
Conley recalls that when AirBnB disrupted the hotel industry, the foreshadowing elements were already there. Companies that let people rent out their homes to travelers had been around for years, which showed that there was a market for this. However, those companies did not offer the consumer-friendly digital experience that Airbnb eventually came up with.
2. There is a consumer need that the current industry is not meeting.
Think about Maslow’s Hierarchy of Needs, with basic and physiological needs at the bottom and self-actualization on the top. Now, apply this hierarchy to consumers. When you do this, you can break the pyramid into three levels: consumers’ expectations, their desires, and their unrecognized needs. Innovation happens at the top of this consumer pyramid.
When a new innovation comes out (think about TV channels on airplanes), it’s new and exciting for consumers. But within the next few years, it just becomes an expectation. Conley says that it’s usually pioneers rather than established brands that come up with these new ideas because they have a smaller scale and more willing to take risks.
3. The innovation becomes a trend.
Once the foreshadowing and the market need are combined, a long-term trend appears and established brands wonder how they can be a part of the new innovation.
Conley’s advice to community financial institutions? Be aware of what smaller players in the industry, like FinTech companies, are doing. Whether it's because of data they've gathered or through entrepreneurial intuition, these companies are making bets on foreshadowing elements that hint at some unrecognized needs established players aren’t meeting.
Missed part one of our interview with Chip Conley? Listen to it here.