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Innovation at Capital One

Mark Rogers is a Senior Product Manager at Capital One where he is responsible for creating and incubating new products in financial services. Prior to Capital One, Mark was a design strategist at Fidelity Labs.

Question to Mark – With your background in physical product design, how do you think about the intersection of design and business ?

Mark Rogers : What I love about design is that it can emerge from the art, engineering, or business discipline. I started out in art school studying design. We utilized the tools of shape, color and material. In the work world, I noticed that this type of design was often put at the end of the process. This benefited products in established markets where everyone knew what to expect. Most of the assumptions made in building those products had been proven successful in previous versions. As a result, the design team could focus on adding the final level of  “delight.” However, innovation projects were a different story. Designers were good at testing assumptions, but they weren’t involved in the planning of bold, risky new products. I remember one medical project required me to do a usability test on an insulin injector for FDA approval. The device was great but not easy to use. My job was to design instructions to get users through the process. In doing so, I realized that the device could be re-designed to make the instructions unnecessary. When I told the inventors, they agreed, but said those engineering and business decisions were already set in stone. This inspired me to move to the front end of innovation. Stanford’s graduate school for design specialized in this area by combining engineering, business and design in true Silicon Valley startup style. Since then, I have been helping big companies scale innovation mindsets and skill sets.

What is the Garage at Capital One ?

MR : The Garage is an innovation hub in the Capital One Financial Services Division. It’s a maker space that combines exciting technology with a design focus on the customer. Our goal is to reinvent the business of finance. We do that by tackling hard problems and spreading a culture that knows how to experiment. The team I work on goes out to teams across the business and helps build their innovation muscle. I also focus on bringing the best of the outside in by cross-training with outside teams.

How does innovation occur at the Garage ?

MR : To make innovation more rewarding we do radical collaboration and running meaningful experiments. At Capital One, we believe in cross-functional teams but with diversity comes the need to harmonize those perspectives. When a diversity of thought and skill is applied to a problem, along with a way to make quality decisions quickly, then you achieve a magic boost in performance. Our team helps design those “ harnessing moments “. We call it “ working on the way we work ”. The second unique thing about Capital One is that we have embraced experimentation since our founding and continue to do so. Often experimentation happens in startups but stops when companies become large and successful.

An example of these two specializations (radical collaboration + experimentation) can be seen in our recent work with the Dallas Symphony Orchestra (DSO), one of our long-standing community partners. We are always looking to cross-train with the best in the world so we partnered for a day to see what might happen. The DSO has a vision to bring music to a new generation and wanted to know how we would approach it. I arranged their organization into cross-functional teams. Then we arranged for a diversity of people to interview. Some loved the DSO. Others went once and never came back. The third group was never interested enough to go in the first place. Each team talked with their interviewers to understand why. Then we arranged for Youtube stars with over a million hits to have conversations with orchestra. We watched comedian James Corden from the Late Show do carpool karaoke with Usher, and the wildly successful Kyle Hanagami teach people how to dance to the world’s most popular music. The diversity of thought and approach was sure to spark some interesting new ideas. After the orchestra went through a brainstorming and prototyping process, we brought in new users who sat through a rough and rapid new experience of going to the DSO. They gave feedback and sent the DSO teams back for refinements. This is a simple example of collaborating across disciplines and prototyping new ideas in real life to find what works.

How does “ cross-training “ better position an organization to innovate for impact ?

MR : We cross-train our groups with the best in the world from other companies. We have found ways to share the mindsets, skillsets and management practices that make our best innovators shine. It started out when I was hosting a two-day design thinking workshop with a class of about 30 people in financial services where it was recognized an airport is a great analogy for many of the problems people have in making investments whereby –

First, there are an overwhelming set of choices, whether you are booking a flight or starting to invest. Who do you trust ? How do they help you know you are getting the best deal ? The check-in process at an airport is similar to the account opening process in financial services. It’s a challenge ! How do we make it better, easier, quicker ? Then there is the need to deal with changes, cancellations, various unexpected events, etc. necessitating a need to re-plan your travel arrangements or financial plans. On the internal side of things, airports move people and their bags, financial services move money. Both have to end up where they are supposed to or have an unhappy Customer. Further, we there is a need to innovate on on-line, real-time, all-the-time systems (ie: can’t fail) ! The list of similarities goes on.

Our team contacted a design thinking leader at a major airline and asked if we could set up a joint training at the local airport. When they agreed we sent a bunch of associates for cross-training in airline operations. I handled all the logistics and teaching for the day and made sure we were designing around a problem that was important to them. It was fantastic and people loved mixing teams. We sat behind ticket counters, traveled to the gates, prototyped better ways to get off airplanes, and rushed wheelchair bound passengers to the right place when their departure gate was changed on short notice. Everyone saw their own company’s problems in a new, and often easier to understand way.

It went so well that we formalized a group of non-competitive but analogous companies to cross-train with. Each company competed at the premium end of the mass-market with a focus on providing the best customer service. The companies also shared customers. It was common for a customer to invest for retirement with one member of the group, shop for clothes with another member, fly with another member, and have their computers serviced by another member. The idea was that each company would host their best design thinking training and invite members from the other companies to attend. Everyone got to see how the investment company trained people, and at the end of the workshop, they got all the materials. Then we’d go to the clothes retailer who would incorporate whatever they wanted from the investment broker and give their best training. Then we would go to airline, etc. It was a very powerful way to be at the cutting edge of corporate innovation because we experimented with so many approaches.

More recently, we have joined forces with the Design at Business community to facilitate people with innovation responsibilities connecting. These are entrepreneurs who work inside large corporations as “ intrapreneurs ”. The problem this group is solving is that when you go to a conference, there are probably 20 folks who have your same job or shared interests at other companies that you’d really like to meet – but usually don’t since it’s really chance that you will meet.

The Design at Business people curate conversations with only those 20 folks you want to meet. They are very intimate and in-depth discussions of important topics. The last one I hosted was called “ Stories of Design Thinking at Scale ”. We invited leaders trying to spread innovation through their companies to share their experiences and war stories. Part of what we do is package those learnings into something useful we can share with the rest of the world. In some ways, academia leads the world in teaching, consultancies have the ultimate freedom to innovate on process, but it’s this new breed of human-centered corporate entrepreneurs that are defining the best practices of teaching the innovation process within enterprises that have tremendous complexity. It’s stories of what is working that we try to publish. Our first one was on mindsets. The second book is on skillsets of the best corporate innovators.

I think the key to a rich cross-training program is delivering great value to partners you want to collaborate. Most organizations would love to have a top-notch training opportunity for their employees to increase the rewards from innovation and better manage the risks associated with change. It’s an opportunity to offer that experience and fast track learning. Since lots of people want to see behind the scenes, it’s forum for organizations to make a tour of the really cool parts of their company available. Everyone wants a chance to befriend and learn from people who have a similar job or interests at other enterprises. For this to occur, curate an invite list so that every attendee has two people at the event they want to meet. All of this can happen without divulging confidential information, showing sensitive work, or giving away trade secrets. You don’t need NDA’s if you are thoughtful about designing the invite list and activities. It’s really interesting and fun.

Since you were originally trained in Industrial and Interaction Design, how does that help in designing digital products ?

MR : I think the joke about classic design education is that students who graduate with the skills to design objects of beauty are asked to reinvent the healthcare system on their first job. I think that joke shows how the field of design is being leveraged in three new ways.

The first is to make new technology attractive and delightful. Essentially the role of the designer remains unchanged. Instead of making elegant designs capable of being drop-forged in a factory, they need to make sure their vision is easily coded, and is mobile responsive. What makes you good at one type of design makes you good at the other. The designer’s superpower is making art that scales.

The second change is from designing objects to designing systems of interaction. This is where car designers are being asked to reinvent the healthcare system. The designer’s superpower is user research. The reason they are so good at this job is because Industrial Design prizes the role of user research. It comes from the field of anthropology where people developed tools to understand the complexity of human experience. Product designers take classes in understanding how to investigate unmet human needs, uncover the triggers of strong emotions like hope and fear, and map the journey someone goes through to complete a task. This makes design-minded folks very good at identifying opportunities for improvement that aren’t obvious. When you couple this research skill with the designer’s ability to tell visual stories, then you see designers who can help entire teams get on board with an idea. It’s a powerful place to be.

The third change is from product to business. The designer’s superpower is iteration. When I went to school, there was constant conversation about designers who stayed with the craft and those who left for management. My impression was that one was more respected within the design community than the other. I think that’s a false choice. Instead of saying there are two types of creatives, those who can design and those who can manage, I think it is more true to say the world needs two kinds of things to be designed well, products that take care of our needs, and the business that sustains them. Too often great product ideas fail because they cannot find a business to sustain them. The people that designed the first computer created a truly great product but executives couldn’t see how valuable it would be. Many Executives in enterprises today make the opposite mistake, they fall in love with an idea that isn’t very good and then wait until it hits the market to learn the truth. I think the most creative place to be is in the entrepreneur’s seat. Here you can design experiments that show the real value of great ideas or help teams try their half-baked ideas in the real world and figure out why they are failing. It’s rare that the idea is 100% bad – it’s more often the product is failing to deliver one critical benefit to the customer, or that the customer has a real need about something different they haven’t been able to tell us about. Helping teams dance between the customer, the product, the company’s willingness to scale, and the market’s willingness to pay requires the designer’s ability to iterate. A foundational tenant of design is “you won’t get it right the first time.”  Walk into almost any school and you will see design students producing 10 sketches and then selecting their favorite. Then they will do three more versions of that concept before picking the final winner. That’s what the business world needs for innovation to meaningfully improve outcomes.

Designers can help prototype ideas with human power and existing products instead of a lengthy code build. This allows them to go to customers next week and say, “ Will you use this ? ” instead of “ Do you think you would like this ? ” Then they enter user research mode and watch what happens. If nobody uses it, they have conversations to understand why. They unearth important needs the current solution leaves unfulfilled. That’s iteration 1. Then they go back and change the prototype and try again. That’s iteration 2. Then they start trying to exchange money for this. When people won’t pay, they go back to user research mode and ask why. When they learn the next best alternative product is free and it’s “ good enough ”, then they can help the team refocus on another opportunity area. This can happen in a few weeks and the project doesn’t ” die “, it just iterates for a while until the team gets to a good place. This is a move away from delivering an “object of desire ” to delivering a “ benefit worth paying for ” – which is a real compliment to a designer. The master stroke is applying the designer’s ability to iterate with the project team’s critical assumptions. So often, these assumptions sound good on paper, then we find after launch it isn’t so. That’s the truth design-minded folks can get to quickly and then fix it through iteration.

What books have you read recently that have influenced your work in innovation ?

MR : I like The Innovator’s Way by Peter J. Denning, Robert Dunham, John Seely Brown. Its central insight is that we all live in stories that direct the way we think and feel about what happens. Those stories dictate the paths that seem open and closed to us. I think innovation is often about flourishing in difficulty rather than waiting for the perfect opportunity. Being able to design the stories we live has a dramatic effect on our ability to create successful opportunities.

The second insight is that the art of innovation is built on the bedrock of conversations for possibilities that take care of what people care about. That is where people get committed to start projects, staff teams, gather resources, and take risks. This means that an innovator’s toolkit needs to include the ability to design and iterate on conversations for commitment as much as they can design and iterate on visuals.

The third insight is that innovation is best measured by the number of people who adopt a new way of doing something. This means that the early work of breakthrough innovation focuses on giving people a real chance to adopt or not and then figuring out why. This conversation is similar with internal teams like legal to understand what they need to adopt the support of something new. That’s why we focus so much on running experiments as part of the early research process. It helps us have the best conversations.

Dec 11, 2019         –         Eli Woolery / CAIL Innovation Commentary         info@cail.com