Westpac The Hive: Seeking Innovation

A TRA interview with Ian Hill, Westpac Group Head of Innovation.

TRA:Tell me about the genesis of Hive and why it came about?

Ian HillAbout a year ago, it was in the works. I don’t think there was any one catalyst for either starting the hive or deciding to bring someone on to be the standard bearer for the innovation function. I think that those trends we see happening in general around enterprises were things that leaders started to recognise would apply to banking too. What I mean by that are everything from changes in regulations that would drive down margins to changing customer expectations driven by tech or new tech companies. There are trends around competition both coming from offshore and heating up locally coming from other players like Coles getting into banking. And then disruption which has two aspects: 1) having seen other industries that thought themselves pretty well-established just crumbling, and then more explicit the fintech innovators starting to disaggregate the value chain and nip off bits and pieces here and there. So I think the confluence of those trends and in the presence of our CEO and COO, who are both innovation minded and know the vocabulary, it was the right time.

It’s also about losing talent too, right?

Yes, great point. You want to deliver great innovation and have a reputation for doing so. One reason you want to do that is because you attract innovative and top flight people and partners that can then strengthen your ecosystem and allow you to innovate emore. So it is a virtuous cycle. The reverse of that is if you are not innovating and doing one of those steps then you are losing those people. A brain drain occurs.

Some of your competitors have also taken similar approaches, so there is an element of needing to keep up. Right?

Yeah. To some extent we have even been ahead. We have ‘worksmart’ which is in effect our agile workspace. Which we have been rolling out generally across Westpac. And then we have the Hive which is really an innovation workshop more in the vein of a workshop at Microsoft or Stanford Design School. It’s not intended as the same team coming into work each week. Rather it is four teams that are actively in the process of innovating or incubating something to come in and IDA, prototype, test, learn, fast fail, and get a minimum viable product. The Hive, as far as I know, was the first of the big four to be an innovation workshop.

I like that you have put in place 3D printing. A lot of people we talk with refer to innovation as about coding alone. We think it is bigger, do you agree?

Yes absolutely. Most people at Westpac are on the same page with this. We think innovation is anything new way to solve a customer need. That means it could be something that is tech related or it could be something like changing the layout of a branch or changing the way you interact with a customer, or changing the way you explain something. All of those things can be innovation.

Who can come in and use the The Hive?

There will be large chunks of IT, there will be some of them in the CBD. It is intended on a first pass to be successful group wide. My team is effectively a shared service to all the teams across Westpac looking to innovate. We actually have been both in tech and out of tech, it’s not an essential part of our remit per se. the second group is the Hive was fit for purpose to bring in outside partners. Those outside partners are everybody from universities to corporate peers like Telstra to thought leaders to customers. Literally two weeks ago we ran an innovation workshop around the health care space and had a panel of customers that came in and were part of our ideation session.

So how does it all practically work?

Getting into the Hive is a matter of booking it. Probably one step removed from booking a conference room. Getting support from the innovation team, were we offer resources and methodologies and facilitators, is a matter of going to an online portal for internal people. Even though it is accessible to anyone, it is usually initiated by someone internally or at least brokered by someone internally. Then it depends where they are at in the innovation journey. So we might just start with inspiration and human centred design. Find out what their needs are, what their dreams and inspirations are? What are their pain points? Try and figure out ground zero and what the possibilities are. That is usually the very first thing. Then out of those types of exercises we usually have a platform or value proposition to brainstorm ideas with internal and external people. And then you flip over into prototyping. You select your solutions. Lay people who think about prototyping will think of it as something you do once you have a fair idea of what you want. But prototyping can happen when you barely even know what the parts are yet and the prototyping itself is the mechanism by which the idea can coalesce. It is the tool you use to get the idea into a more solid state. The first prototypes will literally be pretotyping with a hand drawing on a page then to wire frames, to interactive sites, to 3d printed objects and so forth. We help people go through those phases and to finally decide. Finally the goal is to get into some minimal viable product. A product or service that customers will find acceptable to engage with in the market. An example of this is a concept we had of emergency cash, which allows you to go to a nearby ATM if you have lost your wallet, call up and they would identify you on the phone, they know you are at the ATM, they give you a special code to punch into the ATM and you can get some cash right there.

That came through the Hive?

No, just before. But we saw it work as a minimum viable product. So we iterated and thought you could do it in all circumstances not just emergencies. So it also became linked to the app and your thumb print so you could log into your app and do it that way.

It sounds like there is also an ambassadorial function in dealing with issues?

Yes, that virtual cycle. My team tries to uplift our game in all aspects and on the ecosystem side we have fortnightly events called buzz sessions. They are sessions where we bring people in to talk about issues such as crypto currencies, cloud computing and other stuff coming down the pipe that is innovative. We also do papers for the board about how innovation functions and on topics like disruption. So we need to find external examples that inspire and motivate. And buzz sessions are open to everyone.

How do you define success?

That is an evolving question. I’ve been here a year and there are some stats out there that say with enterprise innovation to actually go from scratch to commercialising is around 3 years. We, in six months, are close to commercialising two things that aren’t public yet. But we are getting close and it has been less than a year. To me that is one way we can say we’ve been successful in the short term. I think another way we can say we are successful is we have a lot of brand recognition for the Hive and the innovation team. People are coming to us with ideas. Coming to us and asking us for help. That is success on two fronts. One it shows that people are learning about our offerings, but it also shows that overall culturally people are starting to feel inspired and a hunger to participate.