Jananas

In 2008 I took a course at Rotman called Corporate e-Business Strategies. I’d originally had high hopes for it, as I believe that this is an area that businesses consistently have difficulty with. In the end the course was so terrible and our feedback so bad that it was cancelled and removed from the curriculum.

As part of our required course work, we had to enter RBC’s Next Great Innovator Challenge. Our team made it to the top 9. We were in the running for the last spot in the top five, but didn’t get enough votes to make the cut (such is life). However, I did really like the underlying premise behind our concept and thought it had some really interesting applications. The challenge we had was to “Suggest an innovative concept, product or process from another part of the world or different industry that Canadian financial services providers should adopt“.

The innovation we proposed to adopt was Human Terrain Systems. HTS are a US Department of Defense operations innovation that embed anthropologists and social scientists within combat units to provide cultural intelligence and reduce operational costs related to ineffective and unnecessary missions. The experts provide background and advice on local customs and traditions, political systems and tribal structures.

The diagram above highlights the benefit of an HTS team. An example of the success of this program is that the US Army’s combat operations in Afghanistan decreased by 60% over a period of eight months, including reduction in logistical and personnel costs, as well as eliminating missions that were no longer necessary (source). What the anthropologists discovered was that areas with a high proportion of widows corresponded to areas with a high proportion of insurgents.

Why? Charting the relationship between household income and the proportion of insurgents revealed that households with lower incomes had significantly higher rates of recruitment. The anthropological inference was that many of the households run by widows were living in poverty (the father having been the primary breadwinner). This put pressure on the sons to take well-paid jobs with the insurgents in order to ensure that their families are taken care of.

All well and good to understand why its happening. The real benefits then come from novel and innovative solutions that can be developed now that we better understand why the problem is occurring. Rather than merely fighting the insurgents (and causing more death and mayhem in the process), the Army developed a program to offer job training to widows to provide a new income source for those families. In doing so they remove the need for youth to join the insurgents.

Okay, so I’ve covered what HTS teams are, how they work, what kinds of insights they can develop, and the benefits the Army has seen as a result. How can this be applied to banking in Canada? Keep in mind that my example and reasoning here are going to be different than what our team submitted in the Next Great Innovators Challenge. But its my blog and I’d much rather put forward my spin on the concept.

First, the Problem. Companies put too much faith and money into Market Research to provide answers. Market research can only be as good as the questions that are asked. If you start with bad questions, you’re doing to get bad data. How good or innovative can your insights be when you ask the same old questions? Layered on top is that its easy to manipulate the data statistically to make it seem good/bad/meet your objectives. Given that, are the answers even really relevant. Even more basic is that doing market research makes a fundamental assumption – that your customers know what they need (i.e. that they can recognize an unfilled need, express it clearly, and not got bogged down by the wealth of options that they might “want” but never actually use). The end result is that I’ve seen companies spend upwards of a half million dollars to get research that wasn’t relevant, timely, or in the end useful. In fact, internal employees had already provided more valuable feedback on the design and its potential than the research did.

I’ve outlined what I view as a problem. Now a solution. How about instead of relying on market research to provide “insights”, you embed an anthropologist in the front lines. Have them work in several branches over a period of time. Let them interview customers, collect data, and think. I’ll guarantee that they’ll come up with a need that currently isn’t being filled and at a whole lot less than market research would cost (a couple of salaries is less expensive than market research would be). They’ll tell you what customers need, not what they think they want. And most importantly, they aren’t tainted by the preconceived notions that come from having worked within the industry.

Any thoughts?

More from jananas

• Life post-school (read, what the f*** are my career choices?)
• When Outsourcing Goes Wrong
• Human Terrain Systems used to Build Corporate History and HR Capability