Royal Bank's Innovation Challenge

An Interview with Avi Pollock, Head of Applied Innovation at the Royal Bank of Canada
By Sandy Staggs
As Head, Applied Innovation at Royal Bank of Canada Financial Group—the country's largest financial institution and the fifth largest bank in North America—Avi Pollock leads a team with an enterprise-wide mandate to stimulate innovative activity.

With a view to "what's next," "what's new" and "what's different," Applied Innovation identifies and validates emerging technologies and opportunities that have the potential to drive client value and differentiate RBC from its competitors.

RBC provides personal and commercial banking, wealth management services, insurance, corporate, investment banking and transaction processing services on a global basis. RBC employs more than 70,000 full and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 46 other countries.

Pollock, based in Toronto, recently shared his vision of innovation in the financial sector in these turbulent times with

Sandy Staggs (SS): What role and level does innovation play in your business/business model/culture?

Avi PollockAvi Pollock: Innovation plays an important role at all levels of RBC—we define it as "connecting what is possible to what is valuable for our clients and shareholders" with the understanding that a focus on value and execution are paramount. We recognize that innovation is critical across multiple dimensions; it is a driver of client value and impacts the way we service and provide advice to our clients. It contributes to business growth, creating new earnings streams and maximizing opportunities from existing businesses. It enables strategic agility, making us not only more responsive to the markets but also better able to withstand change. Innovation also plays an important role in attracting and retaining talent; employees are more interested in working for progressive organizations.

We are a large financial institution and as such our innovation agenda needs to be in line with our strategy and role in the industry. One of RBC's strategic themes is: "Innovation in Everything We Do." We interpret innovation so that it takes on meaning at all levels of the organization, thus creating an innovative culture for RBC employees.

SS: Can you name some tools and techniques you have utilized—and with what result?

Avi Pollock: Innovation is about change; it requires strong management support and infrastructure to enable individuals who want to be innovative. The best measure of success for our innovation efforts is seeing ideas get into market and create real value for our employees and clients.

The RBC Innovation Council is comprised of senior leaders from across the enterprise and is responsible for supporting and promoting innovative initiatives at RBC. The Council meets regularly to set strategy and review progress on innovation goals for the organization. The group plays a substantial role in incubating some of the more transformative innovative initiatives with funding and sponsorship.

The Applied Innovation Team, which I lead, has an enterprise mandate across all of our business lines. We work to support the Innovation Council and play a key role in identifying, evaluating, developing and promoting opportunities to innovate across the enterprise. Our mandate is to drive the innovation program, help the organization look to the future and explore new opportunities. Most importantly, we aim to find ways to bring that future closer by taking action today, through pilots, prototypes and test & learns. We by no means own innovation for the organization, but are dedicated to helping further the innovation agendas of our business partners throughout RBC.

We have established an Innovation Lab, which is a stand-alone environment to assess new technologies in a safe, off-network "sandbox" environment. When possible, we make some of the trials available to employees through an internal "beta" site in order to get feedback; RBC employees are also RBC clients.

We have recently launched an idea management program that reaches across organizational silos to solve meaningful business challenges by tapping into diverse perspectives. This program, managed online, provides a key way for business leaders across the enterprise to identify new ideas.

SS: What else do you do to encourage innovation?

Avi Pollock: Under the leadership of the Innovation Council, our team also runs the RBC Next Great Innovator Challenge. We go out to college and university students across Canada asking for their innovative solutions to a "Challenge Question" with over $45,000 in prizes for the winning teams. The third year of the competition kicked off in September 2008 and the question this year asks students to: "Suggest an innovative concept, product or process from another part of the world or different industry that Canadian financial services providers should adopt." We're not looking for them to simply take an idea "as is" from somewhere else but rather to take the interesting germ of an idea and put it into a Canadian financial services context. The runner-up submission of the first Challenge has already gone live to great acclaim: it became RBC p2p, the RBC site that's by and for young adults. We are also currently testing Year Two's winning idea, the VIBE personal banking workstation and have a number of other winning submissions at various stages of assessment.

SS: Are you collaborative? Do you outsource or use outside consultants and companies?

Avi Pollock: In addition to looking to our employees as described earlier we have a number of ways we reach outside our four walls. Our client insights teams are working with customers and are constantly looking for new insights and ideas that can translate to value. We work with many of our large vendor partners like IBM, Microsoft and HP to explore the innovations they have in their labs and identify new concepts that we can take to market.

SS: Have you used online ideation software or online sites, etc?

Avi Pollock: As previously mentioned, we have an online idea management platform that lets business sponsors identify a challenge and go out to a community of individuals for solutions. We also are extensive users of SharePoint, E-room and other collaborative tools. We are currently investigating some of the newer enterprise social networking platforms to understand how they can contribute to enhancing our collaborative culture.

SS: What is the most exciting innovation you've been involved in developing?

Avi Pollock: Personally, the one I am most proud of launched in Canada to a staff, friends and family pilot group a few weeks ago. It's called RBC Mobex Mobile Payment Service which allows users to easily and securely send and receive money instantly using a text message on their mobile phone. The service is designed for person-to-person payments in situations where individuals may not have the cash on hand, such as reimbursing a friend for lunch, collecting for the office coffee run, paying the babysitter, or buying a garage sale item. The service is ubiquitous in the marketplace, available to clients of any Canadian bank and using all Canadian cell phones. The concept was incubated through the Applied Innovation team and supported by the Innovation Council before being anchored with the business sponsor who ultimately took it to market. It's an offering that is truly unique in the marketplace and I'm proud to have been involved in its launch.

SS: What is the most difficult problem you or your team has solved?

Avi Pollock: All of the initiatives approached through an innovation lens are challenging in their own ways because of the change involved. Embracing a new business model or exploring a new way of collaborating or testing an emerging technology all have differing types of complexity. It is exciting but more often it's just par for the course when trying to do something new or different.

SS: What type of training have you done? Six Sigma? Edward DeBono?

Avi Pollock: A number of these are used across the enterprise. For our innovation initiatives we use traditional pipeline and portfolio management that takes ideas through from concept to implementation.

SS: When you are stuck, what do you do?

Avi Pollock: I read. As someone who is just plain curious about a world in constant change one of the best things about a job like mine is the sheer amount of information I'm exposed to on any given day. I love reading about developments in all industries and geographies, not just because of the need to stay current, but for the more exciting exercise of applying those insights to the financial services industry and RBC in particular. It's a form of mental gymnastics that always gets my enthusiasm going.

SS: Can you recommend any particular books on innovation that you or your staff have read?

Avi Pollock: The works of Clay Christensen and "The Alchemy of Growth." Other ones that we've passed around more recently include: "The Black Swan," "Blue Ocean Strategy" and Peter Schwartz's "Art of the Long View." We also subscribe to many blogs on innovation.

SS: Have you ever heard of IdeaConnection?

Avi Pollock: I have not heard of IdeaConnection, but I am always interested in sourcing great ideas.

SS: What factors make online innovation activities appealing?

Avi Pollock: The ability to reach out, invite others and allow them to participate on their own terms is encouraging and creates diverse solutions.

SS: Any final comments?

Avi Pollock: Innovation requires a focused effort, allocation of resources and most importantly leadership and sponsorship from all levels of the organization. In these turbulent times it is even more necessary to have a disciplined focus on innovation in order to continue being a leader, regardless of the industry.

Prior to joining RBC, Avi provided interim executive management services in sales, business operations, and acquisition strategy to technology companies in start-up and growth phases. He previously held the position of EVP, Professional Services for a TSX-listed technology company.

Avi is a graduate of the joint LLB-MBA program at York University's Osgoode Hall Law School and Schulich School of Business and is a member of the New York State Bar Association. Avi resides in Toronto, Canada with his wife and two sons.

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