Seeing Through a New Innovation Lens

Kurt Baumberger has joined Equifax as Enterprise Innovation Officer. In this new role, he will create new capabilities to empathize with our customers, rapidly convert ideas to working prototypes and instill a culture of disruptive innovation. He’s written several books with a focus on Design Thinking and Agile Development. I had the privilege to interview Kurt about his thoughts on innovation in data and analytics.

1. What does the word ‘innovation’ mean to you?

Innovation is something substantially and meaningfully new. It's a radically new idea, method or device. If you read any of those words and you put them through the corporate filter of what's characterized as innovation, I would be surprised if more than 1% of what's being called innovation is true innovation.

For example, I was at a customer conference listening to a panel on the future of the automotive industry. The moderator asked the panelists how they view the future of the automotive industry. Everyone gave a typical answer until they came to the Tesla panelist who said, "I don’t understand the question.” The moderator repeated the question. The Tesla panelist replied, “I still don’t understand the question because we aren’t in the automotive industry." The moderator then asked, "Okay, what do you do?" He said, "We make software on wheels."

Everybody stopped, turned, and stared at him because Tesla had completely re-imagined the industry. By creating software that’s updated every three to four months, your car no longer depreciates. Instead, your car appreciates because it gets new capabilities for enhanced battery life, updated mapping, and even new sonic capabilities to listen to music. Now that’s adopting an innovation mindset.

2. Tell us a little about Design Thinking and your approach?

Design Thinking is all about one thing: empathy. You have to be able to feel the pain that somebody else is experiencing.

Too often we feel our own pain, but we don't feel our customer's pain.

If you feel the customer’s pain, it means a couple of things. First, it means you're close enough to them that you can experience their pain. Secondly, they trust you enough to share their pain. Lastly, it shows you care. That's the foundation of any great relationship. Find somebody who's willing to be open, somebody who trusts you, and somebody who cares about you. Wouldn't you want to work with those kind of people? Doesn't it change a relationship from being transactional to being a deep partnership?

3. What is the future of innovation for the next five years? 

I think innovation will be imposed on our customers, unless they invest in creating the future. Consumers are going to dictate what, when and how they want to interact.

If customers don’t invest in innovation, they’ll likely find consumers' terms are hard to accept. That's not a situation anyone wants to be in.

In our industry, consumers are going to force a change in our customers’ mental models. For instance, there's already less of a need for retail bank locations. Right now, there's a lot of pain around applying for a mortgage. Why is it so hard? Why isn't there a standardized form like the common app for college that you can then submit to multiple lenders simultaneously who can then bid for your business? And I don’t mean a Lead Generation tool, but a real application. As consumers gain more control over their data like in California, India and the UK, consumers are going to demand the democratization of customer experiences.

If Amazon.com makes it easy to shop for any product, anywhere, anytime, then why is it so hard to get life insurance, car loans, payroll advances, and so on?

There's no reason for separate and distinct processes. Consumers are going to get fed up and say, “No!”

4. What trends are you seeing in the data and analytics world? 

On the data side, as profiles of people become more complete, there will be a huge opportunity for predictive analytics. Think about buying a home. We already understand who's most likely to buy a home. It's people who have their second child and live in urban centers. It's not that complicated. And who's most likely to sell their home? It's people who have their last kid go to college.

There are also opportunities to do more predictive modeling as we get more information from our workforce data. Who's most likely to buy a new car? Well, probably somebody who just got a new job. Can we look at the difference between their old job and what their pay is on their new job? Yes. If it's a significant delta, chances are they may want to treat themselves. Some of these things are self-evident. But how do we turn them into actionable analytics that marketers can use to create demand? Because in the end, as Peter Drucker said, "There are only two functions of business: marketing and innovation. Everything else is just a cost." What he meant was marketing creates demand. Innovation creates differentiated products people want to buy. Because there’s no margin in sameness.