When it comes to innovation, think small


It’s not every day that a sweaty shoe makes me think.

Yesterday when my wife kicked off her ASICS workout shoes, I noticed this line on the removable insole: “Be better than yesterday.”

That, I realized, says it. Especially with FinovateFall happening during the next two days.

The financial services industry is obsessed with innovation. Rightly so, for we cannot let the competition outstrip us. But when we limit innovation to mean the next big shiny new toy, we have a forest-for-the-trees thing going on.


Shiny new toys that take the world by storm are rare. Smaller, “better than yesterday” changes are far more common, and they are no less able to take the world by storm.

For a low-tech example, consider a mid 1980s innovation. There was nothing shiny or even new about a bottleneck with a twist-off cap. But placing it atop a one-quart container of motor oil was new. This tiny change overhauled the industry. It made the round oilcan obsolete and grew the home oil-change market by making the product easier to handle.

For a high-tech example, observe the people lined up outside your nearest Apple Store, waiting to hand over a substantial wad of cash for the just-released iPhone 6. Let’s be honest. The 6 is shiny, but it’s hardly new. It’s pretty much a 5 with added doodads. And the 5 was pretty much an elongated 4 with added doodads. Purists will no doubt revile me for trivializing, but come on. Even today, the 4 meets the basic need. Die-hards who haven’t upgraded miss out on little in the way of functionality. Apple, it seems, is the master of effecting big change by thinking small.

For another high-tech example, consider movies sold for home viewing. My wife and I are blessed with two lovely daughters who make us suffer when they’re bored on long trips. In their defense, I should point out that they keep up the whining only 99 percent of the time. So, even though we own a bunch of kids’ movies on DVD, we paid for the same movies over again so the kids can watch them on their tablets and my wife and I can ride a few miles in peace. In order to sell us the same movies twice, no studio had to invent a device or secure new distribution rights. All they needed was a modest advance in distribution.

That, too, is the power of thinking small.

The lesson for bankers is, sure, keep a sharp eye for the next shiny new toy, but don’t overlook “better than yesterday.” A modest innovation might be under your nose right now, and it might just change the world.

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