CONVERSATIONS MUST DETERMINE OUR INNOVATION BUDGETS FLOUR I SH BY REBECA ROMERO RAINEY PRESIDENT AND CEO, ICBA Innovation is one of those line items that can be hard to wrap our heads around. There’s no formula or silver bullet to determine how much to spend, so we annually face that Goldilocks conundrum of determining what’s too little, what’s too much and what’s just right. Yet, when faced with that uncertainty, I’ve found that dialogue can be the answer. Conversations with our leadership teams, full staff and customers will spark ideas that can help us focus on our true needs and evaluate our priorities. Those discussions start with determining how we define return on investment (ROI). With innovation, ROI is about looking through the lens of overall impact, not just how it will affect us financially in the year ahead. Ultimately, budgeting for innovation requires us to reverse-engineer our thinking and consider the price of not acting. We can’t just look at the fees for the technology or the integration; we also need to evaluate the cost of maintaining the status quo. That will help make the innovation investment more concrete and guide our decision-making. We need to identify a particular pain point, evaluate what it currently costs us in terms of staff time, customer attrition or other relevant variables, consider what may shift in the future and evaluate both the short- and long-term impact. That analysis helps us gain the concrete awareness needed to make informed decisions. And sometimes not acting is the right choice. Not every solution is going to work for everybody, but thoughtful conversations result in a conscious, strategic decision versus one informed by a reaction to a product price tag. This dialogue is critical to creating an innovation-centric culture that is more about the process than the product. Brainstorming with our teams leads to valuable decision-making, and the ROI comes from the time we spend discussing and taking a proactive approach to problem-solving. Innovation is a journey, not a destination. It’s about enabling a mindset and culture that’s open to considering something different and continuing to shift with the needs of our customers and communities. As the financial services industry continues to evolve, we will increasingly face the challenge of balancing investment in innovation against budgetary constraints. Thoughtful discussions with our teams will shed light on the best approach for our individual banks. In these discussions, we will chart a course that’s right for our organizations, one investment at a time. 10 Community Banker
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