Thinking | Articles

The Sun, the Bank, and the Two-Sided Problem


Mark Payne

President, Founder | Partner

Farenheit 212

This is the first in a series originally published October 8, 2014 on Innovation Excellence.
In many ways, we’re living in a golden age of innovation. More brilliant minds, more money, more dazzling technologies, and more theories are being hurled at innovation than ever before. Innovation is seen as the solution to the challenge of growing revenue. But what it’s not doing as often as it should is put profitable outcomes in the hands of the people bankrolling these exciting explorations. Most reports peg the odds of a project coming up empty at north of 90%. In other words, nine innovation projects out of ten never deliver an idea to market.

For innovators on the front lines, the past explanations we all hear for low success rates, like ‘hey, innovation’s hard’ and ‘failure is normal’, aren’t helpful and ring hollow. What we’ve learned through years of trial and error found was that low success rates aren’t actually due to the nature of innovation, but the nature of innovation methods – the way today’s prevailing orthodoxies tell innovators to think and work.

The series of pieces beginning with this one will lay out the principles behind what’s proven, for us at Fahrenheit 212 at least, to be a more effective way to think and work, in search of big ideas that come to fruition – an approach we call Money Magic.


It was a day of stark contrasts.

A team from Fahrenheit 212 has spent the afternoon pounding the pavement in the 118-degree heat of the Dubai streets, squinting through the dust and their own rolling sweat, looking for clues and insights to ignite a revolution in the way banks grow their businesses.

Flown into Dubai at the invitation of a big private bank in the United Arab Emirates, we’ve been asked to help them build innovations that get their existing consumers to buy more broadly into the range of products the banks offers. If the average customer today has two products, say a mortgage and a credit card, we’re after innovations that compel customers to add a third or fourth. The financial impact of making that happen is easy to model, and sexy to look at. The question is how to get there?

Around the world, banks drive customers across their product portfolio through a combination of opportunistic selling by customer service reps when they spot a client need, and rate-driven promotions. But in the Emirates, these tools hadn’t delivered as much as they do in other countries. They were inadequate to overcome a cultural distrust of banks that left Emirati customers actively trying to spread their assets around, rather than consolidate under one roof. Fighting something this fundamental would require a bona fide breakthrough.


The work of the team on that hot Dubai afternoon and over the weeks ahead is a two-track effort yo-yoing back and forth between customers and bankers, hunting for insights around which game-changing innovations would be constructed. What becomes apparent is that successfully solving the adoption problem will require cracking not one problem, but two: the consumer problem and the business problem. As is so often the case, these two problems have remarkably little to do with each other, other than one huge thing: neither problem can be solved without also solving the other.


For every hour our team would spend observing and interviewing bank customers, trying to decode the motivations, tensions, and rhythms of life that were influencing their financial behavior, we would spend another equally intensive hour probing the inner workings, strategies, behaviors, attitudes, and systems in play within the bank itself.

On the consumer track, the findings that leap out are fascinating. The desire to build better lives for our families is a fundamental human drive that transcends geographies and social strata, but here in Dubai we’re picking up important nuances. In most parts of the world, ask consumers about money and they jump to talking about the future. But here consumers talk about the past, present and future as if they are inseparable parts of a continuum. Financial well-being is a progression, spanning generations of a family, the aggregated effect of small decisions and big ones, and all the connections between them. Working in from this macro view, we begin to examine how these customers have chosen the array of financial products they have. They see their financial picture in terms of multiple decisions over time, but describe each individual decision about a financial product as an isolated event. They’re thinking one way, but acting another. We have to figure out why.


Consumers may think of financial products as pieces of a bigger whole, but they don’t acquire them that way for one big reason: the banks themselves tend to treat each product in isolation. They’ve conditioned customers to look for rate offers, rather than take a deeper view of their bank relationships. There is no meaningful connective tissue between bank products.

But one more nagging inconsistency has us scratching our heads. If customer decisions were one-offs, and rate offers played such a big part, why were these consumers relatively unresponsive to the offers from the bank they already did business with? Eventually, the biggest barrier to product adoption comes into view. Bank customers in the Emirates are afraid of getting too vested in any one bank, as they think it would leave them exposed to increased risks, either by the bank falling on hard times, or changing the rules in a way that compromised their interests. Spreading their money among multiple banks, even in mundane products like checking and savings accounts, was a form of self-protection.

The implication is that regardless of how well conceived the bank’s products and cross-selling efforts may be, many of our bank’s customers would actually prefer to get their next financial product from another bank. The reasons for avoiding consolidation of their finances in a single bank may seem irrational to those in finance, but are emotionally sound to bank customers. Getting their next mortgage or loan or credit card from a bank they already did business with was not.

Conventional innovation orthodoxy — user-centered design or design thinking –would say that this level of clarity around the consumer problem is the only essential input to igniting the innovation process. But we treat it as just half of the problem. The parallel work of getting to a comparable level of understanding of the business problem is still under way. Halfway across Dubai, our Money team is deeply immersed in the bank’s commercial and operational realities.

We drill into everything from the profit-and-loss statements to the performance of individual business units, the inner workings of the bank’s IT systems, to daily routines of customer service reps on the floor. What we find is endemic in the way banks around the world operate — ample lip service paid to cross-divisional collaboration to serve customers, but nothing about the way the bank actually operates has been designed to create synergy or collective impact across the various product groups. The separate divisions responsible for selling mortgages, credits cards, car loans, etc. are almost worlds unto themselves. Executive incentives are tied to the financial performance of their individual business units rather than the bank as a whole. There’s no structural mechanism for turning a customer of one division, say a young couple who just signed their first mortgage, into a prospect for another division.

Reps on the branch floor, meanwhile, who often pick up anecdotal clues that point to cross-selling opportunities, had no real tools beyond their own instincts and separate rate sheets for each type of product.

Even the IT system was built in a Lego-esque way with separate software supporting each product, and no real ability for product metrics to interact. These barriers have to be overcome to answer the innovation challenges of increasing products per customer.

Taking it all in, project front man Pete Maulik shares a confession with the rest of the team. “To be honest, I thought the consumer side of this equation would be tougher one on this project. But the internal realities may be the real game breakers. Whatever the innovation may be or do for customers, we need to start thinking now about to break down all these organizational barriers, or in the end nothing will happen.”


To be successful, the innovation we’re out to create has to thread its way though two needles at once. It has to transcend consumer resistance with a value proposition that makes consolidating assets under one roof both rationally and emotionally attractive. And it also has to thread a second needle, carving its way through the IT system issues, the siloed P&L structure of the different business units, the executive incentives, and the realities of the bank rep on the floor.

User-centered design approaches urge us to fixate soley on the needs of the consumer until very deep in the journey. There’s a problem with that. Looking only at that first needle, you can come at it from almost any angle and get through the loop. But then it’s left to blind luck as to whether the angle you took to get through the first needle will land you anywhere near the second loop. This is why conventional user-centered methodologies often seem like a random game of hit-and-miss.


Back in Dubai, the answer to this two-sided problem of how to get consumers to see value in getting multiple products from one bank, and how to create a new mechanism for cross-divisional collaboration across a siloed bank structure came together piece by piece. The solution was not a new product, but a new system called Mosaic that delivered transformational benefits to both consumers and the bank. Mosaic gave consumers a new rational basis for getting their next product from our bank, in a very unexpected way: adding a new product from the bank’s line up would instantly improve the terms on any and all the products that consumer already had with us. Adding a new checking account for instance would instantly improve the terms on the car loan they’ve had for five years, dropping it to a more attractive net rate. Or it would make the fees they pay each payday to wire money back to their families overseas suddenly disappear. Or the rewards program would start accumulating rewards faster. A customer walking into the branch with, say, a car loan and a checking account, looking for a new credit card to manage monthly cash flow, would suddenly see an amazing reason to get that card from our client rather than another bank.


The customer-facing piece of the Mosaic system was a tablet based tool we created (which preceded the iPad launch) that let a bank rep sitting with a customer pull up the customer’s existing product mix, and with a few taps of a finger show the impact adding a new product would have on the terms of the existing products. A visually stunning interface and UX based on the mosaic metaphor invited play and exploration. Fascinated customers instinctively asked what would happen if they added two more products, or three. In just a few taps, they got their answer.


The Mosaic design theme that gave resonance to the user experience was equally meaningful as a cultural metaphor among bank executives. The good intentions each division had toward supporting the growth of the rest of the bank suddenly had an active conduit. Each division knew they had to give something up (a small slice of the revenue on the products a customer already had) to get something (new customer acquisitions from other divisions’ customer pools), so a new executive incentive scheme was put in place to reflect the win-win culture. The mosaic theme’s second meaning took hold – the individual pieces of the bank coming together a more powerful whole.

Within a year of going live with Mosaic, the bank exceeded its aggressive product adoption goals. Revenue targets were exceeded by 35 percent. And an organization encumbered by disconnected ways of working had a powerful mechanism for making the whole worth more than the sum of the parts.


What made Mosaic possible was not just the cleverness of the solution, but the philosophy and approach behind it – coming at an innovation challenge as a two-sided problem. The problems of the consumer and the business were completely different, but the innovation had to solve them both. Neither could be solved without also solving the other.

For all the great things that the design thinking movement has brought to modern innovation—bringing overdue recognition to the importance of creative thinking, uncovering latent consumer needs, and iterating down the path to success—it has a structural flaw. And that that flaw is a root cause of the unacceptably high failure rates permeating modern innovation practice: a baked-in assumption that if you solve for the needs of the consumer, the needs of the business will eventually sort themselves out.

It’s a bit like trying to hit a golf ball with one eye closed. The depth perception isn’t there. What seems like a perfect swing or line of attack when viewed through just one eye is often well off the mark. Realizing that there are two separate sets of needs to solve for is the first step to turning the corner. With both eyes open, pure contact becomes far more likely.



About the author:

Mark Payne

As co-founder and president of the leading innovation consultancy Fahrenheit 212, Mark Payne has spearheaded innovation projects that have created over $3 billion in revenue for Fortune 500 companies, entrepreneurial emerging businesses, and private equity firms. As the architect of the firm’s Money + Magic philosophy, its outcome-based business model and its breakthrough Two-Sided Innovation […]

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