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Five Principles for Creating a Culture of Innovation

Ben Maxim, MSUFCU

We often associate “innovation” with paradigm-shifting breakthroughs that disrupt entire industries. But most of the time, innovation is incremental. Or as Ben Maxim, VP of Digital Strategy & Innovation at MSUFCU, puts it, innovation consists of changes made “day by day, making things just a little bit better.”

Ben joins our Remarkable Credit Union podcast to talk about talk about MSUFCU’s bold decision to build an innovation lab in 2020, their biggest victories and setbacks to date, and his five principles for success.

This month’s BIG question:

Why does innovation matter for credit unions, why is it so hard, and how can credit unions work to create a true culture of innovation?

 

 

Key takeaways

    1. Innovation requires both agility and forethought. You need to find a middle ground between taking too long to deliver and being too hasty.
    2. Buy-in from internal and external stakeholders is key. MSUFCU has created a member panel – a 500-person strong group that gets early access to ideas and gets to weigh in on them. They also work to build internal champions and make sure the employee base knows what they are piloting so they don’t confuse members.
    3. Their biggest success to date is building a video chatbot in five weeks with a rapid, agile team with clear metrics they were trying to improve in the middle of Covid. At first, 50% of people who piloted it thought it was helpful, which they were able to increase to almost 100 percent. They also created a new career path for call center employees as AI trainers.
    4. Many fintechs want to work with credit unions primarily. They are trying to disrupt “business as usual” in the banking sector because they see all the flaws, which is exactly how credit unions were created. A lot of fintechs are looking for their first customer and are willing to tailor their offering to your needs.
    5. Principles for building an innovation lab:
      • Create a culture of innovation: innovation is done day by day, making things just a little bit better
      • Get high-level support and buy-in, ideally from the CEO
      • Pick a problem you want to work on and find a partner
      • Dig into your existing member feedback to find the folks who will be excited to be part of your member panel
      • Have a plan for what happens when the innovation is done: move it to your normal product launch process, pivot to a different version, or kill it off

Read the full transcript:

Cameron Madill:
Hello, and welcome to the Remarkable Credit Union Podcast. We created our podcast to help credit union leaders think outside of the box about marketing, technology, and community impact. We bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual, and provide you with actionable takeaways that you can use to grow your membership, improve the financial health of your cooperative, and magnify the positive impact you have in your community.

Cameron Madill:
Today’s big question: why does innovation matter for credit unions, why is it so hard, and how can credit unions work to create a true culture of innovation? Today, I’m very excited to welcome Ben Maxim. Ben is Michigan State University FCU’s VP of digital strategy and innovation. He’s got an amazing range of things he’s done so far in his career, and that he’s going to do moving forward for MSUFCU. Among other things, he completed a program at Stanford University in innovation and entrepreneurship. And when I asked him about his hobbies, he’s said I have two small children and three small dogs. So that impresses me then with one small child and one dog, that’s about all I can handle. Thanks for joining us today.

Ben Maxim:
Yeah, no, absolutely. Yeah, no. It’s a handful here. So yeah, no, absolutely.

Cameron Madill:
Yeah. Five on two. Okay. So I’ve really been intrigued to learn more about this innovation lab you guys have built at MSUFCU, and I’d love to hear why did you start this and what was the problem you were trying to solve when you launched it?

Ben Maxim:
Absolutely. So I’ve been at MSUFCU for about 15 years. Been in digital in some capacity since I started. When I first started, our now CEO was vice president of eCommerce and hired me to be a developer working on our website, turning into, at the time innovative way to interact and engage with our members. So fast forward a few years later, we built our own online and mobile banking apps. So we created an iOS app from scratch, Android and our own online banking, using our core APIs to build all that and build a middleware layer to allow us to really be able to customize the experience and be responsive to our members. That was a good starting point. That was roughly 12 years ago at this point. And then we’ve added a number of cool features along the way that served our members.

Ben Maxim:
We created a shopping cart style account member opening application. That was a combination. We built our own member to member transaction process similar to PayPal or Venmo for our members, money could move instantly. And then we found out that my job kind of was required, was we created a chat member facing chatbot. We spent a year working with a startup. We thought it was going to be three months. We learned that we weren’t ready to work with startups or really take advantage of the speed that they could deliver. So we needed to refine some of our processes. So while we got it done in 10 months, still a lot longer than we thought it should have been. And as we grew out and had all our own digital channels that were maintaining, I grew to have a team of 40 people reporting to me.

Ben Maxim:
We had a little software shop in house: developers, a UX team, a QA team, and some other supporting roles. We really were just kind of making the things we already built work better and work for our ever growing membership. When I started training, we were really like 170,000 members, and now we’re over 320,000. So a lot of the time in between was just about we’re not getting new innovation, we’re not doing the organic innovation that we started with. So at the end of 2019, my first boss and now CEO for four years came and approached me and asked me if I’d be interested in helping to figure out what we should do with Fintech and stand up a formal innovation program, which I jumped at that chance. Moved in January 2020 into the role of VP digital strategy innovation, a Fintech strategy, and then also an innovation strategy, which really ultimately meant building an innovation culture.

Ben Maxim:
Because as I was rolling out the concepts that ended up becoming formalized as our innovation lab, very much talking about how, although I have innovation in my title and I’m a team of one, I can’t do innovation. It’s not just with me. I need the whole organization to be a part of it. Then COVID happened. That could have been a opportunity for us to say, okay, this isn’t the time. But we decided that it was also an opportunity to lean in, double down, and really push innovation to the forefront and help us work through the pandemic. So we did that, our first pilot that we did to kind of start getting people on board. And this was before we had any branding or formal innovation program stood up. We took a Fintech partner we had been looking at kind of casually for a couple years called POPi/o out of Utah.

Ben Maxim:
They had a video banking solution if you’re not familiar with them. And as the pandemics had us close our branches, we still wanted to engage with our members face to face. So ultimately we decided that was our first opportunity to show some real value to the organization. So we, from sign contract to first member video chat was five weeks including training everyone to be the agents that would’ve been 10 months plus. We learn things in that project. That our members didn’t care if we were fully integrated, didn’t care, that they had to download a separate app, click a separate link, that it was just kind of our logo on the technology. It wasn’t fully integrated into our custom built digital platforms and that kind of freed us to move a lot quicker in the future.

Ben Maxim:
So that helped get some more buy-in. And then we ended up creating some branding called The Lab at MSUFCU had to allow us to play with our kind of Fintech partners in a safe space, a risk mitigated way to let our members know that it’s not going to be pixel perfect. We need their feedback and they’re going to be partnering with us to kind of co-create these different products and services along the way.

Cameron Madill:
Ben, you use a phrase that I thought was interesting: a culture of innovation. And I feel like that’s sort of an easy, both culture and innovation are probably buzzwords that could probably mean a bunch of different things to a bunch of different people. How do you think of the term “culture of innovation” and how do you think of that maybe as opposed to a more normal business culture?

Ben Maxim:
So I think one of the things that often happens at companies is they end up with innovation theater, which has been kind of described, and that’s not my own term, but it’s really what I’ve been trying to avoid ever since I started. And that’s where you have an innovation lab, you go do innovation things and you have all the right pieces, but nothing ever comes of it. You don’t actually produce anything. You don’t deliver any value to the company or your customers, consumers, and our credit union case members or even employees. So it is just, oh yeah, we did innovation. You can check a box and there is a bunch of boxes being checked and you can have all this great PR, we have this innovation lab and we tried out these things, but you don’t actually do anything with them.

Ben Maxim:
You don’t put it in front of real members. It’s just kind of all theoretical. I think a lot of times too, and this gets to my explanation of what is innovation and why is it important a little bit, and the culture of innovation that I’m trying to create at the credit union and trying to support is making things a little bit better than they were yesterday. So we don’t have to invent Tesla SpaceX, Apple’s iPhone. You don’t have to create anything to that level. Sure if we could, great, wonderful. But a lot of companies spend years to get to that point and you don’t necessarily see the failed projects, the learning lessons that they had in those experiments. The iPhone was really set in motion in the nineties with some of the early handheld PDAs that Apple was creating and some of the other companies and they iterate on them.

Ben Maxim:
There’s a lot of process that we can do at the credit union, both process improvement, product improvement that really stem from how do you just make things one step better? And if you’re doing that consistently all over the place, that’s how you build that culture of innovation. So we have an innovation lab. We invite employees to come meet with me one day a week for roughly 20 weeks. They get some design thinking, training, lean startup, and agile methodology training. But it’s not heavy training in that, it’s exposure to the concepts. Here’s some activities you can do. The hope is that they take them back and they have been doing this. We’ve had about 40 employees go through the program so far. They take it back and then they do some of this in their little sphere of excellence. Maybe they’re improving something on their individual team or maybe across the whole department or division, depending what level or access they have or how supportive their leaders are. But really it’s about making things better. It’s not about having those revolutionary overnight successes. It’s about continuous improvement.

Cameron Madill:
I’m curious, you referenced this, that you launched in January 2020, like many things launched in January 2020. There was some surprises headed your way that you didn’t know about. At least I assume you didn’t, maybe you have kind of a Nostradamus ability to-

Ben Maxim:
Yeah. Not on this one at least.

Cameron Madill:
OK. I totally missed the fact that there was a global pandemic coming. I’m curious, what did you see as kind of maybe the opportunities and the challenges of that? Cause I know for us, I actually found it on some levels to be a really exciting time because I found that both internally and externally people were open to change in a way that was unusual. And then of course there were some really challenging things. So I’m just sort of curious, what did you see as the opportunities and challenges of launching your lab at that moment in history?

Ben Maxim:
Yeah, no, absolutely. So, I mean, one of the main advantages, opportunities was now everything was virtual. There were a lot more activity, connection to opportunities because you could meet with Zoom and other things. And that came with some cost as well. Some hindrance because we as a credit union had been, when I moved into that role in January 2020 I was offered one day a week to work from home to really focus on some of this research I was doing. And I was one of the first employees to have the opportunity to work from home. Fast forward a couple months, we had to figure out how to get roughly 80% of our staff to be able to be able to work from home, upgrade our networks, VPN capabilities, issue laptops when everyone in the world were buying laptops and were hard to even source them.

Ben Maxim:
So we were doing all kinds of things to make it so people could work from home and keep working, but that also freed us to include more people geographically, to get opportunities to work with companies that were maybe not able to pursue their expected path as well. And us being newer and starting to gain traction, and there was a lot of kind of digital networking events and kind of virtual speaking engagements that I was able to participate in to tell our story early on, that kind of helped attract some of the people that were looking to move and find co-creators. And some of those conversations started as, “Hey, I just want to get your feedback,” and come to find out there’s some great alignment there. And we were able to create some pilots out of them.

Ben Maxim:
But yeah, some of the biggest challenges too were the distraction that was happening. So that IT team that we also used to develop all our own stuff and kind of need to help build out some of these prototypes. They also had to figure out how to do a lot of things to support this new digital era that we’re entering. So digital had always been a focus for us as a university based credit union. People spread all out over the world. We have roughly 14% of our members living outside the state of Michigan, which is why our branches located in 30% total that live more than 30 miles from our branch. So a lot of those people are engaged this us digitally anyway. And to your initial point, so the capacity was not there necessarily to do some of this stuff. We mitigated that by trying to find some partners early on that wouldn’t require those resources.

Ben Maxim:
They had ready, built technology that we could then put in front of our members with minimal integration, which we did find in that first pilot was acceptable to our members and was not something that we should let slow us down anymore. So that kind of ended up being an opportunity for us to move faster. And we’ve kept kind of that when we have technology that’s already built, we can in a risk mitigated way, just kind of, if it’s already in the app store and exist, let’s just have members try it out and give us some feedback before we make any integrations. An initial point and thought on people being more open and supportive of digital transformation in that time, that was I think many people have different speeds that they’ve quoted, but moved 10 years and two months or whatever it is.

Ben Maxim:
We moved a lot of things that were on the nice-to-have list to complete in that time because there was finally the buy-in and people were willing to put the people resources and effort into. Sometimes begrudging because they had to, and other times because they saw the value in it. And especially as they saw the momentum and kind of the flywheel going that they wanted to do more and more. And that really helped as we showed the results from the lab specifically, before we called it the lab, they saw the value and they said, “Okay, well, yeah, that makes sense why we’re doing this,” and we didn’t pause or not do this innovation stuff. And then, “Okay, well I’ll help support you on the next one and I’ll help support you on the next one.” And that really kind of helped internally gain the momentum that we did. So it ended up probably being the best catalyst for moving quickly in what we were doing other than this kind of slow traditional business style rollout of this new program over a year or something to get all the right buy-in from all the different people.

Cameron Madill:
I definitely remember that era of like even the most traditionalist executive could no longer see say, “Well, you can never work from home. It’s not possible.” It’s like, well, yeah, basically the entire world just did. So one of the things I think is really cool about the lab is, and I think from the little bit I’ve already learned, it’s like thoughtfully way things that are often viewed as like binary, like either/or things. So move fast and break a bunch of stuff or take two years and only roll it out when it’s perfect, et cetera. Sort of, I guess when I heard a lot of it was build it in house versus like hire an outside firm. So one of the real, I think the coolest examples of that is how you involve your members. And so I’m curious, tell us a little about that process of how members involved in the lab. Why would a member give their time or choose to be part of this process? What do they gain from it and what do you guys gain from it?

Ben Maxim:
Absolutely. So one of the biggest things we want to do was engage our members. Before we had the lab available, we used to try different things and we would spend 10 months building it and then have this big rollout plan for members. And sometimes we took too long and we missed a market opportunity. They had other solutions. One person uses it on day one and then you’re like, “Well, why did we spend 10 months and all this money and everyone’s time building this thing when one or two members thought it was cool and everyone else didn’t?” A good example of that kind of a project, you could put your own kind of image on your credit card, debit card. So I have like a picture of my dog, one of my dogs on there that was cool, worked on that project. That was really popular when Capital One made it popular, then it took us kind of two, three years past when Capital One made it popular to make it happen.

Ben Maxim:
So very popular with our employees. We had a small set of members, but nowhere near the number that needed to kind of justify having all these specialized card printers and all, I think we had like 15 branches at the time. It didn’t make sense. There’s a lot of security can concerns with the tape and all this cause they would keep a piece of the number. So we missed the opportunity there, but we also didn’t involve our members in the process till the very end. So we didn’t get their feedback. We didn’t, maybe we would’ve killed the project a year or two in because there wasn’t going to be interest and it wasn’t economically viable. So what we’re doing in the lab and how we’re involving them is we’ve recruited kind of an ongoing member panel. We’re about 500 strong at the moment.

Ben Maxim:
So they’re available for us to email and say, “We have this next up list of 10 ideas that are,” it’s always changing and reshuffling the priority. And we’re surveying this group of 500 members kind of constantly like, “Hey, these are some of our ideas.” And sometimes we don’t tell them, “Hey, these are ideas.” We say, “Would you use your phone to pay for something?” Getting at maybe we should support Apple Pay, Samsung Pay, Android pay kind of a thing. Just an example. We’ve supported those for a while, but that’s the kind of stuff we’re getting at. We worked with a credit card security tool that was a dynamic CVV code that you get out of an app. And then the question is, are people going to be willing to go look at an app while they’re paying for something online? And we’re asking questions like, do you feel like you be more willing to use an MSUFCU card or a card that had this feature, and getting feedback that before we actually pursue it.

Ben Maxim:
So that way we know we’re approaching the right things at the right idea. That being said, you always have to be cautious that members aren’t always going to know what’s best and move forward thinking if they haven’t been exposed to it. So you do have to do some education explanation to this group as you’re asking them some ideas, and sometimes you just have to try some things that you know or you’ve seen in other industries working well and users and consumers are using something with Airbnb or Uber or something they use every day or Amazon or something and trying to apply that back. And then we get them involved then in the build process of our prototypes. So we pull together these lab teams. One of the first things they do is work with our research team at the credit union to develop some surveys to specifically ask, like after they do some of their design thinking thought work, they get their ideas in front of our members, that member panel.

Ben Maxim:
And then sometimes in that card product, we need to have a certain number of Visa card holders. And we really want them to be a part of it. So we may not have a thousand Visa card holders in that 500. So we then recruit and send out emails to specifically target and recruit some people for a pilot. So we bring them in, we ask them some questions, then we take that feedback back, use it to build a prototype, then send out the prototype to that same group. And then they get to be part of the early access group. So some of events they get early access, get to get feedback, help really design it in a way that they think is great for themselves and the rest of the membership. A lot of these members and the 500 that we’ve recruited over years are ones that have kind of organically and self-identified themselves as someone who’d be willing to give this feedback as we rolled out different things over the years.

Ben Maxim:
And we’re trying to now grow that out to be a little bit more and have some of these demographic segments that we need or different products that people have. So we’re able to really target it there. Yeah. That that’s kind of how we get them involved and we’re hoping to grow eventually in the future. We have an internal idea submission process that we’re using to experiment in an idea management platform behind it and working around certain challenges and say, “Hey, what are ideas around payments or lending or whatever?” We’d like to get to a point where we can grow that member panel to where they’re using something like that, to be able to submit their own ideas to us, and then we can kind of research them. So that’s where we’re going with it, but we’re kind of pulling together as we go along. And roughly we’ve had about 3000 members go through this process in some capacity and try out one of our different pilots.

Cameron Madill:
So, Ben, obviously, you’re an innovation walk [inaudible 00:16:06], if I may be so bold to call you an innovation walk [inaudible 00:16:08]. So I’m guessing you know the whole framework of crossing the chasm, right? One of the sort of classical like models that if something goes from a bright idea to the mainstream, you have these early adopters who are kind of willing to work for free just cause they love new technology. Then you get your, I think it’s your visionaries come next. Right? And they have really high demands, but they’re actually willing to pay money. And then you have this horrible chasm, which is what Silicon Valley spend all this time trying to figure out how to cross to get to the mainstream. And so I’m curious, what have you learned about, you sound like you’ve really got your early adopters from your credit union, the people who are passionate about making things better. Some as well as the reward, they’re member owners, the reward is making something better, playing with cutting edge technology and making something better that they’re passionate about.

Cameron Madill:
Is there anything you’ve learned about how to go from that to, cause I think that the balance I always think with credit unions is like, we hear a lot of these stories from our clients is you launch a new online banking platform and it’s light years better than this old archaic thing that was a 10 year contract or whatever. And then the only feedback they hear is, “Ah, why do I have to use my phone to log in?” And it’s like, “Well, that’s a really good thing, actually.” So what have you learned about that crossing the chasm?

Ben Maxim:
Yeah. No, that’s a great question. I’ve learned quite a bit, even from that early adopter group too. I really wanted to be this purest where like I wanted people who thought the intrinsic value of what they were doing, like they’re participating there. That’s who I wanted to be trying these things out that was highly limiting. We would’ve never got the 3000 members if I stuck to that plan. We would send out these emails and like maybe 10, I was sent to a thousand thinking like 500 people are going to want to do this cause we’ve targeted it more. And then like maybe 10, 50 from a thousand would come through and it’s like, “Oh.” So I was targeting a very small group. So I learned that maybe we needed to send out to 20, 30, 40,000 to get the thousand I need to be able to participate in something.

Ben Maxim:
We weren’t doing any marketing of pilots. We weren’t using any of our digital channels. It was like, you got this email, you knew about the lab, and that was it. That was the only way you could find us. And that didn’t get the traction that I was looking for early on. So I brought in and had now an assigned marketing specialist to market any of our pilots, like we would the product long term. So we’re also using that to experiment. Sometimes that means we’re incentivizing. So we try this out, make X number of card transactions, then we’ll put $50 in your account, and we haven’t done too many of those yet. We’re still trying to avoid, do we need to pay people to participate in some of these, but that’s on the table.

Ben Maxim:
That’s what we do with normal product rules out. And bridging that chasm, when it leaves the pilot stage we’re still getting a lot of those early adopters and any kind of that next category going to mainstream. So I have a counterpart at the credit union who’s our vice president of research and digital experience. So I’m taking things when they’re pilots and this, she fills in as a product owner on the pilot as we’re moving it through. So it’s ready to go. And she’s kind of has all this background before it moves into the mainstream deployment. The end of the pilot, kind of our deliverable, is this decision and recommendation. Do we green light? Do we keep piloting in another way, pivoting? Or do we say, “Hey, this didn’t work out. Let’s capture our learnings in case it works out in the future and document it.”

Ben Maxim:
But when we say green light, with a digital innovation pilot, we send it to her, and then she is already putting it into the same process that she’s using to roll out every other digital project that we’ve done. Using marketing in the way that we use to roll out different products and services, incentivizing that group to really just try it. If nothing else we’re putting it in front of them, multiple different ways. We send emails, we use social, we try to do some case studies sometimes, or testimonials from people who tried it. We try to leverage the fintech that we’re working with. They have great marketing resources and sometimes we’re able to move faster than we are and we use their kind of network. And sometimes we, they foot the bill for some of that incentivization as well. So, “Hey,” they’ll give us 500 bucks to spend.

Ben Maxim:
And the first we’ll draw a hundred, five people out of the hundred that tried it and you get a hundred bucks or something put into a certificate or whatever it is or whatever makes sense. So that’s some of the stuff we learned there, I think that’s the one thing that we’ve done well, and we’ve gotten compliments on. Or maybe, “Hey, do you guys have that kind of pairing?” If it’s a payments thing, our payments executive would be involved. So the C-suite level would be involved as the executive sponsor from the pilot beginning and then the product owner. So you have that champion to move it forward in the organization to get the buy-in. That also gives you the support from our normal process and marketing and social media promotion and all that. And then making sure the employees know how to talk about it with members and different things like that.

Ben Maxim:
So employees identify that this member they’re talking to on the phone in the call center would be a good fit for this product. They’re now able to sell that and cross sell it in that way as well, to help with that mainstream adoption. And so the other good piece that we learned along the way is you can’t just roll it out. Even in the pilot stage, people are going to call the call center and say, “Hey, I tried to use this thing and it didn’t work.” The call center employee doesn’t know what it is. And like oh, that’s… Early on we had a “Well, maybe that’s a phishing email. I don’t know about that. You should probably delete that.” I’m like, no, no, no, no, no, no, please don’t. More like we were using the branding from the fintech and they’re like, “Oh, that’s not an email I would know about.”

Ben Maxim:
So we really learned that there has to be an education to employees what we’re doing, or we have to target, this is the group that will support members in this. And then all employees need to know, “Hey, when you get these questions, immediately send them over to this team.” So we’ve learned how to change champions, and then also those people that are reporting to me in the lab to do the communication across the organization. So I’m reinforcing it at a leadership level. They’re reinforcing it at a team level and really making sure people are well prepared to answer any questions that come in on these, whether they’re in pilot stage and then hopefully because they’ve seen it before, by the time it gets out to members for full scale, they’re able to now support them even stronger.

Cameron Madill:
That’s a great process. It feels like, I don’t know if you’ve worked with bullying’s I3 [inaudible 00:21:28], but feels like you’ve basically built that innovation model that you built it in house, which I think allows that handoff to happen a lot more effectively.

Ben Maxim:
Yeah. So kind of ironically, I had done that without engaging with Felin [inaudible 00:21:38] and now I’m actually part of the wave 17 [inaudible 00:21:41] of the I3 group. So I was going, just started my second year. So yeah. When they were starting to go through their [inaudible 00:21:45] method, I was like, “Oh, I’m doing some of that stuff. That’s interesting.” Probably could have started with some of this and I had to figure it out on my own.

Cameron Madill:
Yeah. I used to work with and I mentored a couple teams too. It was just, it’s a really fun program and a great program. You’ll have, I’m sure as much teachers to learn. When it comes to innovation I always like to hear about successes and failures. Right? Cause as you sort of said, sometimes people are like the iPhone and it’s like, okay. But there were a lot of failures along the way, there were a lot of experiments. Or new Coke, like total bomb, what a bunch of idiots. So what’s your favorite success story and what’s your favorite failure story so far? And what did you learn from each of them?

Ben Maxim:
Biggest failure. We had this first homegrown idea that we built coming out of the lab was this concept of financial concierge. Had done some research. What is the next way to boost digital engagement? Where we going? Long term, we want this financial concierge to kind of be the path forward for personalization in fintech for our members where in this huge overarching strategy we have all these fintech we’re partnering with. There’s kind of like a marketplace. Think your app store and all the apps that you pick as a person of the millions available to put on your phone own because that’s what you engage with and that’s what makes sense to you. So we have a range of different fintech that this fintech serves 10,000 of our members and this one’s 30 and this one’s 80.

Ben Maxim:
And then they piece them together in combinations of, “Well, this one works for me. This one works for Cameron and this one works for Ben and these are the ones that we pull from.” The financial concierge would be the way to connect people to those fintech. And then also so we’re thinking things like Stitch Fix and some of those others where you like give some of your personalities. So we have all this great data on our members based on how they behave with their finances and their accounts. What do they want to do? What do they want to accomplish? What is their personality related to money? So are you a spender or a saver? Are you saving up for retirement? Are you looking to buy your first home? Are you just looking to go on vacation? What is it that you’re trying to accomplish?

Ben Maxim:
Do you need help with financial literacy? Different, different questions. We nailed, we got it down to like a 10 question questionnaire. And Dave was like merge that data with the data we have. And then the other side, here’s some recommendations for our credit union products and services and then here’s the fintech that you should have based on what your goals are. Ultimately, we wanted that to go into this kind of dashboard. So normally you log into online banking. There is this ledger style view. You see all your balances and then here’s all these menu items for actions that you can do in your account. What I wanted to do is now have an alternative view. You come into this dashboard or maybe more like a social wall newsfeed concept where you’re seeing these slices for them your different fintech apps. So let’s say it’s a budgeting app.

Ben Maxim:
Well, here’s your progress towards your budget. You have a hundred dollars left this month. Oh, red flag, let’s stop there. But you then click on that tile to go into whatever the app is that’s actually doing your budget. Or you are doing something where you’re paying off your student loans early, because you’re rounding up or you’re giving to charity because you’re rounding up. What’s your progress towards those goals. Those are all seen in these different UI [inaudible 00:24:25] slices. So that was the long, big vision for that. We started working with our internal teams to build that out and we didn’t necessarily get the right mix of people involved early on. We didn’t go through the full design process. We didn’t get our designers in early enough. We didn’t get our developers involved in the process early enough. And then we got there, but what was going to be finish it in one 20 week period of time of pilot ended up lagging on because we didn’t do some of the steps that we typically did.

Ben Maxim:
So a lot of learning lessons to the process and getting the right people and experts that normally build our product and service involved with the innovation teams earlier on. So there wasn’t all this work happening and then trying to be kind of implemented by this team, really getting everyone engaged at the beginning. So that was one of the biggest kind of lab failures at the beginning. So learning to involve the experts and getting more people involved and not trying to be too kind to them. And this was in the heavy COVID time that this around and be like, “Hey, if we’re going to actually move forward with this, we need all this involvement. And if we can’t get this involvement, maybe we actually do need to hold on this idea for a little bit longer to make it happen or find a partner.”

Ben Maxim:
So that was a 101. And then our biggest success led to a lot of great opportunities for our credit union here. The second pilot that we did after the POPi/o one was with a company called Boost.ai. We had a member facing chatbot called Fran that we worked with another company initially. We kind of got the chatbot up and running and it did what we needed to for day one, but we were struggling to make progress, but we were working through that project. And as we were working through that project, we weren’t really looking for a new chatbot vendor or anything like that. So Boost we did some networking during these virtual kind of conferences and events and a lot of Zoom meetings. And we came up with this concept that they suggested and recommended of doing.

Ben Maxim:
And again, we weren’t able to hire people. Our budgets were kind of frozen. And our volumes in our call center and chats were going through the roof like 80% month over month growth, and we weren’t able to hire people to field that. So we were trying to come up with ways to do it. So they suggested possibly taking our internal knowledge space, which was in SharePoint. A lot of documents were documents that you need to search through. And if they’re not tagged properly, you’re not going to find the information you need. And then when you can’t find the information you need, you’re calling over to this. If you’re in the call center, there’s a, like our trainers and senior call center people are staffing this kind of internal helpline. So you call over to them, you’re putting the member on hold.

Ben Maxim:
And one of these transactions we measured was about eight minutes in time. So that’s a lot of time for a member to be on hold and staff time and all that. So they proposed building out a chatbot with them for that use case. So we took our topmost access documents in SharePoint, put them into this chatbot and made them conversational. And then we invited 60 people from the call center e-services, which are live chat agents and then our branches to try it out, to see how it worked as they were serving members. And Boost had a platform that was really easy to learn. And they have a training process where people who have no knowledge of even technology can get in there and learn how to be AI trainers, which is kind of a cool career path from somebody who thought they were going to be a teller for the foreseeable future can now come over and work on this chatbot project.

Ben Maxim:
So that was a really cool opportunity to, for some employees to get that. And then also to support our employees that were serving our members in these high volume areas in COVID, we were surveying them week by week. And from week one, they’re saying, “Oh, this is like 50% helpful to my day to day.” And 50% helpful to kind of learning [inaudible 00:27:40] services long term. And then we explained to and communicate with them like the more you use it, the more we’re able to train it and make it more relevant to you. And from week one to week four, when we ended the pilot, those numbers of 50% went to almost a hundred percent in both of those categories of this is helpful to my day to day. So with that, we combined some ROI calculations that the eight minutes times employee time, then we figured out a chat, which was a very similar situation, was about five minutes.

Ben Maxim:
And we could automate about 2000 of those interactions each month by having this chatbot, because there are a lot of simple things. And we also made sure to be clear with employees, we’re not trying to replace them. We’re trying to actually help them do more with less. We’re not trying to take advantage of them or send them out the door eventually, that this is meant to be as a service for you. And then after we did some calculations that staff time savings that we were going to get out of it more than paid for the cost to implement this six figure chatbot a year. And we moved on to this project where we green lit it, we rolled it out, and we spent 10 more weeks building out the rest of the knowledge base, rolled it out in January of the next year.

Ben Maxim:
And then since it’s handled about 33,000 conversations that would’ve gone to those helped us. So [inaudible 00:28:44] right on that estimate of 2000 per month, and people are now using it in a way where they want it to be Siri or Alexa for the credit union. Like what’s Cameron’s phone extension so I can call him real quick? Or what are our hours in this day, or where is this branch, like beyond what we normally in a knowledge base. And then that led us to feel really comfortable with our platform. We were able to create two new positions at the credit union for AI content specialist, content manager. So similar to how you update a website, now these people are updating our chatbot with the same kind of information as like, we didn’t have this when COVID rolled out. Hey, here’s an easy way to add the COVID information that was changing day by day into our chatbot.

Ben Maxim:
So people are trying to chat us, “Hey, when are you open tomorrow?” And they’d be like, “This branch is open by appointment, and here’s how you schedule appointment.” And we moved our member facing chatbot [inaudible 00:29:26] platform and now we’re finally starting to realize some of the vision that my counterpart and I had for digital in the future where our chatbot is kind of the simple point of entry, just like your single point of entry into the internet right now. You go to google.com, you use the search bar. A lot of people use the search bar to type in google.com, even though it’s already built into the browser. Cause that’s where we all start with the internet. We want Fran to be that four year digital experience with us at the credit union. And from that pilot, we are now to the point almost two years later, where we’re realizing some of that initial strategy that we’re trying to enact.

Cameron Madill:
I love that. So I think this is my last main question, cause I told you I watched an interview you did on YouTube. You were wearing a suit and collared shirt then, not a Dunder Mifflin sweatshirt. But I’m also wearing a sweatshirt, so I can’t give you too hard of the time for that. So I love hearing more about how you kind of look at really big institutions and call it Amazon effect or whatever. Right? That we are all kind of, consumer expectations are getting set by these trillion dollar companies. And MSUFCU relative to Bank of America you can make probably the same comparison. You guys are a top 50 credit union to a 50 million credit union. The stuff you’re doing is amazing, but probably looks as far away they’re credit unions that don’t have 40 people on their total staff let alone their dev digital experience staff. So how would you recommend adapting this to a smaller credit union? And are there any kind of guiding principles that might help someone to do that in that space?

Ben Maxim:
Yeah, no, absolutely. So a lot of what I described isn’t because we’re a large credit union we are able to be successful here. It’s because we dedicated the time and resources to it. In some cases, some of the smaller institutions are able to move more nimbly. They’re not going to be able to do maybe five or six pilots a year, but maybe they can do one really well. Right sizing it to fit. A lot of fintech are looking for their first client. We specifically set aside a budget for pilots to be roughly about $20,000 per pilot. Some of them are greater. Some of them are smaller. Sometimes, like Boost came along and offered a free pilot because they were really trying to get into the market and get into credit unions. And we jumped to the chance to do a free pilot.

Ben Maxim:
And then of course they got our business. So it worked out for them. There are companies that are looking just to get in front of your members. So making the connections, attending different industry events, some good ones to attend are [inaudible 00:31:32] 2020, there’s a lot of future digital finance, future branches. We’ve mentioned [inaudible 00:31:36]. There are great resources as well. And there’s also members [inaudible 00:31:39] company. And then now from that Circle Collective, which are all kind of credit union think tank groups. I know there’s also the leagues in some of those others. I think what we can try to do as an industry is pool together. So maybe you don’t have the resources yourself or either risk is too great for one credit union to take on. So kind of a group of credit unions get together. I know we like to collaborate on a lot of different things.

Ben Maxim:
A lot of that’s talking about different processes or HR practices or governance and different things like that, but we can also do the same thing in innovation. Really having someone to champion it is important. If you can dedicate one person at least to make sure it happens. That’s how I started as a free agent purposely to work with all the different business units and giving them the support. So I report directly to our CEO. So giving them top level support is also important. So there needs to be the buy-in from the C-suite at some level. It doesn’t have to be the CEO, but someone with the power and authority to support this kind of in that formal authority, it’s important. But then also really helping the whole organization build this level of kind of continuous improvement innovation mindset. That really is helpful.

Ben Maxim:
One thing that we’re doing at our credit union to kind of help with this, we formed a Reseda group CUSO, creating union service organization, as a holding company to take some of these fintech that we’re partnering with in the lab and then move them to the point where we can help them scale and invest in them through Reseda. We’ve done about 10 investments that way.

Ben Maxim:
And then we’ve had a couple others that we’ve invested in and ended up making them subsidiaries of Reseda as well with the intention of helping keep fintech thinking of the credit union industry as a path forward. There’s 5,000 credit unions. There’s lots and lots of members. There’s lots of money that we’re trying to do and we’re able to move quicker. We want them to see credit unions as a path forward for their organizations. There’s a lot more mission alignment. A lot of them got into fintech because they’re trying to do similar things to credit unions. And if you go back a hundred years when many credit unions started or 50 years or whatever it is, a lot of those were built out of the need to deliver financial services in an innovative way that wasn’t happening in the banking industry.

Ben Maxim:
We were founded out of a desk drawer in Michigan State from some faculty that weren’t able to get loans during the Great Depression. That was a way to get people loans at a time they needed. That was a new way of doing things when the banks were saying, no, we don’t want people to have to think. As a fintech leader, they have to sell out to Bank of America or Wells to be successful. And there’s this great opportunity for them to grow organically with the credit union industry. So we’re trying to foster that with Reseda group. We’re looking for people to partner with. The more people we can partner, the more we’re able to do there. We’re also trying to support these industry groups that I mentioned as well. And the ones I mentioned were ones that we’re specifically supporting.

Ben Maxim:
And that’s why I mentioned those ones where there are a lot of others out there that are doing really great things to really help. So tap into a network. Sometimes you may just be observing and I’m happy to share it and chat and network with anyone that’s interested in starting their own lab and things like that. Some of the big tips, you got to focus on creating the culture of innovation, that mindset, making sure you have high level support in the organization. So you have that formal authority when maybe you need a little bit of push in the organization to make some things happen. If you can do it organically, great. But I think we all know that’s not always going to happen. There’s always going to be some people that are maybe the naysayers. So how do you work through that?

Ben Maxim:
And then pick something maybe you’re interested in, or you’ve identified a problem. Find a partner that’s looking, or you can either do it through an established partner. You could look at your current vendor relationships and see if they’re looking at trying out some new features, but really just creating that process. And you’re already getting feedback from your members in different channels, tap into that network, figure out how to funnel it into one area. So you can see it all at once and then take and start to maybe something will give you some good feedback, asking them if you’ll join this kind of focus group as well.

Cameron Madill:
I love that. So basically what I heard is building your culture of innovation, sort of understanding what it is and why it matters, high level support, picking a problem that you’re really excited to work on, and finding a partner and then building that member, what you call the member panel basically to guide you for. Love it.

Ben Maxim:
Yep. I’m going to give you one more that I missed just real quick. Make sure you have a plan after what to do with the innovation when it’s done. Don’t let it just die. Don’t just let be innovation in a board report and say, “Hey, we tried out this thing.” Make sure there’s a path forward and getting people change a agent that can help move it through past pilot is important as well.

Cameron Madill:
Yeah. I love the framing you have about having your counterpart that you can hand it off to, define a formal pivot or kill it off. But yeah, I agree. Those kind of the really, kind of vanity projects that are really cool and get everyone excited, but then they just sit on a shelf and it’s a big missed opportunity. All right, Ben, I can talk to you all day, but I know you and I both have a lot of other stuff to do. So I’m going to ask you some rapid fire questions so we can get down in the dark recesses of your personal life. So first of all, would you rather be able to travel back into the past or into the future?

Ben Maxim:
That’s a great question. And a hard one, I guess I’ve been a history buff most of my life. So I like to look at the past to inform the future. So yeah, I think I guess I’d rather see the past and maybe live firsthand some of the things that happened in the world.

Cameron Madill:
All right. I love would you rather be able to meet your great-great-grandfather or your future great-grandson

Ben Maxim:
I’ll go the other way with that one. I think it’d be very interesting cause I’ve at least been able to hear stories of like great-great-grandfather, but great-great-grandson who knows what’ll happen there. So it’ll be kind of really cool to see that.

Cameron Madill:
Would you rather cold showers every day or eat cold meals every day?

Ben Maxim:
I guess as a parent, I eat a lot of cold meals, so I guess that one’s happening already. So we’ll go with that.

Cameron Madill:
Yeah, we were talking about that. I’ve got some friends who are into the cold showers thing and I’m like, oh, oh no.

Ben Maxim:
Yeah, I need a nice warm shower.

Cameron Madill:
Would you rather have no sense of taste or be color blind?

Ben Maxim:
I guess I’m a visual person. So yeah. I wouldn’t want to be color blind. I do appreciate all the color. So yeah, I guess I would tough it out with the food.

Cameron Madill:
And that’ll go well with the cold meals you’re having. Right? So…

Ben Maxim:
Right, exactly. Yeah. If they’re cold, who cares what it tastes like.

Cameron Madill:
Awesome. Ben, thank you so much. You’ve got so much to share. I really appreciate your time. I’d love to just do a final take. Is there anything you want to reiterate that you talked about or anything you didn’t get to that you want to leave our audience with?

Ben Maxim:
Yeah, no, maybe just what I said earlier, innovation is about making things better day by day. It’s not about this revolutionary change, and that’s great when it gets there, but there’s a lot that goes into achieving that level of innovation that I don’t think we should necessarily try for. I think we should just incrementally improve day to day and maybe those big hits will happen for some of us along the way.

Cameron Madill:
All right. Sounds great. Well, Ben, best of luck with everything you’re doing really appreciate your time and hope you have a great 2022.

Ben Maxim:
Yeah. Thank you. Thanks for having me on.

Cameron Madill:
All right, folks. Thanks for joining us for another really great conversation. I really enjoyed chatting with Ben and learning more about his experiences. I’d love to share some of my key takeaways. My first key takeaway is it just seems like a lot of the work Ben has done has been dominated by this question of how do you find that middle path or the Goldilock solution where we don’t spend three years trying to build something and finding out that it’s really not wanted or valued by our members, and at the other extreme not sloppily rolling something out in a short amount of time that’s going to anger or frustrate your membership base by not being well thought out. And that’s kind of the crux of doing innovation really well. I really enjoyed hearing the kind of two people components as I think about it, that Ben broke down.

Cameron Madill:
First of all, knowing that they need to engage with their members early and often, but not the full membership base. And so this approach of building a member panel that they’ve got a 500 person strong group that gets early access to ideas, gets to weigh in on them, get feedback, and play around with them. And that, as Ben said, we’re all getting member feedback all the time. And so sort of looking where that feedback is coming in to find the folks who are really energized and have the bandwidth to give you that feedback. And then the second thing on the employee front of making sure that internal champions are being selected so that the overall employee base knows what you’re piloting. They don’t confuse members. They don’t tell a member who’s in a pilot that they’re in a phishing scam or something like that.

Cameron Madill:
And I also love that Ben said they do this internal education program or an employee gets spend 20 weeks with him for one day a week, learning more about innovation, best practices. So they can take that back, disseminate it throughout the organization. I think the biggest success kind of highlights the scale of the opportunity, building a video chatbot in five weeks with a really rapid agile team and seems like there’s a lot they did right. But especially having really clear metrics they were trying to improve, finding the right partner, and that collectively they were able to go from a 50% this was helpful rating, to almost a hundred percent. And that I loved as a bonus, that it created a new career path for some of the call center employees to be AI trainers.

Cameron Madill:
Ben’s point that many fintechs want to work with credit unions primarily. I think sometimes there can be a little bit of cynicism and I’m sure in some cases justified. But also that in many cases fintechs, this has been my experience, they’re trying to disrupt business as usual in the banking sector because they see it as being broken and flawed. And that’s exactly how credit unions came about. It was a broken banking system. It was at the heart of most credit unions getting formed back when they were originally founded. And then also I think the point that a lot of fintechs are looking for their first customer and really want to work with credit union. And so you can find them and be their first customer. They’re often really willing to tailor their offering to your needs. And then lastly, I love Ben’s five principles for building an innovation lab, creating a culture of innovation where innovation is known as something that’s done day by day, making things just a little bit better.

Cameron Madill:
Secondly, getting high level support and buy-in, ideally from your CEO. Third, picking a problem you want to work on and finding the right partner to help you make progress on it. Fourth, digging into your existing member feedback to find the folks who will be excited to be part of your member panel or testing group. And fifth, making sure you have a plan for what happens when the innovation is done. Which is to say either move it to your normal product launch process, pivot to a different version of that product, or kill it off. All right. Thank you so much for joining us today for another great episode. Until the next time, I wish you the best of luck in making your credit union remarkable.

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