Navigating Innovation: Lessons from the Frontlines of Startup Collaboration

This article was written by Ben Maxim, Chief Digital Strategy & Innovation Officer at MSU Federal Credit Union, a 20Fathoms Community Partner.

In the ever-evolving landscape of financial services, partnerships between credit unions and financial technology (fintech) companies are proving to be key drivers for success. This paradigm is not unique to credit unions, as innovative technology solutions are becoming increasingly sought after across most industries. As we all look to lead our respective organizations into the future, we find ourselves turning to the term ‘innovation’ to guide us, but what does that really mean? At MSU Federal Credit Union (MSUFCU) we define it simply as making things a little bit better today than they were yesterday. As a result, innovation can happen anywhere within our organization. All too often, I hear from credit union leaders that they are struggling to get support for their innovation initiatives, and this comes in many forms ranging from difficulty gaining executive or board support, siloed departments, competing priorities, and more. MSUFCU has worked through many of these hurdles over the years, and by overcoming them we have been able to launch new innovative products and services.

Our innovation center, The Lab at MSUFCU, was created in 2020 to turn ideas into new solutions for the benefit of our members, employees, and the credit union industry. The innovative fintech solutions developed with The Lab, support our members in reaching their financial goals, whether it’s preventing fraud, improving financial wellness, or reducing student debt. Since The Lab’s inception, MSUFCU has engaged in 40 fintech partner pilots, with 23 successfully completed, and 15 of those subsequently greenlit to full implementation as projects or enhancements. These startup partnerships propel the Credit Union forward in delivering superior service, offering personalized experiences and engagement opportunities, and meeting the increasing digital demands of today’s members.

At MSUFCU, innovation is ingrained in our company culture and something we strive to build into every aspect of how we work. Yet, achieving this required us to first cultivate a culture of innovation within our organization, all while maintaining our focus on the essential day-to-day operations that keep our business running smoothly.

One day while reading “Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries” by Safi Bahcall, I came across the concept of ‘artists and soldiers.’ Bahcall explains that a successful company maintains a balance between these two groups: the ‘artists’ who innovate and create new products, services, and experiences, and the ‘soldiers’ who uphold the core business, its traditions, and steady progress. Without this balance, a company risks stagnation or collapse. For instance, solely focusing on the core business without innovation can lead to obsolescence like Blockbuster and Blackberry, while solely pursuing ‘loonshots’ can lead to risky endeavors like the Zune. The key is a symbiotic relationship where the core business funds innovation, which in turn rejuvenates the core business.

My realization came when I noticed that at our organization, not all employees are comfortable with innovation. Some thrive in stability and structure rather than chaos. Recognizing this, we realigned resources in multiple departments, dedicating specific individuals to innovation projects based on their aptitude and willingness to embrace change. By separating ‘artists’ and ‘soldiers,’ as Bahcall suggests, and valuing both equally, we streamlined our innovation process. Our first complex project, previously prone to delays, was completed in just 88 days under this new model. Moreover, soldiers can innovate by improving processes for efficiency, contributing to the organization’s growth.

Successful companies not only innovate but also nurture their core business to sustain growth and support innovation. Leaders play a crucial role in bridging the gap between ‘artists’ and ‘soldiers,’ ensuring each understands their importance in the bigger picture. Balancing these two groups fosters sustained success and guides the organization into the future.

Investing in innovation is essential for any company, regardless of its size or industry. Whether you’re building innovation into your company culture, starting your own innovation lab, adopting new technologies, or curating solutions to support your users, there are strategies that can help you succeed. If you’re aiming to strengthen your connection with customers and elevate your brand, consider starting with these tips:

To learn more about The Lab, our ongoing pilot programs, and to engage with MSUFCU’s team about how innovation can support your business, visit msufcu.org/thelab.