Strategic innovation in the financial services industry: opportunity or threat?
Verweire, Kurt Van den Berghe, Lutgart
Verweire, Kurt
Van den Berghe, Lutgart
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Publication Type
Journal article
Editor
Supervisor
Publication Year
2008
Journal
Journal of Financial Transformation
Book
Publication Volume
23
Publication Issue
Publication Begin page
69
Publication End page
76
Publication NUmber of pages
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Abstract
Strategic innovation is a hot topic in management today,but there is a wide gap between the aspirations of executives to innovate and their ability to execute. Many try, but few succeed! Why does strategic innovation pose so many challenges for incumbent firms? And how can established firms cope with these challenges? This paper addresses these questions as it explores what strategic innovation is and how it differs from the product and service innovation literature. It then describes the major challenges associated with strategic innovation and outlines how two established financial institutions, ING and Fortis, have coped with these challenges. Our conclusion is that strategic innovation requires a strategic commitment and the adoption of particular management processes and systems to create, nurture, and develop new businesses. Managers should be aware of the threats and opportunities associated with strategic innovation before they ask the organization to engage in ‘innovation.’