BANK OF AMERICA

CASE STUDY ANALYSIS

INTRODUCTION
IInd Largest Bank 4500 Branches 21 States. Serves 20K households & 2M business. Majority of branches in high growth areas & moving from inorganic to organic growth. National operations Decentralized (Gave more power to regional branches). I&D model 20 Lab Bank Models. 200 Ideas generated in one year. 20 implemented. Result
Higher Customer Satisfaction & decrease in employee turnover. Increase in Revenue.

CURRENT SCENARIO
Proposal to add new branches which would increase the experiment capacity by 50%. Issues/Dilemmas faced by Brady & Butler :

Stand-Alone Branches v/s Real-World Branches ??

Accept the new proposal or Reject it ??

BANK OF AMERICAs NEW DEVELOPING SERVICE

Development process is an experiment in itself.

Refinements are made at every stage.

Not every idea/process is successful. But by modifying the failed idea/process a new successful idea/process is created.

I&DS PRODUCT & SERVICE INNOVATION PROCESS

MANAGEMENT, ORGANISATION & CULTURE

No formal infrastructure for developing new ideas.

Least priority was given to Innovation (Which changed to Highest Priority).

Created a new unit Innovation & Development (I&D) Team. Management is divided by customer, geography & product. Very much interested in Innovation approved 50% increase in branches for I&D team. Employee has freedom and authority and responsibility towards clients & customers. Collective responsibility for customer experience. Culture is driven by cost reduction & consolidation.

RELATING NEW SERVICE DEVELOPMENT WITH NEW PRODUCT DEVELOPMENT

BoA looked for innovation in all areas rather than specific areas.
For e.g. : WAMU innovated in services only. Fifth/Third Bank innovated on costs only.

Huge difference between innovation in service & product industry. Service Industry innovation requires less capital investment in R&D and less investment in Patents. However contrary to this Product industry innovation requires huge capital investment in terms of R&D and Patents. It is difficult to duplicate a product because of patents & license. Equally difficult to duplicate service Management, Organizational Structure, Culture etc.

ROLE OF EXPERIMENTATION & THE LEARNING

Experimentation - Important for all companies. Helps in creation of knowledge and improvement of products.

It also helps in knowing your customers better and hence satisfying the needs of the customer.
Every experimentation has core processes like idea generation, experiment design & plan, implementation & feedback for further improvement.

WAYs TO MAXIMIZE LEARNINGS

They can test the viability of products and services before they launch it.

By conducting suitable tests like test for fitness of selected concept in the market and also whether the idea is in line with the targets and objectives of the business.
Undertake proper evaluation on the viability of the products by formally testing the ideas and concepts regarding those products. Within all I&D branches the customers were monitored closely to see their reactions to the innovations by a variety of means like surveys or statistics on such factors as revenue growth or number of services used by each customer. Shorter turnaround time for feedback would hold experimenters learn and prepare modified experiments more rapidly. Can generate more learning by failures. But too many failures will not be accepted.

DECESION POINT:
YESSSS!!!! Butler & Brady should accept the proposal because:
Allows faster evaluation of ideas through running of more tests and allows less feedback time. More refined products. Results in quicker and successful national rollout of products. Faster repayment of Debts (Capital used for I&D Team). Different Geographic locations and different customer needs according to this locations can be studied.