Stefan Thomke
9-603-022
REV: OCTOBER 28, 2002
STEFAN THOMKE
Bank of America (A)
The banking industry is ripe for innovation. We need to grow through value creation and excellent service that is appreciated by customers as opposed to price alone. — Milton Jones, president, Georgia Banking Group “I wonder if we’re being ‘overrewarded’!” exclaimed Warren Butler to Amy Brady, the executive responsible for Bank of America’s Innovation & Development (I&D) Team in Atlanta, Georgia. As an executive in the consumer bank’s quality and productivity group, Butler led innovation and process change in Brady’s group, which was responsible for testing new product and service concepts for the th bank’s branches. In the company’s elegant 55 floor conference room on a day in May 2002, the two prepared for a team meeting on an important strategic decision that would affect how experimentation would be done in the I&D Market. Seeds of change were in the air at Bank of America. Indeed, earlier in the day, Butler had escorted an astonished visitor, a European banking executive, on a tour of some two dozen real-life “laboratories” in Atlanta. Each was a fully operating banking branch, yet in every location new product and service concepts were being tested continuously. Experiments included “virtual tellers,” video monitors displaying financial and investment news, computer stations uploading images of personal checks, and “hosting stations.” (See Exhibit 1 for a selection of experiments carried out in a single branch.) Currently, the I&D team had 25 bank branches in Atlanta in its experimentation portfolio. Senior management, however, had now offered them additional branches across the country that could expand experimentation capacity by nearly 50%. This offer appeared a vindication of the I&D Market project, which had been launched as an experiment itself only two years earlier. This reward posed some tough questions. Would increasing the size of its innovation laboratories aid or inhibit
REV: OCTOBER 28, 2002
STEFAN THOMKE
Bank of America (A)
The banking industry is ripe for innovation. We need to grow through value creation and excellent service that is appreciated by customers as opposed to price alone. — Milton Jones, president, Georgia Banking Group “I wonder if we’re being ‘overrewarded’!” exclaimed Warren Butler to Amy Brady, the executive responsible for Bank of America’s Innovation & Development (I&D) Team in Atlanta, Georgia. As an executive in the consumer bank’s quality and productivity group, Butler led innovation and process change in Brady’s group, which was responsible for testing new product and service concepts for the th bank’s branches. In the company’s elegant 55 floor conference room on a day in May 2002, the two prepared for a team meeting on an important strategic decision that would affect how experimentation would be done in the I&D Market. Seeds of change were in the air at Bank of America. Indeed, earlier in the day, Butler had escorted an astonished visitor, a European banking executive, on a tour of some two dozen real-life “laboratories” in Atlanta. Each was a fully operating banking branch, yet in every location new product and service concepts were being tested continuously. Experiments included “virtual tellers,” video monitors displaying financial and investment news, computer stations uploading images of personal checks, and “hosting stations.” (See Exhibit 1 for a selection of experiments carried out in a single branch.) Currently, the I&D team had 25 bank branches in Atlanta in its experimentation portfolio. Senior management, however, had now offered them additional branches across the country that could expand experimentation capacity by nearly 50%. This offer appeared a vindication of the I&D Market project, which had been launched as an experiment itself only two years earlier. This reward posed some tough questions. Would increasing the size of its innovation laboratories aid or inhibit