In the second of two posts, the Lab’s Executive Director, Anna Laycock, explains the thinking behind our Fellowship programme.
Building a financial business that breaks out of the status quo is hard, lonely, complex and often inaccessible. We’ve learnt from our work with innovators over the years and built a programme which we believe will give them the best chance of success. Here’s how we’ve tackled the challenges:
It’s really hard.
This is an extreme case of stating the obvious, but bear with me. Financial start-ups can’t be built, tested and launched in the same way as, say, a new computer game. Many incubators are based on this model – hothousing start-ups for a period of weeks and then releasing them into the world – but we don’t think it’s the most effective way to support our Fellows.
The innovators who we work with are navigating their way through a highly complex system with powerful actors and structures that don’t recognise their role. We bring our Fellows together monthly, supporting them throughout this process and helping them to adapt their strategies as they encounter new barriers. Business skills teaching comes from experienced entrepreneurs and business leaders, rooting strategic models in the reality of the financial system.
We select our Fellows because their ideas have the potential to transform the system – but by their nature, this means our Fellows are outliers. They will often be told their idea just isn’t possible, or that they should lower their sights. It’s like trying to stay standing in a powerful river when everyone else is just going with the flow. Leadership in this context requires not just passionate belief in an idea but huge amounts of personal resilience.
One of the most important things we can give our Fellows is a community of peers who will support them long after the programme is finished, so peer coaching and action learning are key elements of the programme. We also use our regular events to introduce Fellows to Lab supporters across and beyond the financial system, building the contacts they’ll need to help them along their journey.
There’s an important distinction between simple, complicated and complex challenges*. Simple challenges are like baking a cake: the recipe specifies the ingredients and the method, and if you follow the recipe accurately you’ll get the same results every time. Complicated challenges are like building a space rocket: a much higher level of expertise is needed and the ‘recipe’ involves complex formulae, but if you launch one space rocket effectively, your likelihood of being able to do the same again is increased. Complex problems are like raising children: there’s no correct ‘recipe’ and relationships are just as important as expertise. Raising one child successfully gives you no assurance of success with another one – every child is unique.
Building a disruptive financial business is in the latter category. That’s why we focus on building the ability of Fellows, as leaders, to understand and respond to the challenges they face, staying resilient in the face of multiple setbacks, and managing the energy of their team through the ups and downs. Our two-day residential leadership retreat is a key element in this process, taking our Fellows outside of their everyday context and creating space to reflect on their strengths and vulnerabilities as leaders.
*This distinction is drawn by Michael Quinn Patton, an evaluation expert. I highly recommend his co-authored book Getting to Maybe: How the World is Changed for anyone interested in complexity and social change.
Traditional incubation models are full-time, meaning that participants may need to have the financial security to be able to work unpaid for months on end. This excludes anyone who doesn’t have the resources to take that risk, leading to a reinforcement of existing power structures in finance. Democratising finance means working for a system where the people in power reflect the communities they serve. So we run our sessions monthly, make no charge for start-ups, and don’t require participants to be working on their ideas full-time. This means they can continue in paid employment if they need to.
Growing a financial business is often inaccessible in another way. No matter how strong the idea and how effective the leader, there may be structural barriers within the system that block progress. These could be anything from inappropriate regulation, or a lack of regulation, to the behaviour of incumbents, or access to key market infrastructure (such payments systems). Throughout the Fellowship programme we’ll be looking for these barriers and, where appropriate, we’ll bring together the right people to tackle the problem.
Access to finance is also a key issue for innovators, but we don’t yet have a solution for it – yet. We’re working on plans for a fund to accompany the programme, so that our Fellows are able to access grants, investment or a mixture of the two. Please get in touch if you can help us do this.
We’ve built this programme on our seven years’ experience of working with innovators, but we know we won’t have got every element 100% right.
Thankfully, having monthly sessions means we can evaluate each session and adapt our work along the way. Real-time evaluation is also important because we can’t predict with certainty the results of the programme – since Fellowship itself is an intervention in a complex, unpredictable system. It’s also a process of learning about as-yet undiscovered barriers to systems change and adapting our advocacy work to address these.
Our first step in that learning process is to find the people and ideas with the most potential to change our financial system. If you have an idea for building a better way to do finance, we want to hear from you.