Venture Adventure

A talk with Toby Norton-Smith, managing director of innovation lab X15 Ventures at Commonwealth Bank of Australia.

Global Finance: What is X15 Ventures? What’s your role?

Toby Norton-Smith: As the leading technology bank in Australia, we’re always looking for ways to innovate. That’s why we launched X15 Ventures in February 2020: a venture-building model with the mission of building the next generation of solutions for our 15 million customers by unlocking new value from CommBank’s assets through partnership with the tech and innovation community.

Concretely, my role as the managing director of X15 Ventures is to develop a healthy pipeline of scalable customer-facing innovation opportunities. This can be done through build, proof-of-concept to scale, buy or partner. We focus on two broad types of businesses. The first are natural extensions, or adjacencies, of banking data, products, and services—like helping small-business owners improve the way they manage their business by providing them with world-class AI capability and analytics. The second are potential disruptors, such as ventures that reimagine banking and provide opportunities to deliver financial services to our customers in new and different ways.

GF: What are the features of a successful innovation plan?

Norton-Smith: Corporate venturing is challenging and requires an approach different from the way a bank typically operates. Although we are very firmly focused on commercial outcomes and delivering new valuable services to customers, an essential part of our plan is to build the underpinning enablers to ensure that the right opportunities emerge and the right ventures evolve, such as complete rewiring of end-to-end approval processes, defining fit-for-purpose governance to reduce any corporate blockers at early stages, ring-fencing dedicated funding sources, and rethinking talent and incentives models.

Innovation for corporates is a must, not an option. Businesses need to answer to constantly moving customer needs and expectations. To ensure clear internal ownership of the different horizons of your innovation portfolio is critical, from short-term incremental innovation to longer-term transformative innovation.

We are extremely privileged at CommBank to have a rich pool of internal talent, from customer specialists who have an in-depth understanding of our customers’ pain-points to engineers to developers who have worked extensively on developing our world-class digital assets. However, internal diversity of thought is not sufficient. You also want to make sure that you create a healthy tension by including external talent, such as seasoned entrepreneurs. In order to do that, you need to be mindful of implementing fit-for-purpose incentive structures that suit these profiles.

GF: What metrics should be used to evaluate an innovation team?

Norton-Smith: When I think about what success looks like for X15 Ventures, I believe we should be assessed on our ability to rapidly bring market ventures that delight our customers by solving their most pressing needs through new innovative propositions. If we do a good job at it, that should translate into measurable customer uptake and viable business models.

GF: What advice would you give a newly minted head of innovation?

Norton-Smith: I would start by deeply engaging the key internal clients to ensure a shared understanding of where the organization is regarding innovation maturity, and then get practical endorsement for the future state. Take your stakeholders along the journey and speak their language—be commercial, and focus on near-term wins. Keep in mind that you’re not centralizing innovation, you are the vehicle that enables innovation and helps it to be more efficient and effective.