June 13

Krishna Thacker / Jaspreet Singh

Internalizing Innovation: It’s About Creating a Culture, Not a Product

Everybody talks about innovation, and there’s general agreement that it’s good and necessary—but what does the term really mean? One way to think about it is that, unlike invention (which creates something completely new), innovation is about making new or better use of existing tools. In fact, one of the hallmarks of the best innovations is the way they seem so obvious in retrospect.

Take the wheels on luggage, for example. The wheel was invented in 3,500 BCE—but no one thought to mass-market suitcases with wheels on them until the 1970s. Of course, many necessary developments occurred in the intervening 5,000 years: surfaces smooth enough for the idea to make sense, the disappearance of a cheap labor force devoted to carrying others’ burdens—not to mention the rise of leisure travel in the first place. But there does seem to be an iron law of innovation that states that the tool appears first, then people find ever more creative ways to take advantage of it.


Putting the ‘Wheels’ on Financial Inclusion

For MetLife Foundation, innovation holds the key to expanding financial health for low- and moderate-income households—and those households can’t afford to wait 5,000 years. We want to create the conditions in which a culture of innovation, one that builds creatively on digital technologies and behavioral insights (the “wheels,” so to speak), can take hold and advance financial health. That’s why we’re launching a three-year pilot called i3 (Innovate, Implement, Impact) to foster this sort of innovative thinking in Asia—a program we hope to expand in the coming years.

MetLife Foundation conceived this idea based on our experience with grantees in the region. We had asked 17Triggers, a behavior-change firm with a history of partnership with our organization, to run an innovation-focused workshop in 2017 with Singapore-based LumenLab (MetLifeAsia’s innovation lab) for foundation grantees and sub-grantees. The participants, mostly leaders from inclusion-focused financial service providers, were hugely appreciative of the potential impact of technology, behavioral insights and design thinking on their work, and ultimately on their clients’ financial health. But at the same time, the question of how to internalize the concepts from the workshop and make them part of daily business remained—in short, how to foster a culture of innovation, not a one-off event or a process fix.

So MetLife Foundation teamed up with UNCDF on the i3 program, which will run through October 2020. We chose China and Malaysia as our starting places because both countries have the foundational elements in place: big addressable markets, an enabling policy environment and financial inclusion institutions with the necessary resources (technological and human) to make productive use of innovation.


A Flexible Approach to Fostering Innovation

UNCDF is setting up innovation hubs in both countries, permanently staffed with local and regional experts, and featuring guest visits from leading international talent as well. The hubs will convene strong local partners from both the public and private sectors, running boot camps, hack-a-thons, trainings and workshops to provide innovative ideas and support to financial inclusion institutions. These institutions will be offered tailored services like hands-on consulting and advice on specific planned innovations or ideas, plus support to set up the workplace systems and practices that foster innovation in-house.

By October 2020, the project will include 50 financial inclusion institutions whose staffs will be trained, supported and challenged to innovate new solutions that will reach at least 400,000 low- to moderate-income customers. We will not dictate the specific forms that the innovations should take. For example, an innovation could be a simple bank account, if that is what the market wants—but one that is redesigned to suit the context of the low-income target market based on some specific behavioral insight, delivered in a way that is genuinely easy and conducive to better financial health. It could involve using data creatively to offer easy, appropriate and affordable credit. It could focus on finding creative ways to help people in the target market save for short- as well as long-term goals.

MetLife Foundation and UNCDF recognize that genuinely effective solutions require more than simply copy/pasting from other markets. We know that such solutions require creativity and innovation—but we leave it to the innovators themselves to explore and decide what these solutions should be.


A Multi-Stage Process

UNCDF’s work will span four phases:

Incubate. This phase will involve establishing and staffing the hubs, building community buy-in through various engagements and events, and identifying partners. Community events will act as a springboard for engaging with potential in-country partners, allowing them to network with each other. From these relationships, partners will be invited to participate in hack-a-thons, design sprints and other idea-generating activities to bring in new problem solvers and idea creators. The combination of these activities will also give shape to the community of practice in-country and focus the use of outside expertise. This phase will identify potential ideas and solutions worth incubating for scale.

Accelerate. Once high potential ideas are identified, the country support team will provide tools and resources to refine, test and scale them. This portion of the journey will allow the selected participants to dive deep into the creation of new prototypes or improve existing ones. This will be an opportunity to work with experts and mentors and will provide the capital support and tools that enable entrepreneurs to test their products in live market conditions.

Scale and compete. The successful prototypes will be exposed to new markets and to a wider range of funders and investors, enabled by the global connections of UNCDF. Attracting a wider range of investors is a key condition for creating a sustainable local innovation platform.

Learn and share. This phase will consist of testing hypotheses, tracking lessons, and developing and implementing a communications strategy to reach local, regional and global audiences. The aim is to ensure that all lessons (both successes and challenges) are well-documented and widely shared across relevant platforms. This has a twofold purpose: to learn as we ourselves go forward in this project, and also to ensure that others who are willing to learn and engage have access to every practical insight and lesson.


Innovation Requires Risk

While the project is still in its early days, one issue that we already know requires attention is the structuring of incentives and metrics. Businesses reward success. This is a logical enough approach, but it’s one that tends to reinforce the status quo: If your incentives depend on delivering something that works, you’re probably going to deliver something that is very similar to the last thing that worked.

Innovation, on the other hand, involves risk by definition. New ventures and concepts cannot be measured against traditional metrics and performance goals. Community participants should be rewarded for appropriate levels of risk-taking, and for demonstrated capacity to learn from creative failures. That’s why MetLife Foundation and UNCDF are working together to embed that understanding into the innovation culture we are building around the hubs, and to incorporate it into our key performance indicators.

The i3 program spans the UNCDF’s work in China and Malaysia over the next three years and also encompasses the work of MicroSave, another MetLife Foundation partner, in Bangladesh and Vietnam. UNCDF and MicroSave will be jointly sharing knowledge across all four markets, to learn from each other and to allow financial inclusion players operating in different contexts to learn from all these experiences as well.

There’s no doubt that some innovation originates from a one-time burst of inspiration or insight. But in general, we suspect it’s more a product of culture: of a community of people committed to taking calculated risks, thinking and acting creatively, and maintaining a healthy restlessness. These cultures may evolve over time—Silicon Valley springs to mind—but they don’t happen by accident. MetLife Foundation believes that advancing financial health at scale requires transformative innovation—not just one good idea here and another inspiration there, but a broad-based culture of innovation throughout the market. To embed that culture, someone has to promote and sustain it in a systematic way.

This is what MetLife Foundation hopes to achieve in Asia in the coming years, and in the future, we hope, in other markets as well.


Photo: Night traffic in China, by Steve Webel via Flickr.


Krishna Thacker is Asia regional director for the MetLife Foundation.

Jaspreet Singh works in the area of digital economy with UNCDF.




Education, Finance
Base of the Pyramid, financial health, financial inclusion, innovation, product design