Reinvention: the key word
We live in an age of relentless technological progress: our close ancestors would have had to live several lifetimes to witness the leaps forward that we have come to see as normal.
Many of these changes affect our environment, opening up new possibilities, and making life easier in ways that would be impossible were it not for the new technologies. And it is precisely within this context—that of understanding that the vast majority of products and services we use were defined and conceptualized before technology changed the way we can do things—where some businesses with vision are innovating in interesting ways. Not because they want to persuade us to try their new products and services, but so that we are able to do the same things we have always done, albeit more simply, more easily, more comfortably, by taking advantage of the benefits of new technology.
Square is one such company. I have been enthusing about Jack Dorsey’s company for years, as one look through my Spanish language blog shows. In short, I am a fan. Square’s approach is to reinvent processes that we repeat everyday, but that could be much easier, and to do so in an environment as rigid, controlled, and limited as the financial world.
Charging via a credit card obliges businesses to open a bank account, meet certain criteria, and use a specific terminal to do so. The simple alternative? Let’s make a tiny magnetic reader that we stick into the audio input of our smartphone which is able to do everything that a terminal can do except read the card’s magnetic band, then open a bank account online, and off we go. Now we can be paid by credit card even if our job is training people in a park. And if we want a simple alternative to the old cash register? We think about by using things that are already part of our everyday lives. Do we want to be able to pay for things without even using a credit card or having to identify ourselves? We simply pay with our face, which we normally have with us.
All of these things have been around for some time now, and have shown that there is a place for reinvention. The first response by most people familiar with payment methods when they see Square’s video in the ice cream shop and notice that the customer leaves there without using any type of identification, but by simply saying: “can you put it on Will” is one of incredulity, along the lines of “that can’t be so simple”… but it works and is fraud-proof, based on such traditional security measures as meeting the “something you know” “something you are”, or “something you have” criteria.
Now it has occurred to Square to reinvent payment between individuals using a debit card. How? By something as simple as sending an email to the person you want to make the payment to, putting the amount and the reason, and then copying email@example.com. Once sent, if this is the first time you are doing so, you receive a one-off email asking for your debit card details. You introduce them, Square checks whether you have the funds using the traditional method of any shop, and processes the payment. The person receiving the payment gets two mails: yours, in which you could have written an accompanying message, and another from Square asking you if you accept the payment, asking for details of your account, and banks the money for you. All encrypted, easy, and free, without commissions.
In other words, Square has reinvented a transfer that used to be neither simple or cheap, by taking advantage of means that didn’t exist when transfers were first invented. Many of the procedures that we still follow to do many things are like they are because they are rooted in old procedures, but that can be done much easier with the means and the technology at our disposal now. How many companies would benefit from a reinvention mentality applied to procedures as Square has done? What is stopping companies that have always thought about what they do in traditional terms from thinking about reinventing those processes based on adopting other technologies that now dominate our environment?
In many cases this is simply a question of having grown used to the way things have always been done, of not wanting to question or rethink them, as those these processes were written in stone. On other occasions it is the lack of people with an early adopter approach to technology in a company, or of such people not being in positions of authority: boards made up of venerable older people who only use the cellphone to talk to other people, and whose emails are printed out for them by a secretary.
Just think of the benefits to such companies if they had people with a new way of looking at things, who took into account the new technologies that surround us. We sometimes talk about the mental laziness that prevents us from changing things, and that involves rethinking other processes that may not add value to the client, but that quite possibly would do so for our company: at the very least the benefit of not having to rethink them again.
These types of dynamic can unleash substitution processes: not changing things to avoid problems, which means somebody else changes them and you then have to follow their lead in an area where perhaps you are a leader, usually after a period in denial during which you try desperately to play down the new methods being used by others. And finally, a problem a dimension: the company believes that there aren’t really many early adopters our there, so few in fact that there is no point in redesigning the product or service for them, and that it is better to continue providing a consistent service for the majority. Not understanding that early adopters on many occasions lead the way, and that not following them means leaving a value that another will come and take advantage of.
Good company directors are not those that optimize everything to the point of extenuation, but those able to rethink and reinvent their ideas and processes when they detect changes that allow for it. In the age we are living in, surrounded by adoption processes that are growing exponentially, the key word here is reinvention.