Innovation at Bank of America
Integrating to Win
January 4th, 2005PDMA International
October 24, 2006
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Product, Service, or Business Innovation
Innovation Operating Model
Organic Growth Imperative
Six Sigma (or equivalent) Discipline
Front-end Idea Generation
Ongoing Research and Concept Testing
Innovation Portfolio Management
Manufacturing and Distribution Model
2
Tangible Goods
Bank of America
Innovation at Bank of America
1. It’s a journey
2. Innovation is part of our DNA
3. Integration is our competitive advantage
3
The Journey
Gen III: Integrate and Refine
Gen II: Execute and Triage
Gen I: Build the Process
2002
4
2003
2004
2005
2006
End-to-End Innovation Business System
Vertical & Horizontal Strategic Planning
Corp Governance & Portfolio Mgt
Idea Generation
Local Governance & Portfolio Mgt
D
M
A
I
New Product Introduction &
Product Enhancement
Accolade
5
C
Product
Lifecycle
Management
Vertical and Horizontal Strategic Plan Alignment
Bank of America
Ken Lewis
Hoshin Plan
Bank of America
Ken Lewis, Chairman and CEO
VISION
Global Consumer &
Small Business Banking
“Be The World’s Most Admired Company”
Companies”
GOALS
Breakthrough Strategies
CUSTOMER
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through easy access and efficient, error --free service
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C. Goslee / B.Desoer
1.2 Attract and retain profitable customers/clients…and
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continuously
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keeping
and bringing
more
of their business to us
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1.1 Become
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1.4 Develop
and
innovative new products and
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solutions
which
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financial services work in ways it
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Provider of Choice
ASSOCIATE
Employer of Choice
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Deposits &
Debit Products
New Product Introduction
Team
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SHAREHOLDER
Investment of Choice
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Hoshin Page 1
6
Individual
performance plans
High-Level Product Innovation Process
Strategic
Planning
Idea
Gen,
Mgt
Define
Measu
re
Simply Stated
Analyz
e
Improv
e
The Final Design
Growth Opportunities
Launch and Monitor
Evaluate and Validate
Make It Deliberate
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Contro
l
Build and Prep for Launch
VOC Helps Drive the Innovation Process
Screen
Optimize
Business Case and Build
CONCEPT SCREENING
CONCEPT OPTIMIZATION
Qual and Quant
CONCEPT TESTING
Volume Forecasts
Launch
Monitor and Improve
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MARKET TEST
(VOC) (BOC)
VALIDATION
(BOC)
Key Performance Metrics
UNITS
 Number of ideas generated
 WIP, Yield, Kill Rate
 Strategic Mix (Incremental, Strategic, Breakthrough)
TIME
 Average Completion Time
 Average Time to Launch
 Average Aging
QUALITY
 Tollgate Achievement Rate
 Rolled Throughput Yield (RTY)
BENEFITS
 Percent of total revenue from new products
 Percent of benefits achieved
 Number of patents
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Sustaining Innovation
1. Leadership commitment and growth aspirations
2. Idea
3. Content
4. Portfolio
generation and development and management and
management
prototyping
measurement
6. Governance
7. Funding
8. Innovation culture
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5. Talent
management
The Result of Strategy, Process, and Integration
Strategically driven innovation
VOC throughout the process
Integration made the difference
In its first year:
 Over 3.2 million accounts enrolled
 Customers have saved over $230 million in their
accounts
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