Innovation in action with Michelle Booth (part 1)

PLEASE NOTE: This transcript has been created using fireflies.ai – a transcription service. It has not been edited by a human and therefore may contain mistakes

00:03
Dom Hawes
Welcome to Unicorny. This is a podcast about the business of marketing, how to create value, and how you can help your business win the future. And I'm your host, Dom Hawes. Maybe it's my advancing years, maybe it's the rate of technological change, or maybe it's something else. But the world seems to be accelerating. The months fly by and unless we're careful, another quarter goes, another year closes before we've hit our objectives. Increasingly, I'm seeing that rewards are reaped, territory is gained, battles are won by those who can innovate, iterate and rapidly adapt. So to my mind, traditional organizational structures are under scrutiny because they're just too slow. But that's not always the case, and today's guest is going to prove it.

00:51
Dom Hawes
Today we dig into the lived experience of a seasoned marketing pro who has thrived as an entrepreneur in the rigidity of classic structures. She's a champion of market and transformation, leading teams that are agile and empowered. She's all over data, behavioral psychology and attitudinal targeting, which, by the way, is probably where we all need to go. Drawing from real life experience, including her transformative role at one of the UK's best known high street banks, Michelle Booth, now head of growth, activation and innovation at Lloyds bank, joins the unicorny project to talk transformation. Over the last six months, weve talked a lot about theory, about models, about frameworks and concepts. Well, today were going to take a look at how some of what weve been talking about works in practice. Hey, Michelle, welcome to the studio.

01:46
Dom Hawes
Now, before we start, I saw you studied at the poor school.

01:49
Dom Hawes
Now, I really wanted to go there.

01:50
Dom Hawes
But I bottled it at the last minute. Tell me all about it.

01:54
Michelle Booth
The poor school is a performing arts school that I went to that was really eye opening, really, in terms of the experience. So basically I learned a lot of skills, not only just the storytelling and creativity that is obviously useful for what we do, but also I think the key takeaway that I got was about being comfortable in uncertainty. Obviously, you work in an ensemble and you just basically spend a lot of time being silly, playful and experimental. I really feel like whilst I didn't end up becoming an actor, I did definitely learn a lot of things that are transferable for my job today.

02:28
Dom Hawes
Tell me a little bit about your career to date.

02:30
Michelle Booth
I was a bedroom coder. I didn't have a formal degree, but I did do proper old school tools like Quark and Photoshop and I did a lot of HTML programming. So I got my foot in the door at the fledgling agency that became tribal DDB. So I was the 6th member there and rode that first dot wave. Then I spent a number of years in different agencies, both digital and integrated, before making the move to client side. So my first role was what was then called RBS, and I was part of a digital propositions team, which was a small group of innovators looking at everything from saving open banking and loyalty. And then I went to the venture side of the business, working across a number of the ventures, most notably Bo, which was the Monzo Challenger bank.

03:14
Michelle Booth
And then when that was folded due to COVID, went into NatWest and I led the brand campaign for tomorrow begins today and then also worked on the youth strategy and the social mobility program at Mass Thrive. And now I've got the best job in the world. I am working at Lloyd's, leading growth and innovation for the mass affluence segment. But obviously I'm here in a personal capacity to talk about all my experience.

03:37
Dom Hawes
Yeah, indeed you are. Now, your experience started in agency, then you swap sides. Tell me about that.

03:43
Michelle Booth
It was exciting for me. Working client side was like this massive toy box. You know, you picked up the phone to Facebook and they answered. You know, you could basically come up with ideas and then it was down to you to basically sell them internally. So for me, it was such a privilege. And also the access to data, whether it's customer data or product data, was unparalleled. So all the things that as an agency, you're often chomping at the bit for were all at your fingertips. So it was just, I love it and it's the most amazing experience, I.

04:13
Dom Hawes
Guess, also being closer to the business and closer to the outcomes. One of the problems sometimes in agencies, you're held at arm's length because probably quite rightly, the CMO or the marketing director thinks that every conversation you have is going to lead to an offer.

04:26
Dom Hawes
Of, oh, we'll do that for you.

04:27
Dom Hawes
It's not always the case, but if you want to get close to the business or close to business outcomes and trying to understand how the work your agency is doing contributes to those, sometimes that's quite hard.

04:36
Michelle Booth
Yeah. And I think that when your agency side think that there's one client and that's the client, when actually in reflection, there are many stakeholders, and I would say 80% of my job is stakeholder management. Storytelling and influencing the idea bit is relatively easy in what we do, but really it's convincing multiple different disciplines and viewpoints that this is the right direction to go to. So it's the same set of skills, but applied slightly differently. And I think that all the good stuff that we learn in agencies around pitching and influencing is really useful when you do move client side.

05:11
Dom Hawes
A little later we're going to dig.

05:13
Dom Hawes
Into Michelle sales experience of building out.

05:15
Dom Hawes
Innovative products and solutions inside big business.

05:19
Dom Hawes
We talked to Geoffrey Moore earlier this year about the innovators dilemma and how enterprise that adopts a zoned approach to business management can overcome it.

05:27
Dom Hawes
In case you haven't come across the.

05:29
Dom Hawes
Innovators dilemma or you need a refresher, it was a book written by Harvard.

05:32
Dom Hawes
Professor Clayton Christensen, published in 1997.

05:35
Dom Hawes
The core premise was that outstanding companies can technically do all the right things.

05:40
Dom Hawes
And still fail because innovating from within is really hard.

05:45
Dom Hawes
Simply they fail to respond to new ideas, technologies or paradigms because they put all their efforts into defending their existing franchise. Now, Jeffrey Moore observed that businesses that successfully navigate disruptive technologies do it by.

05:59
Dom Hawes
Deliberately creating a discrete incubation zone to.

06:02
Dom Hawes
Develop their own disruptive products and services.

06:05
Dom Hawes
I'm not going to dig any deeper into theoretical concept than that today.

06:08
Dom Hawes
And if you feel like you need.

06:09
Dom Hawes
To know more, then why don't you.

06:11
Dom Hawes
Go back and listen to the episode called how to overcome the innovators dilemma. It was aired on the 16 January 1st. Let's frame the problem by looking at the sector and understanding why an incumbent.

06:20
Dom Hawes
Might need to innovate. Today the product we're discussing is money. Michelle, we're going to talk about money.

06:28
Dom Hawes
Today, but it's not a subject many.

06:29
Dom Hawes
People like to talk about.

06:31
Michelle Booth
Why it's interesting when you work agency side, often the last thing anyone wants to work on is a financial services brand, usually because it's seen as staid and boring. And I think some of that is reflected in terms of customer attitudes as well. So why is that? That's the thing that I find the most interesting thing. You know, money literally makes the world go around. It gives us choices. And the role of a bank should be to give us more choices and provide us financial sustainability. Why are we so resistant and so disengaged with that? That's the heartland. And the thing that I find most interesting and also the biggest opportunity that I don't think that industry has cracked yet. You're more likely to get divorced than you are to change bank accounts and I think it's only 30% of people have a will.

07:16
Michelle Booth
So there's a lot of behavioral psychology locked into this and I think that there's still a lot to play for in terms of helping people do money better.

07:24
Dom Hawes
It is an interesting thing.

07:25
Dom Hawes
You know, I certainly remember early career like, you always spend 10% more than you earn unless you really start to focus on trying to save. That's a very painful thing. And I remember conversations with the pensions advisors that were thrusted in front of us and seeing the enormous amount of money that we're going to need to put forward every month if weren't going to starve. Obviously, I'm a bit older now, and I wish I had taken advice, but.

07:45
Dom Hawes
Money, while money matters, it's deeply unsexy.

07:48
Dom Hawes
As a kind of. As a product, isn't it?

07:50
Michelle Booth
Well, we used to say there's two things I wish I knew when I was younger. One is starting on wrinkle cream and the other is compound interest. So I think that's the problem is, you know, when we're young by nature, we have present focus. But really, you know, the issue with all behavior change is how do we create a future anchor that makes people take painful choices today for future benefit.

08:12
Dom Hawes
So in the call that we ran.

08:13
Dom Hawes
Before started recording, were talking about one of the problems with products designed, maybe in financial services, is that they're designed for the people who are actively into money. And we've already discussed the great majority of people aren't. Where do you think other problems might exist around kind of product design and financial services?

08:32
Michelle Booth
If you work in a bank, by necessity, you're interested in money, you're numerate, and you kind of like the challenge of commercial business finance. So if you take Geoffrey Moore's chasm, appeal is the sort of early adopters. When you actually look at the early majority in the laggards, they're people that have different view in terms of how they look at things. You know, they are the satisficers. They look at the next best option and they just don't think about money unless they really have to. So the opportunity is to look at that audience and to really understand their attitudes and behaviors, to be able to unlock change. And you know, like all good marketing, we make decisions emotionally and then we rationalize them. And I think that financial services has a huge opportunity to really understand the emotive elements.

09:25
Dom Hawes
Great. That is exactly what you've done in your career. Doing that means innovation.

09:30
Dom Hawes
And I love talking about innovation.

09:31
Dom Hawes
So let's dive into that. You were involved in an extraordinary project that, in Geoffrey Moore terms, would have been in what he calls the incubation zone. That was Bo at Natwest. What was the problem you were seeking to solve?

09:44
Michelle Booth
Well, the market was saturated. So when we did the look at the market review with all the neos, there was a lot of brands in there, but back to that point, they were all sort of solving for the same need. So when we actually looked at the data, and the first thing that we did is that we took 2 million anonymized spending accounts and looked at actually the behavior around that. And what we learned from it is that actual financial stability is far more to do with behavior than it is about income. Actually, people on lower incomes tend to better at managing money because they have to be. The issue is they don't have enough of it. But actually, once you do get a little bit of wriggle room, you can often live within your means or beyond your means.

10:23
Michelle Booth
You go to nicer restaurants, you go on better holidays. So the goal of beau was to help people do money better. And the insight was we target it specifically attitudinally. So for people who found money boring. So really looked at how we could use all the creative skills that we have as marketeers to really unlock that behavior change, and for it to be more like couch to five k than Strava. In terms of that optimization, in terms.

10:50
Dom Hawes
Of the product itself, how did you try to differentiate it from other products out there? What was the product?

10:55
Michelle Booth
Well, when we looked at the neos, what you saw is that most people use them as a secondary bank account, and that makes sense. You want to be able to jam jar your money. In a digital world, it's a lot harder to manage money than it is to manage cash. So one of the ways that people hack that is to create a second bank account that they put all their spending money in. And once it's gone. So as a big bank, were afforded the luxury of being able to create a companion bank account and design specifically for that. So were a companion bank account that you would put your spending money in, and then we would help it work harder and help you create that first rule of financial management, which is basically to spend less than you earn.

11:33
Dom Hawes
Talk to me a little about the developmental side of the product proposition, by.

11:36
Dom Hawes
Which I mean orienting to the market.

11:39
Dom Hawes
Researching the proposition, segmentation, targeting and positioning that kind of stuff.

11:44
Michelle Booth
We looked at the spending data, we saw that there was an opportunity, and it was a behavioral opportunity. So that gave us our first insight, then through around 61 to one interviews that we did in people's homes, so that we could really get under the skin of some of the attitudes and behavior, we started to see that there was a real opportunity to serve for those people that were unconfident around money, either because they were just turned off about it, or they just thought that they were rubbish at money, or they'd never really done a lot of the things that you need to do, like have a mortgage and things like that. The second thing is that they were present focused.

12:18
Michelle Booth
So to the point that we talked about earlier, they were just not able to think about the future, because they were still just trying to manage today, whether it's paying their rent or looking after their kids. So it was really a very tight focus attitudinally about being unconfident and present focused. And then finally, we scraped a load of social media data, and we heard how people talked about money. What was really interesting is when we use the terms that financial services use, there was very little discussion. But when we broadened it and used colloquial terms, what you saw is that the conversations around money were as big as the conversations around relationships. And what that taught us is that financial services weren't connecting with people. So we did a lot of work around our language and also around gender as well.

13:03
Michelle Booth
We saw that women talk differently about money than men often did. But rather than create a sort of Sheila's wheels, what we did is we designed for that insight. And then when we tested it with both men and women, the men that were actually turned off by banking also found this proper, really interesting and exciting.

13:19
Dom Hawes
So you've got a really good picture.

13:20
Dom Hawes
Of what your customer looks like and your product market fit. Talk to me a little bit about.

13:25
Dom Hawes
One of the other P's pricing.

13:27
Michelle Booth
Well, I think that were in a situation that the goal was to commercially make money by getting people to move their spending into the bank. And also it was a defender play. So part of the opportunity for us was that if we could mitigate the attrition that were getting from seeing from the neos that actually helped us make money. Obviously, then the next step is to help and support people in to creating savings accounts. But really it was a defender play in terms of the commercial positioning.

13:55
Dom Hawes
That brings us to where we very first started our conversation on the pre call, when were talking about Geoffrey Moore's zone to win. And that really plays to business organization. It's about the three horizons, the four zones. This is very clearly an incubation zone. It's a two to three year gestation product. It took you a long time, didn't it to get, like the proposition, refined. Talk to me a little bit about how the business management structure worked and how the core business related to the new unit.

14:26
Michelle Booth
So it was a separate business and in full zone to win methodology. It had its own culture, it had its own management structure, but were also working within the constraints of the bank's risk profile. What that meant was we did lose a little bit of pace in comparison to some of the fintechs, but also were building something that was robust and scalable. But I think the most important thing is that we did have our own sense of culture, we had our own sense of mission, and we had all the skills and disciplines represented, but in a much smaller team. So I was working alongside risk colleagues, legal colleagues and tech people, which meant that we could run a lot of parallel work streams together and also collaborate truly in sort of a pizza team format.

15:09
Dom Hawes
It sounds like a dream job to me as a marketer, that kind of thing, because it's so rare in corporate that you get to work, or any organization, actually, you get to work across.

15:16
Dom Hawes
All of the P's and you have.

15:18
Dom Hawes
The opportunity to be truly entrepreneurial. But that must put a lot of pressure on you, I guess, if you're in a leadership position, talk to me a little bit about how you and other leaders in the team kind of manage that, the expectations and the stress. Because incubation, by definition, it happens over an extended period of time, and we live in an environment more and more where people want short term results. Talk to me about some of the pressures.

15:41
Michelle Booth
Well, I think the first thing is that we had top table support. So I felt that my direct manager really had our back and we built a really strong culture of psychological safety. The other thing is that we all had that shared mission, and it wasn't just siloed and departmental we worked against with all the other teams. And the work that we created was also shared and vice versa. So if you think about it, when were doing a lot of the insight work, a lot of those insights applied to product development as much as it did to marketing. So I think some of the territorialism that can sometimes happen just didn't exist. And we really did have that shared goal of helping people do money better.

16:24
Michelle Booth
And I think because we spent a lot of time with customers, we all had a really shared vision of who were solving for. And I think because were in a different space, we also had ground cover to really work together as a fintech and have the space and time to kick things around. And also to fail. It's really easy to say we allow failure, but I remember numerous times where people would actually put their hands up and share some of the mistakes that they've made, and they were actively celebrated in a way that really created that.

16:57
Dom Hawes
Psychological safety, that kind of model. It's difficult to bring into a bigger environment, I think, because part of the thing about agility there may be is that it's small and easy to be that agile. And as you say, that psychological safety when the stakes are small and maybe are easy. But it strikes me that you personally, you're steeped in this, because you just, when you walked into the studio, you say, I've just finished a sprint, and here we are talking about iterations. You only gave yourself 90 days to prove concepts when the business actually launched. So there was a large period of research first, as I understand it, but then once you've honed the concept, you decided the launch was going to be a 90 day proof period.

17:32
Dom Hawes
I mean, how did you manage to make the business so agile, so able to take such a small window to validate a product?

17:39
Michelle Booth
Well, I think more broadly, the whole of boat was built on agile. You know, we'd made the decision to do proof of concept rather than slide wear. And so when it came to actually testing and learning and launching in a live environment, we'd already built that cadence. And I think that we've literally been doing press ups the whole way through in terms of having executional skills within the team. And I think having craft, so having really amazing designers and really amazing copywriters within the team, we could literally test and learn in a live environment. And were always really curious, you know, in terms of the response rates that were getting once were live in field. So that enabled us to move really quickly. And also I believe that strategy is execution and execution is strategy.

18:26
Michelle Booth
So were kicking it around consistently on a daily basis.

18:29
Dom Hawes
I was going to ask how often you were checking the numbers, because I know myself when I've launched digital products, it's hard not to get addicted to the dashboards.

18:36
Michelle Booth
It is. And also you also need to give the algorithm time to bed in. So I think part of that was also knowing when to respond and knowing when to wait. And that, I think, is the hardest thing. And I think we tested and learned as we go, and 80% of it was good and 20% was a lot of learning in there. So it's never perfect and I think that's the thing to accept. But what comes out of that is knowing which metrics are the ones to follow, and knowing which ones are either vanity metrics or also can actually lead you down the wrong way.

19:09
Dom Hawes
You spent two years doing the insight work and we talked about money and.

19:13
Dom Hawes
How hard it is to market and how it's a switch off to many people. So you did some pretty sophisticated nudge work, behavioral psychology work, to put behind the product before its launch. How did your understanding of behaviour then translate into and inform marketing plans?

19:27
Michelle Booth
So were super lucky to be able to work with the government's nudge unit and they were experts in the field. But also, I think a lot of the principles of marketing are aligned to behavioural psychology. I think the difference is were looking at it from an end to end journey. So looking not just at the marketing touch points, but looking at the context, looking at the behavior as an example, onboarding an app, most people don't do it straight the way through all the time, and that's nothing to do with the journey. It's because you've got to find your passport, you've all of a sudden the phone rings. So it's really understanding that context piece and being aware of how people act and behave, and understanding the right time to nudge people.

20:07
Michelle Booth
Because the whole thing with financial services is you might have the best product in the world, but, you know, we're just not built to do admin on a daily basis.

20:16
Dom Hawes
No, especially now none of us have the mental availability for it.

20:25
Dom Hawes
It's not often you get to be exposed to the inside story of the development of a brand like Bo. And it's the research, the planning, the analysis and the insights that stand out to me. Abraham Lincoln said, give me 6 hours to chop down a tree and I'll spend the first 4 hours sharpening the axe. And that's the approach I heard here. Two years sharpening the axe, then short 90 day cycles to iterate the product. Well, no spoiler alert needed here. You probably all know that Bo didn't make it, and we're going touch on that in part two, which is available right now on this platform. We'll look at Michelle's next challenge and hear how her world drew in Marcus Rashford to help young people get better at money.

21:09
Dom Hawes
The story of Beau is a story of product development in the incubation zone of Enterprise. That's one of four zones described by Geoffrey Moore in his book zone to win, which we discussed with him on January 16 in 2024. You can find that episode on Unicorny.co.uk now this story so far is textbook zone to win, but every product that successfully incubates has to go into and try and succeed in the transformation zone. That is a tough call, as we'll find out in part two, which is available right now on this very platform. You've been listening to unicorny, and I am your host, Dom Hawes.

21:54
Dom Hawes
Nicola Fairley is the series producer.

21:55
Dom Hawes
Laura Taylor McAllister is the production assistant. Pete Allen is the editor. Unicorny is a Selby Anderson production.