BBVA BANK (A): Innovation Initiatives 2003-2008

This case shows how a large corporation can appreciate innovation as their new organizational culture. For a bank that based its expansions on geographical spread, mergers & acquisitions & revenue growth, to change to a culture based on innovation is not an easy task but is a step in the right direction. However, with the advent of the financial crisis in 2008, consumers have lost faith in financial innovations and it would take BBVA time & resources to instill consumer confidence & trust in innovation in the banking industry.

1. How did BBVA make the transition from a strategy of growth driven by merger and acquisition to an organic strategy driven by innovation? How successful have they been? The department in charge of the innovation initiative tried to transfer the spirit of innovation throughout the corporation and initiated a plan to focus on health, travel & leisure, retail, business services etc. These plans were not strictly for profit motive but mainly for the sake of management and innovation.

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This was how a more organic culture spread through the organization.

BBVA had been successful in their internal measures. There has been a change in the organizational culture and innovation has been valued and numerous new products have been introduced. But externally, they are still not seen as an innovative organization. Also, the financial crisis of 2008, whose major cause was believed to be “innovative” derivatives, had caused people to lose faith in financial innovation. 2. What is the best way to measure service innovation? Why is this important? The best way to measure service innovation is customer feedback.

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This shows the organization whether what they believe internally is not just them being self involved in the organizational culture. 3. How should BBVA orchestrate the next phase of the innovation initiative which is to decentralize the effort to departments and dispersed units? How should they balance corporate and departmental innovative efforts? They should incorporate innovation within every department rather than a central authority for innovation. They could instill the need for innovation in all critical staff. The corporate innovation department need only monitor the progress of each department in terms of innovation 4. In spite of the apparent relative success of BBVA’s transition from a M&A (merger & acquisition) strategy for growth to an organic, innovative strategy for growth, Santander grew much faster during this same period and is listed on the Business Week top 50 most innovative companies. What are the implications of these outcomes during this critical five-year period on global banking? During the pre crisis period, there was a constant trend towards deregulation & internationalization of financial activities and that is what lead to the rapid expansion of Santander due to M&As.

They were growing based on applying their excellent retail practices to inefficient banks but with strategic importance. However, with the financial crisis, government regulation has increased and there are more barriers towards internationalization and hence there would be need for more innovation for growth. It would be even more difficult for Santander to do so because of the highly dispersed & diverse nature of Santander’s operation. On the other hand, BBVA could use its new culture to leverage itself and work on bottom line profitability.

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BBVA BANK (A): Innovation Initiatives 2003-2008. (2020, Jun 01). Retrieved from https://studymoose.com/bbva-bank-innovation-initiatives-2003-2008-new-essay

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