Actually, I left it on a train last night, after texting to say what time I'd be home. Obviously I dropped it after doing so, and it could be anywhere in the UK by now.

Such a bother, but really, just the excuse I was looking for to do an upgrade. Am off to look at 3GS later this morning.

I know that some of my statements in that area have been somewhat controversial: for example, I suggested that 20 graduates with 1 year of experience may result in better outcomes than 1 senior manager with 20 years of experience.

Regardless of age, though, there is one fact about crowds which is impossible to ignore: they will often rally themselves around specific problem spaces in order to make themselves a solution which works.

In other words, they'll take the set of resources they have access to, including the products and services of other companies or groups, and recombine them uniquely to make something for themselves.

I was put in mind of this, the other day, when I discovered the Hackintosh movement on netbooks. The lack of an Apple product in this category has resulted in groups of people who have "hacked" the Apple operating system so that it runs on commodity PC hardware. Neither Apple, nor the manufacturers of these commodity systems had expected or designed for this, but it is being done anyway.

There are so many examples of this going on. I've been watching a project that Chris Anderson, author of recently released book Free has been running for a few years. He decided that he'd be interested in creating a DIY UAV (unmanned aerial vehicle). It started with a remote control airplane and a robot made out of Lego Mindstorms. Then they made autopilots out of mobile phones. Now they are selling open source autopilots (that's right, open source hardware) with specific capabilities for UAVs.

Not that this kind of thing is anything very new. Kids have been modding their cars, their game consoles, and every other sort of comsumer device for years.

The thing is, though, that most of the time till this point, companies have been trying to make sure that their products are not composed into other things without their permission. Apple, for example, apparently had a behind-the-scenes fight to get Dell to discontinue their mini-9 netbook. It was, I'm told, too easy to turn into a Hackintosh. Now this may just be a rumour circulating around the Hackintosh community,or it might be real. But we do know that Apple are very dedicated to controlling every aspect of their product's eco-systems.

The change that is coming is that organisations are realising that no matter what they make, someone else is going to make something of it. They key question is whether they will fight to stop it, or build innovation to encourage it.

It is my view that the most successful companies will be active in trying to encourage this kind of modding of their services. And that goes even for banks and other service organisations. The power of a community that depends on you for a key part of a solution to a problem – even if the problem has nothing to do with the products and services you sell – is significant.

Of course, this brings into question the whole question of where exactly competitive advantage will come from in the future. For bankers and service organisations, it's traditional to believe that customer experience is that advantage. But when you let just anyone in to mash together new things, you don't really have control of experience any more. This is why so many companies are so rabid about making sure their stuff can't be used in unauthorised ways.

But for companies that allow their products to be recombined and recreated, competitive advantage does not come from the product itself. It comes from the number of new products that depend on the original. In other words, the advantage is having the biggest crowd of people dependent on you for solving some other problem.

How do you get the biggest crowd? By making sure your platform is the easiest to modd, of course.

Now, if only I could think up a way to make banks agree that opening everything up and letting people build new things for themselves was safe and responsible…

Why do you care about staff attrition when you are winning the war for talent and can hire anyone you want?

It caused a few people to write back with contrarian views:

@NickDellaRiva said:

Corp knowledge must count towards speed of execution / delivery? If not, why does education matter at all?

If that were true, we would let start ups innovate & then buy them out. Except Newsltd can't $ google, changed barriers entry

Final word..bcse no company can attract all of the talent & leverage. Individual stars vs teams. TDF 4 examp. join wch team?

And @RafManji said:

because you lose the soul of your business

And finally, @GerdShenkel concluded:

what matters is "regrettable" attrition. @ubank we measure that we a lot of care.

These are interesting arguments, but they don't go to the real point I was trying to make. Mind you, it is difficult to make any point on Twitter, since the truncation of 140 characters means you must be overly brief. Since that's the case, I thought I'd better clarify.

Imagine this scenario. You create a company that is so interesting, and so innovative it is the default choice for everyone in the marketplace. The sort of company, for example, that Google used to be. The sort of place where there is instant street cred the moment you disclose to everyone you work there – sort of like Microsoft was once. Where there are free meals, staff benefits beyond belief, and above all, the most interesting work available.

In such a company, you can pretty much get any skill at all you need. All you have to do is advertise the fact that you're looking and you get a whole buffet of choice. Ignoring the fact for a moment that such an oversupply of qualified people will likely exert downward pressure on financial compensation, in such a company, you can't care much about attrition, and here is the reason.

The new, young, workforce you'll be hiring (with all this choice available) won't be thinking in terms of staying around for long. It is one of those things I've begun to notice as I get older, and the people I'm working with get younger. They don't sign up for careers any more. They do gigs. Short term, interesting work fulfilling them right now, but unlikely to do so for more than a year or so.

Our next generation workforce is much more transient. They think, in fact, that CV blocks of more than two years are almost worse than 2 years without work at all. The other day, for example, I was talking with one of our new hires, and he asked me this:

"How long do you think I can stay in this bank before I won't be able to leave it?".

This was not a questions related to any particular golden handcuffs we might have wrapped him up in either. No, his concern was that the longer he spent in our institution, the less transferable he would be elsewhere.

I see this effect all the time, and the thinking is quite different to that of workers in previous generations. When I speak to freshly minted bankers practically anywhere in the world, I get the same reaction.

So in other words, as the younger workforce becomes a more significant percentage of the overall total, attrition is going to increase, no matter what you do.

The ultimate point of all this, and which I failed to communicate in my tweet in the first place, is that thinking retention is very dark ages, very traditionalist. It implies that something is lost when people do gigs instead of work. I don't think that is true, because collaboration and other digital technologies enable the "soul" of a company to transition rapidly. You don't need to have heroes and multi-year experience to preserve capability any more.

What you do need, however, is to get a super-star at short notice to solve specific problems. Increasingly, that's what we'll be spending most of our time on anyway, as the cores of our business become more commoditised and more like utilities.

And to do that successfully, you need to think attraction not retention. You need to build the company that is the default employment choice for a significant percentage of people in a given market.

I will have a certain number of review copies to give away. If you've got a blog or are otherwise social-media connected, and would be willing to write a review, please email me. I'll ask my publisher to send you a copy, though I haven't yet checked how many copies I'll be allowed to give out. But email me anyway, and I'll see what I can do.

In the meantime, when I posted the availability message on Twitter, @seankain asked for a table of contents be made available. I'm told it will be available in the next week or so as well as "look inside" on Amazon, but I can't explain why it isn't there already. Publishing seems to operate on a timeframe rather more protracted than that we've become familiar with in this real-time world.

Anyway, here's the table of contents:

1 Introduction

What you will find in this chapter

1.1 What is innovation anyway?

1.2 What happens when you don't futureproof

1.3 Five things that innovation is not

1.4 150 years of innovation in banks

1.5 The innovation downside

1.6 An overview of the futureproofing process

1.7 Where to go now

2 Innovation Theories and Models

What you will find in this chapter

2.1 The innovation adoption decision process

2.2 Personal innovativeness

2.3 Innovation from the perspective of the market

2.4 Characteristics of innovations

2.5 Innovation from the perspective of the firm

2.6 Case Study: The internal adoption of social media

2.7 Theory of disruption

2.8 Case Study: PayPal's continuing disruption of the payments market

2.9 Thoughts before going further

3 Innovating in Banks

What you will find in this chapter

3.1 The innovation pentagram in banks

3.2 The Five Capability Model of a successful innovation function

3.3 Case Study: Innovation at Bank of America

3.4 Building out the futureproofing process

3.5 Technology, business, and innovation

3.6 Autonomic innovation

3.7 Case Study: ChangeEverything, a project by Vancity in Canada

3.8 The banking innovation challenge

4 Futurecasting

What you will find in this chapter

4.1 The purpose of futurecasting

4.2 An overview of futurecasting

4.3 What futurecasts should innovators be doing?

4.4 An example

4.5 Constructing the futurecast with scenario planning methods

4.6 Prediction methods

4.7 Case Study: AMP Innovation Festival

4.8 Some final words about futurecasting

5 Managing Ideation

What you will find in this chapter

5.1 An overview of the ideation phase

5.2 Campaign and create

5.3 Collect, catalogue, and compare

5.4 Scoring

5.5 Customer insight

5.6 Customer co-creation

5.7 Case Study: Royal Bank of Canada's Next Great Innovator Challenge

5.8 Concluding remarks

6 The Innovation Phase

What you will find in this chapter

6.1 Should we? Can we? When?

6.2 The innovation portfolio

6.3 What happens next?

6.4 Tools for 'Should we?'

6.5 Tools for 'Can we?'

6.6 Tools for 'When?'

6.7 Selling innovations

6.8 Case Study: Bank of America and the Centre for Future Banking

6.9 Wrapping up the innovation phase

7 Execution

What you will find in this chapter

7.1 Ways to manage execution

7.2 Building the new thing

7.3 The launch

7.4 Operations post-launch

7.5 Signals for futurecasting

7.6 Case Study: Innovation Market

7.7 The end of futureproofing

8 Leading Innovation Teams

What you will find in this chapter

8.1 Leadership styles

8.2 Things the leaders should do

8.3 Signs of a bad innovation leader

8.4 What next?

9 The Innovation Team

What you will find in this chapter

9.1 The changing shape of the innovation workforce

9.2 Creators, embellishers, perfectors, and implementers

9.3 Team working

9.4 When innovators go bad

9.5 A last word about innovation teams

10 Processes and Controls

What you will find in this chapter

10.1 Oversight

10.2 Metrics

10.3 Rewards and recognition

10.4 Innovation and the organisation

10.5 Funding innovation

10.6 The visible face of innovation

10.7 And finally . . .

11 Making Futureproofing Work in Your Institution

What you will find in this chapter

11.1 Case Study: Civic banking at Caja Navarra

11.2 Starting your innovation programme

11.3 Making ideation work

11.4 The innovation stage

11.5 Execution

11.6 Doing futurecasting

11.7 Innovation leaders and teams

Corporate innovation festival, I hear you ask? Well, yes indeed, and when I first heard about it, I was impressed, but couldn't for life of me see how anyone could possibly get a business case together to support such a thing.

Let me paint you a picture: get your Head of Innovation to go around the world and find the most interesting people she can. Doctors, political advisers, new media people, web psychologists, and, yes, even a banker. Then bring them all to Australia and let them talk about their work to the whole institution. See if it inspires new and creative thinking in your people.

But don't just stop at internal. Have an event in a pub where local ph.d students can pitch their research on a mic in two minutes of less, and give prizes to the best as voted by the crowd. And then have your CIO decide that everyone deserves a prize and give each struggling student $1000 to roaring applause.

And since you're not just doing internal, how about you broadcast the whole event, including all these expensive internal guest speakers, so that the world can share the inspiration. Do this even though traditional thinking would suggest that allowing just anyone, including competitors, to participate, would reduce any potential competitive advantage you might generate from the investment.

And just as icing on the cake, bring all your top customers and investor in to meet all these interesting people. Don't just stop at confronting traditional thinking in your staff, make sure your most valuable customers get their thinking challenged as well.

Finally, finish it all off with a staff expo where everyone gets to show how off their work in new and creative ways. Have, for example, a mock cave complete with cavemen to explain how your legacy systems have evolved to their present state.

You can understand, being somewhat a traditionalist myself, that when I looked at all this, I couldn't understand the business case. That's because the results aren't obvious when you just look at the numbers. I'm very busy running an innovation function that tries to get all these nice predictable returns from investments, so doing a festival hardly seems a great use of money.

But then I realised this: Amplify09 is the most magnificent ideation campaign I've ever seen. It makes the ones my team and I run internally at the bank look ridiculous in comparison, and we know how to turn our little attempts into money predictably.

Can you just imagine how much differentiation AMP will have as it actualises all that out-of-band thinking it generated from this event?

But the more important point is this one: quite obviously, AMP is an institution that's realised that the real competitive advantage it has is the people who choose to work there. Who cares about technology and products and processes, when you have the ability to invent uniqueness whenever you want?

Meanwhile, the rest of the industry is very busy with dark ages thinking about the nature of competitive advantage. They're all still doing trade secrets and patents, and trying to close down the ability of their staff to collaborate in, and outside, their institutions.

Want to bet which institution I think will really differentiate in the long term?

Which do you think has more brain power: 25 twenty-three olds (i.e., brand new graduates) with a year's experience each, of one 65 year old with 25 years of experience?

The obvious answer, of course, is that the crowd of 23 year olds has more brainpower, but the real question is whether the value of experience outweighs the obvious advantage in mental watts of the group.

My thinking is it does not, and here is why.

Experience is a result of the formation of mental models about the way things work. Essentially, one observes that certain actions produce certain effects, and over time one learns to generalise so that even actions which are only marginally related to those previously observed can result in reasonable predictions of outcomes. Because the mind has limited abilities to accept information and process it, developing experience is something that takes a large number of years.

This is why you generally reserve very accountable positions in organisations for those who have lots of experience.

But try this experiment. Get a group of new graduates together, and confront them with a crisis. You will be amazed when you watch what happens: instead of some alpha-male/female attempting to take control of the situation, the group optimises itself, using rapid fire burst of communication, to solve the problem synergistically. It looks like chaos, and you wonder whether or not anything will ever come of it, but invariably very good outcomes do. And the order that emerges from all this chaos tends to be a highly optimised resolution of the problem at hand.

I know this, because I've had lots of time to study our new workforce at the bank, and they do things in quite different ways to those that my peers and I do things. We try to take control, to lead. They don't bother with any of that, and self organise into a non-structure that produces results, which are often unexpected.

Coming back to my original question, then, the value of experience as a differentiator in this case is very much reduced. Because you have 25 minds processing things in parallel, the amount of information that can be involved in a mental model is incomparably greater than that for a 65 year old with experience. 25 minds working together can accept all the evidence a 65 year old accumulates over their career in hours or days, and Instead of building models over time, they do it in real-time. The result will tend to approximate the best available outcome given a much broader analysis of data.

Here's another experiment you can try if you don't believe me: talk with a group of twenty-somethings about a project they've been working on, and ask them for detail of things they didn't work on personally. They'll have no clue at all what their peers are doing, and will refer you onwards. They don't care what their peers in the crowd are doing, because they have self-optimised their handoffs and interactions so they don't have to care.

That's quite different to the way that I, for example, would approach something. I need to know that the whole outcome is under control. I need to know the detail is in hand. And I must certainly feel able to explain the whole project to anyone who asks me. I am accountable; therefore, I must know what is going on.

In other words, I am unable to harness the power of multiple minds in any way which makes the whole greater than the parts.

Now, before I leave this topic, I want to make one last point, and it is this: the communications and collaborations technologies in the hands of our new workforce already let them collaborate at lightning speed. But these are not technologies that one expects in any way to slow down their advance. The power of crowds of young people to do things previously reserved for only older, more experienced people will continue to grow, probably in an exponential fashion.

Consequently, I predict the death of experience as the defining decision factor in who gets what job in our workforce within the next 10-15 years. That's the timeframe, by the way, that significant numbers of these collaborating crowds of young people will start to win their first senior jobs away from the old guard non-collaborators who presently rule the roost.

I'll close this post with another discussion I had at Amplify last week, and it was with a senior executive I'd made these points to. He wanted to know, if the end of experience was nigh, what would happen to all the older workers out there? Now, I don't have a convenient answer to that, because I don't know. But what I have observed so far is that collaborating groups in this age band tend to make collectively moral decisions which include the social best interests of most players.

The probable result? Our experienced workforce will get taken care of, whilst at the same time, they are pushed to the edges of major decision making. They will be reference encyclopaedias that can be called on for historical facts quickly and easily, but won't be core to the actual process of creating substantial change.

Which do you think has more brain power: 25 twenty-three olds (i.e., brand new graduates) with a year's experience each, of one 65 year old with 25 years of experience?

The obvious answer, of course, is that the crowd of 23 year olds has more brainpower, but the real question is whether the value of experience outweighs the obvious advantage in mental watts of the group.

My thinking is it does not, and here is why.

Experience is a result of the formation of mental models about the way things work. Essentially, one observes that certain actions produce certain effects, and over time one learns to generalise so that even actions which are only marginally related to those previously observed can result in reasonable predictions of outcomes. Because the mind has limited abilities to accept information and process it, developing experience is something that takes a large number of years.

This is why you generally reserve very accountable positions in organisations for those who have lots of experience.

But try this experiment. Get a group of new graduates together, and confront them with a crisis. You will be amazed when you watch what happens: instead of some alpha-male/female attempting to take control of the situation, the group optimises itself, using rapid fire burst of communication, to solve the problem synergistically. It looks like chaos, and you wonder whether or not anything will ever come of it, but invariably very good outcomes do. And the order that emerges from all this chaos tends to be a highly optimised resolution of the problem at hand.

I know this, because I've had lots of time to study our new workforce at the bank, and they do things in quite different ways to those that my peers and I do things. We try to take control, to lead. They don't bother with any of that, and self organise into a non-structure that produces results, which are often unexpected.

Coming back to my original question, then, the value of experience as a differentiator in this case is very much reduced. Because you have 25 minds processing things in parallel, the amount of information that can be involved in a mental model is incomparably greater than that for a 65 year old with experience. 25 minds working together can accept all the evidence a 65 year old accumulates over their career in hours or days, and Instead of building models over time, they do it in real-time. The result will tend to approximate the best available outcome given a much broader analysis of data.

Here's another experiment you can try if you don't believe me: talk with a group of twenty-somethings about a project they've been working on, and ask them for detail of things they didn't work on personally. They'll have no clue at all what their peers are doing, and will refer you onwards. They don't care what their peers in the crowd are doing, because they have self-optimised their handoffs and interactions so they don't have to care.

That's quite different to the way that I, for example, would approach something. I need to know that the whole outcome is under control. I need to know the detail is in hand. And I must certainly feel able to explain the whole project to anyone who asks me. I am accountable; therefore, I must know what is going on.

In other words, I am unable to harness the power of multiple minds in any way which makes the whole greater than the parts.

Now, before I leave this topic, I want to make one last point, and it is this: the communications and collaborations technologies in the hands of our new workforce already let them collaborate at lightning speed. But these are not technologies that one expects in any way to slow down their advance. The power of crowds of young people to do things previously reserved for only older, more experienced people will continue to grow, probably in an exponential fashion.

Consequently, I predict the death of experience as the defining decision factor in who gets what job in our workforce within the next 10-15 years. That's the timeframe, by the way, that significant numbers of these collaborating crowds of young people will start to win their first senior jobs away from the old guard non-collaborators who presently rule the roost.

I'll close this post with another discussion I had at Amplify last week, and it was with a senior executive I'd made these points to. He wanted to know, if the end of experience was nigh, what would happen to all the older workers out there? Now, I don't have a convenient answer to that, because I don't know. But what I have observed so far is that collaborating groups in this age band tend to make collectively moral decisions which include the social best interests of most players.

The probable result? Our experienced workforce will get taken care of, whilst at the same time, they are pushed to the edges of major decision making. They will be reference encyclopaedias that can be called on for historical facts quickly and easily, but won't be core to the actual process of creating substantial change.

That means I have to write out all these pages of coded squiggles, using a crib-sheet the publisher conveniently supplied. The poor crib-sheet has been referred to so much now that it's basically just two pages of crumpled stained paper, valiantly holding on to its life by a dog-eared staple.

Anyway, I'm doing the review in my normal blog posting time, so forgive the momentary break in transmission here. I'll complete the task on the plane to Australia on Sunday, and will be resuming an enhanced posting schedule from down-under

My own thinking on this is that banks, and we already see this to a certain extent, will evolve into two groups that I have roughly describe as:

1. financial utilities
2. innovators

The former will meander in and out of government control, but never stray far as economic impacts exceed the stress test results periodically. On their clear thinking days they will consider new services or approaches that will work in the future environment you describe so well, then realise the infrastructural change required is prohibitively expensive and risky and go back to providing basic service to the 'system' as water and electricity utilities do.

The innovators will see beyond that, and carve a niche approach (large or small) that plays a role (large or small) in your mash up world. I used to call that disaggregated financial services, but I might steal your mash-up line because it is how the web 2.0 generation view everything. The Citi consolidator of everything view no longer holds true in 2029. Innovation will not necessarily be fancy or catchy - just practical and something people actually want.

This echoes a point he made a while back when describing the State of Innovation in Financial Services.

Now, in principle, I don't disagree with Colin, since both he and I imagine a future world where banks don't hold the sway they once did. But I think what Colin is saying here is the level of influence wielded by a bank will be sharply controlled: that they will be allowed to participate in the economy only to that degree which systemic security will allow. This follows from increased scrutiny and regulation which will surely be the outcome of bank performance in recent years. That, however, does not go as far as I have done, because in Colin's typology, banks are still the centre of the financial services value chain, just as electricity and water producers are still the centre of their various distribution networks.

My argument is it is possible that crowd based production eliminates the role of the generic utility altogether. In fact, we see this for both water and power: dispersal of both to the edge of networks is already occurring. I can install a rainwater tank, and reduce or eliminate my reliance on the water company. And I can install Solar and wind to cut back on power. Sometimes, on a good day, I may even give both back to the network.

It is inevitable, I think, that this happens in banking as well. Decentralisation is a natural consequence of the democratisation of the tools of banking production. And that is happening very quickly indeed.

There's another thing going on, though, which I think makes all this likely, and that's the desire customers have to buy things unique to them. Now, as bankers, we're all rushing to personalise our offers, but let's face it, the personalisation of today is just putting lipstick on a pig. Take a mass market offer, or bundles of mass-market offers, and throw them together with some personal data and you have "personalisation". That's not going to cut it for the next generation of consumers, if it does now. They want uniqueness that no one else has.

The thing is, that's practically impossible for a bank. We're all geared up to do things with large markets and large returns. There's no way you can build a product for a market of one and get away with it. Long tail economics are all very nice, but show me the bank that can fill the role of an aggregator of long tail products (the way Amazon and Netflicks) does, and I'll be off to work there in an instant. By the way, neither Amazon or Netflicks actually make the products they sell, unlike most banks which like to link the manufacture and sales functions.

No, the only way to get to markets of one is if customers make the products themselves. This is where the "mash up" I spoke of my in my last post comes in. Customers, who are able throw together bits of offers in unique ways, and then share them with other like minded customers, are the way things will eventually pan out. These are crowds at the centre of the financial services value chain, which will be highly distributed, highly chaotic, but not subject to the system risks of a centralised banking system.

Not that I don't think there will be utility-like financial services players. The kinds of people who provide highly regulated places to put deposits, for example. My view, however, is they are niche service providers to the crowds, as will be the innovators (in Colin's typology), who will do value-add things that cut down the work that the crowd will have to do.

Now I know this scenario sounds far-fetched, especially if you are a traditionalist banker. But you only have to look at what's going on in other industries (where, by the way, there hasn't been a banking crisis to accelerate things) to know things are changing fundamentally at a very deep level: in so many other places, the large corporations are being pushed out of the centre of their respective value chains by crowds.

Check out music, where record labels are being killed off by crowds. In computer hardware and software, where open source products are significant threats to incumbents. In film, where anyone can make and broadcast anything. In literature, where you can self publish and sell through mass market channels. In manufacturing, where anyone can design anything and send to fab-plants that can make anything. You get the picture.

It is hard to imagine that an in an industry as little loved as banking, this won't happen too.