Innovation is vital in today’s business world. But how do you drive creative change in an organisation, and what can finance professionals do to help?
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How to define innovation? The mercurial business term was given a workout at the INTHEBLACK event at 2014 CPA Congress in Sydney and Melbourne, where an expert panel highlighted some truly diverse approaches to bringing on the new.
“I believe an organisation’s ability to innovate is directly correlated to its ability to learn,” says Annalie Killian, AMP’s director of innovation and social business, who established the Amplify Festival at the financial firm to create an immersive learning experience “where people don’t only listen, they actually get to act on it and experiment”.
Kieran Flanagan, whose consulting firm The Impossible Institute has worked with many international brands, says that “Innovation is a leadership skill. When you innovate, you are inventing the future.”
Eileen Burnett-Kant, the head of global human resources at blasting solutions and mining chemicals giant Orica, has seen a mind shift within her company – from seeing innovation as clever technology to “how clever we are in applying it to customers’ productivity problems”.
The three explored the different drivers of innovation at the Congress session “INTHEBLACK presents – Building a winning culture of workplace productivity and innovation”, chaired by Lisa Carroll, CPA Australia’s executive general manager, communication, content and publishing.
According to Flanagan, a trigger for innovation comes from knowing what customers want and using that to shape your business model. She uses the example of a firm of optometrists who believed their business was all about selling glasses and testing eyes, yet most of their revenue came from selling spectacle frames.
“They didn’t understand their own business, where the money was coming from. They were in fashion retail,” she says.
Another example is Kodak, whose management failed to realise “they were in the memory preservation business, not the film business.”
Killian observes that in a larger corporation there are many logical reasons for dumping a particular way of doing something and embracing a new one, “but I find the human mind is not that linear and practical,” she says.
“Innovation is a discretionary gift and you can’t mandate people to be innovative.” – Eileen Burnett-Kant
“From repeated experimentation, what we have learned is that people don’t detach from the status quo all that easily until there’s a pain point.”
Orica, on the other hand, works on innovation directly with customers.
“It’s about repeated experimentation with customers to present the value [of what we do]. It’s about risk taking, having a commercial proposition with the customer that says we will break rock for you and we will guarantee a solution for you – and we’ll take some risk for that, so if we don’t do it we won’t get paid as much.
“It’s also about how people think about relationships they’re developing with customers and who they’re developing them with. If you think of yourself as selling product you’re talking to the procurement people, and if you’re thinking of selling the solution you’re talking to the mine manager and senior executives in the company about how they can save millions across the business globally.”
However, she adds: “Innovation is a discretionary gift and you can’t mandate people to be innovative.”
In terms of getting people to change their ways, AMP’s Killian concludes that it takes a long time for the seeds of a bright idea to germinate and take hold.
“The more proof points (for your innovation) you can bring into the environment simultaneously and scatter at different levels of the organisation – that is the way to accelerate the adoption curve … Overnight successes are few and far between. It’s usually a process of internalisation. That’s what’s such a challenge in our organisation. The people who are making the decisions are furthest from the edge, so if we can bring that edge closer through exposure, that can accelerate contacts with a customer.”
What is the role of the finance professional in contributing to organisational performance?
“An important role that finance people play is to help people understand where the [business] story is not as it should be. That immediately presents an opportunity to ask why, or how can we make it better. That then can become the nub of an innovation. It’s not only about the creative input around the idea, it’s identifying what are the big opportunities to go after.
“Challenge yourselves to become better storytellers, become filmmakers, learn infographics. How can you make your financial numbers accessible to people in a way that’s enjoyable and visually attractive and really short and concise?”
“Finance is vital to creative people… That isolationist model where finance sits away from everyone else – that’s a crazy model – (we need) finance people integrated in the business and understanding it. We say: This is what the rules say but what if we stretch them? What is a new way to make money out of this? How can we get more out of this strategy? How do we price things? What’s our cost/product position? Finance can engage us and make us aware of how our business is operating.”
“From a people productivity perspective, it’s going boldly where few finance and HR teams have gone before into making incentives clear to the business or working on remuneration.
“We spend an enormous amount of time in HR designing what we think is the perfect incentive to motivate behaviour and then hand over X per cent of the profit motivating everyone’s behaviour around it. Yet we miss the opportunity to explain to people throughout the year what is really going on with the business and its performance: How do we connect that with opportunity for people at the end of the year?
“I looked at the letter we sent out to people about what they got in their bonuses. It said: ‘Dear Joe or Jane, Thank you for your efforts this year. Your bonus is X. And season’s greetings to you and your family.’ I thought it was crazy because it didn’t take the opportunity to explain the business performance and the drivers that went into that.”
This article is from the December 2014 issue of INTHEBLACK