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5 ways to build a culture of innovation in finance

12th Feb 2018
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For businesses that want to improve performance and grow, change is inevitable. And Chief Financial Officers and Financial Directors are playing an increasingly strategic role in driving these changes.

According to research from EY, roughly one-third of CFOs play a major role in the development of their organisation’s strategy. Specifically contributing with insight and analysis to support decision making, ensuring business decisions are grounded in sound financial criteria and leading key initiatives within the finance team that support overall strategic goals.

As with any new initiative or change, building a culture to support and make it successful is key. Few departments are as efficiency and process obsessed as finance. This caution is understandable given the increasingly complicated compliance legislation that must be met.

But ultimately, in a world that’s constantly evolving – developing a more agile and adaptable way of working, and a culture of innovation is key to success. While doing so naturally takes time, here are the top five things that CFOs and FDs should put at the very top of their list…

  1. Choose holistic over hierarchical change – Traditionally teams have followed a hierarchical structure, whereby change is mandated from the top down with little or no input from those at the bottom. But by empowering everyone in the team with a voice in what and how changes happen, they’re engaged from the very start of the process; making it far more likely to be a success. Involving newer or junior members of the team in decision making also allows fresh ideas and new insights to be surfaced from those less indoctrinated in the ‘company way’ of doing things. Especially when many such processes are built around systems that may be many years out of date.
  1. Make time for innovation – In a busy office where pressure to do more with less is only increasing, it can be hard to find time to do anything beyond the essential during the working day. Side step this by setting aside specific times for creative and strategic thinking; and assign specific problems or processes for review, even if nothing inherently seems wrong with them. Finding an hour a week would deliver huge value, especially if you take time to review the findings and recommendations from the process and look at what you can refine or enhance in the future.
  1. Know where you sit on the tech life-cycle – As almost every CFO or FD knows, a businesses core financial infrastructure system tends to sit on at least a seven year life-cycle. And these days, seven years is a lifetime when it comes to technology. Before moving forward with any tech-based innovations, it’s crucial to know exactly where a business platform sits in its life-cycle, so a strategic plan can be built around these timings. Technology applications and platforms outside the refresh cycle could be causing you harm that you haven’t even quantified.
  1. Think beyond finance – For finance to truly be a force for disruptive innovation, any changes made need to be integrated into every aspect of the business’ operation. For example, finance teams in fast-moving service-based organisations, like a consultancy or services business, need to have a strong understanding of every move their consultants and agents make in order to make informed decisions. Adcock Refrigeration and Air Conditioning did just this when refreshing their systems, choosing to use a software which supported a variety of functions, including stock control financial management and payroll; rather than just job costing, making it easier for support engineers to take customers through an entire process (problem diagnosis, part ordering, quotation, invoicing etc).
  1. New platforms, new processes – When a system refresh is inevitably required, don’t try to replicate old processes in new systems. Use it as an opportunity to work with your supplier to re-think the way in which you do things to support the business and make life easier for your team. We recently worked with Canterbury Archaeological Trust to do just this. The charity was having to juggle multiple revenue streams that had evolved over time, while reporting to both Charity Commissions and Companies House. Thanks to a total system and process refresh, they’ve been able to bring all of this together in one integrated system.

Although the path to innovation can be a challenging one, involving technological, cultural and behavioural shifts; a fast and strategically-driven finance department not only operates at a significantly lower cost compared to the average firm, it also effectively positions itself as a supporter of wider-business growth.


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