Innovation opportunities will appear not only in product or service but even in the way internal processes are executed in a company, and that certainly addresses the issue of internal cost control. I think finance, the finance function can play a very important role in helping an organization see the value in innovation. I think the finance function can help identify opportunities to reduce cost, to find new markets and new sources of revenue, and those two things together will oftentimes be enough to push a company into innovative opportunities because they’ll see the value in them.
The first thing that’s required for any finance function to become more innovative is to be open-minded and curious – that’s the first step. Finance functions need to be willing to challenge their status quo, they need to be willing to challenge the way business is done and to help the organization open their mind to possibilities. I think they can help identify again cost savings opportunities, they can identify new sources of revenue, they can provide competitive analysis that shows where opportunities exist to perhaps grab market share, to increase margins. Those are all things that a finance function can do, and it really starts with mindset. A person can wake up in the morning and say, “I’m going to have a more innovative mindset today and I’m going to think out of the box and I’m going to challenge all of the assumptions that I bring to my job today.” I would encourage everybody to just try that and see what comes of it.
Establishing innovation teams can [certainly be] a way to start your innovation efforts, but it’s vital that those innovation teams be very visible, that they be exposed at the highest level to the organization, fully supported by the CEO, and that they include representation from across the organization. Innovation teams created in and operating in isolation oftentimes do not have success because the work that they are doing is not considered mainstream.