Unlocking Innovation: How Finance Can Drive Change

Have you ever had an incredible innovation that surely would be a hit in the market but the CFO told you that she is not giving you any money?

You are not the first one. And because of that, we tend to look at the Finance people only as the annoying gatekeeper of the company’s resources. However, that can’t be further from the truth.

The Revenue management and Finance departments are essential allies to our business strategy. Their role goes beyond saying “no” to our projects and initiatives.

The importance of the "gatekeeper"

Undoubtedly, making someone accountable for the company’s investments and profits is mandatory. Therefore, we need to be more empathetic and comprehensive towards them. We cannot be cynical about their role because it is what they have to do.

And honestly, we do need to be stopped sometimes. We may let our feelings about an idea cloud our judgment into thinking that it is better than it actually is. In the same way, there are other projects competing for resources that are way better than ours, but we are simply not aware of them.

A change in perspective

What can the Finance teams do to boost innovation and get better business results?

According to Agrawal, Ankur, et al., the CFO can take some actions to change the game:

1. Set innovation goals for the growth plan.

We should seek to innovate in relevant business endeavors because most of the time it is not enough to just be “more efficient”.

Besides, if everyone is on board that innovation is going to happen it won’t be a surprise for anybody when the teams ask for resources to develop important projects.

2. Upskill finance teams and empower them to lead changes.

As we established earlier, the gatekeepers need to understand what is it that they are protecting with so much diligence. This, should be accompanied with a deeper knowledge of the business strategy.

They also need to be agents of change, not obstructors of it. This is the reason why the finance teams have to be empowered to propose benefitial ideas for the business.

3. Discover and validate untested assumptions about an innovation project.

One vital way in which the Finance team can provide value to the business is by challenging in a constructive manner the untested assumptions of projects. They should guide the team to make sense of the ROI of the project. Their role is not only to say “no” but to enable things to happen.

In summary, the commercial team has to build more empathy and understanding of the Finance department. Meanwhile, the latter should comprehend how the company operates and act as an enabler of innovation to solve business problems.

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