Innovation…developing a culture of growth
Innovation is more complex than most believe and requires planning and infrastructure to succeed in any organization, including an accounting firm. The best innovative cultures are those where ideas come from all areas, including clients or customers. We like to refer to this as The Bubbling Company. Just as a pot boils, ideas and innovation must come from all areas, not just the top. Creating the innovative culture requires the right mindset, skillsets, toolsets and discipline. The complexity and challenges come from how to manage the current company while innovation occurs.
The late Steve Jobs stated that “innovation requires hindsight, insight, and foresight.” Innovation is not just an ah-ha moment. In fact, most if not all innovation starts as a bad idea. At least it is a bad idea in the minds of those it will disrupt or require change on their part. There are also the challenges of resource allocation, priorities, and duplication of effort within a firm or organization. Some classify this as politics, but it is really more than politics and can be managed with a vision and strong leadership.
Let’s look at the innovation process first and then how to better manage innovation in a firm. We will also look at best practices and how leading firms are addressing innovation. Innovation starts with an idea that has the potential to disrupt or change people within an organization. Take the internet, laser printer, smartphone and blockchain as a few more generic examples. The idea can involve technology, processes, people, leadership or growth. Generally, the person that comes up with the idea is not the person that can manage the process, prove the idea works and then scale the concept across the firm or organization. A team approach is generally required for success. Also, the level of trust in the process within the organization determines the time and cost to implement. If the trust level is low, the firm pays a tax in increased time and dollars. If the trust is high, the firm receives a dividend in less time and dollars.
Leadership and culture are paramount to innovative success. Google and Apple generally come to mind when thinking about innovation, because much has been written about their products, services and processes. Yet when we review Forbes 2018 list of top 100 innovative companies, Apple isn’t listed and Google is represented by Alphabet ranking 79th. ServiceNow, Workday, SalesForce, Tesla and Amazon are the top five. Intuit, ranks 51st on the list and is the company that impacts small business and the accounting profession the most. They have their own process named “Design for Delight” to create innovative thinking. I have participated in their process, and it works. It is based upon the principle of intersectional versus directional innovation. They include the customer and diverse thinking in the process. Most accounting firms use directional innovation where they only put accountants in the room, and the results are incremental rather than exponential change and improvement.
Granted, these are large companies, and most accounting firms are small businesses. But some of the same challenges and strategies apply. Here is a list of some of the more important responsibilities of a Chief Innovation Officer as published in the Harvard Business Review.
Supporting best practices
Supporting business unit initiatives
Identify new market space
Facilitating idea generation
Protecting promising projects
According to the HBR article, even well-managed companies can fail at innovation if they don’t address the above responsibilities. The challenge comes from the fact these seven responsibilities change in importance over time. Initially, idea generation may be a high priority, but with time there will often be more ideas than resources, so other areas gain in importance. Our experience, in our own organization and in larger firms is the developing of skills, directing of resources and protecting promising projects are all important. The CIO or innovation leader’s primary skill may need to be project management.
Innovation requires balance. Firms must continue to generate cash flow from existing service lines while introducing new services and developing the required talent. This requires change management, allocation of resources and education. Some of the lessons learned over the past few years may help you accelerate the innovation process and increase your success.
Name a CIO or Innovation Leader (depending upon the size of your organization)
Accept failures – fail fast
Utilize an open office and collaborate team structure
Seek ideas from all levels
Develop filtering criteria
Free up firm leaders - Provide time to think (tightly scheduled leaders cannot be innovative)
Provide funding and resources
Develop or acquire new skills
Develop your network – peers and outside innovators
Creating and developing an innovative culture is both fun and rewarding. Remember there will be failures, but success builds confidence and confidence drive firms to higher levels.
The Boomer CIO Circle is a community of IT leaders from forward-thinking firms who are committed to aligning technology and strategy at the highest levels. Members focus on developing the skills necessary to improve leadership beyond technology. Learn more at www.boomer.com/cio.
L. Gary Boomer, Visionary & Strategist of Boomer Consulting, Inc., is recognized in the accounting profession as the leading authority