Innovation is a priority in most CPA firms today, but it's also a challenge. According to McKinsey, 84% of executives recognize that innovation is important to their business's growth strategy, but only 6% are satisfied with their innovation performance.
Why is innovation so difficult?
Innovation is a question of mindset. If your firm's leaders don't have the right mindset, transformative change and innovation are nearly impossible.
The problem is many firm leaders are happy with the status quo. The firm is profitable, there is plenty of work to go around, and they're comfortable delivering the same services and using the same technologies. Why change?
To get out of the rut, you need the following.
1. An abundance mindset
Innovative firms aren't happy with the status quo. They're looking for the next thing – the next service offering, the next technology, the next challenge. They have an abundance mindset.
An abundance mindset focuses on new opportunities and options, which leads to bigger thinking. Instead of questioning whether the firm has enough resources to innovate, they look for opportunities, knowing there will be enough resources and success to share with others.
2. A longer view
You can't be innovative if you're worried about today's problems. You can't be in innovation and have a tactical mindset at the same time.
Many firm leaders are so focused on today's client problems, personnel issues and deadlines to be innovative. Solving the problems on your desk right now isn't innovation – it's operations. Innovation demands a longer view.
Make time to think about five years from now. What clients do you want to work with? What services will you need to offer them? Which technologies and processes will you need to deliver those services effectively and efficiently? Start solving the problems of five years from now, and you'll start to innovate.
It takes a massive amount of energy to launch a space shuttle. The rockets have to provide enough power to propel the craft at seven miles per second, or 25,000 per hour. Without enough momentum, the spacecraft will end up trapped in Earth's orbit.
Innovation is also affected by a different kind of gravity. The gravity that keeps your firm from gathering enough momentum is your people's habits and routines, the comfort you feel now, the lengths people will go to to avoid discomfort and the amount of energy it takes to create a better result.
Many firms put together "innovation teams" that fail to achieve liftoff because they don't have the momentum to escape the gravitational pull of those habits and routines. Growth and innovation come from doing things that are uncomfortable, trying and failing and trying again. Innovation is never a clean process. It's messy.
Traits of an innovative organization
Having an innovation team or putting the word innovation in your firm's mission statement or website isn't enough to make it a reality. Consider the following traits of an innovative organization from the growth strategy consulting firm Innosight. How well does your firm stack up?
Always assume there's a better way to do things
Focus on deeply understanding clients' stated and unstated needs and desires
Collaborate across and beyond the organization, actively cross-pollinating
Recognize that success requires experimentation, rapid iteration and frequent failure
Empower people to take considered risks, voice dissenting opinions and seek needed resources
There's a lot of risk involved in being an innovative firm. Highly creative and disruptive ideas often sound crazy or impossible at first. If people fear they'll be ridiculed or shut down when they share big ideas, they simply won't share them.
Likewise, if people face consequences for participating in unsuccessful projects, they won't participate. Ensure your team knows they can share outrageous ideas and take reasonable risks without putting their reputations or careers on the line. That's an environment in which innovation can thrive.
Becoming an innovative firm takes a lot more than a whiteboard and a brainstorming session. It requires a willingness to get uncomfortable, shake up the status quo and a lot of trial and error. Innovation will always be difficult, but with the right mindset and momentum, you can begin to drive innovative performance in your firm.
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Marc Staut, Shareholder and Chief Innovation & Information Officer at Boomer Consulting, Inc., helps meet the growing needs of CPA firms by leveraging his experience to provide strategic technology assessments, planning, visioning and coaching. He feels that “technology should be an enabler – something that’s approachable, aligned with and integral to the success of each firm.” Marc is a regular speaker, author and panelist on technology in the accounting profession, cloud computing, mobile technology, leadership and vision.