Digital Transformation » How finance directors drive innovation

How finance directors drive innovation

Finance leaders are becoming increasingly empowered to support innovation-led strategy. Experts and leading CFOs reveal how.

Colin McKinlay, the CFO of Center Parcs, is very clear about the key role finance can play in driving innovation at the holiday village group.

Since he arrived from travel giant Tui last year he has put in place a digital strategy that is already reaping rewards, by exploiting new ways of capturing and utilising customer data more effectively.

“A lot of the investment we’ve made over the last two years has been focused on creating a far better and more cohesive view of who our guests are and how we can provide the right product and experience for those guests as well as attracting new guests,” says McKinlay.

“We’re looking to segment the data, to ensure we’re getting the right messages to the right customer cohorts with the right product at the right price, at the right time,” he adds.

“Those analytic capabilities that haven’t necessarily been optimised in the business previously, we’ve now got in place to do that. That enables us to develop a far better picture of a customer, and in doing that, we can tailor our customer content strategy,” says McKinlay.

The need for finance function-driven innovation is being increasingly driven by a number of factors, but the fear of disruption is likely to be near the top of the agenda.

Prisca Havranek-Kosicek, who became the CFO of Danish biotech firm Novozymes at the start of this year, says that the group’s finance function is becoming increasingly agile in response to disruption.

“We are preparing for an environment that is much more volatile, complex, and more ambiguous. What I try to prepare finance for, is to be ready for that world. I think that’s the key to success in my planning horizon,” she adds.

State of evolution

Susie Clements, global leader of the CFO practice at search firm Heidrick & Struggles, says the environment is being shaped by changes around digital, diversity, and economic inter-dependency in a world of political volatility that’s the result of globalisation. She says that for organisations and individuals, this means a heightened need for innovation, agility and pace just to stay on a level playing field.

“Organisations must show innovation in their environments via flexible working arrangements to accommodate gender and ethnic diversity, and the differing demands of Generation Y. Added to this, the espousal of technology in conjunction with a globalised business environment is driving the adoption of more sophisticated, centralised business models

She says there is also increased use of shared services, automation and bots for transactional finance, with technology being adopted by some future-forward organisations higher and higher up the value chain.

“This, in turn, is driving a need for different skill sets within the finance community, so it is not just the responsibility of the CFO to support innovation – individuals within their finance structures must also take personal responsibility for equipping themselves for the future, proactively developing their skills, experience and organisational learning,” she says.

“Post-Enron, the world needed the ‘Uber Accountant’; during the Global Financial Crisis, the call was for treasury and capital markets skills. Today – with more than 30% of the largest company CEOs having come from a finance background – the watchword is on being a broader business leader, often with international moves and operational experience already in the kit bag,” says Clements.

“Partnering a Board and a business at all levels of an organisation and truly understanding both the risk and value drivers of the global marketplace has become a hygiene factor for the modern finance professional,” she says.

“Being a steward for innovation, therefore, not only allows the CFO to serve a business better, no matter what the macro environment, it also enables them to retain and develop the best talent, creating a function that is fit for purpose for whatever the future holds,” adds Clements.

Power of insights

Today’s digital capacity has led to more data being available. This, in turn, calls for the ability to interpret the ‘so what’ of this information. ‘Information is power’ is no longer as relevant as it once was; the competitive advantage of an organisation now lies in the strategic thinking that comes behind this data-capture, says Clements.

“Often, this challenge sits at the feet of the CFO,” she says. “The ability to either distil a large amount of data into a discrete list of critical business imperatives that fit the strategic vision, or to challenge and change the strategic thinking as a result of this analysis, is fundamental to a CFO today,” she says.

“Herein lies the dynamic tension of today’s finance function. Whilst regulators and stakeholders demand that finance strengthens its role as the guardians of the assets and controls, it is the insightful strategic visioning, proactive self-disruption and true breadth of commercial understanding that is what is being demanded by the business,” says Clements.

“Added to this is the fact that external relationships are even more important than ever; storytelling to the investment community, regulators, rating agencies, nominated advisors and governments has a critical part to play in a company’s success – for which the CFO needs to know and understand their data cold,” she adds.

Walking the talk

The boundaries between roles are blurring; to survive and thrive in the modern finance function, and in business at large, one needs to show a broad church of capabilities and competencies, says Clements. “The CFO as a visionary leader, story teller, change manager, business partner, functional expert and talent developer is a remit and mandate that is being played out on a global stage, at pace,” she says.

“The skill set required, therefore, is equally broad and incorporates the need for a talented business leader with an expertise in finance; an executive with personal stature, presence and credibility; exceptional interpersonal and communication skills, with a bias towards understanding global cultures and communities,” she reveals.

“Personal agility and flexibility to move across borders and across functions to build expertise and an equal balance between IQ and EQ to not only adapt to the world around you, but to be able to lead the innovation and talent development required to bring your business and your team with you,” says Clements.

Kelvin Stagg, CFO of recruiters Page Group takes the role of finance leader as innovation driver to its ultimate conclusion. “We’ve invested in an innovations lab which we run co-jointly with consultants Cap Gemini,” he says.

“We have our own innovations funnel for getting ideas, and every business has an innovations site on yammer. They have regional innovation boards to do some of the initial filtering, and then it comes up into a global innovations board, that I chair with our marketing director, our CIO and COO,” adds Stagg.

Referencing the American author Thomas Friedman’s book Thank You For Being Late, which she says summarises the need for increased agility, Heidrick & Struggles’ Clements says: “We must learn to be fast, to innovate and be quick to adapt.”


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