In last week’s “More Eyeballs, Please!” post it was suggested that we can’t seem to get enough of innovation. This may have been an understatement, since in less than one week’s time it has vaulted into the top 10 all-time Treasury Café posts!
Last week’s focus was on simple things we could do tomorrow – they did not involve a lot of organizational rigmarole, or require multiple layers of approval, or insist on senior management “buy-in”, or depend on a long involved business cases whose objective was wresting large amounts of budgetary dollars.
These are things that should almost always be avoided, so we will not focus on them this week either, though we will “turn the kaleidoscope” and look at innovation from some slightly different angles – those of the major consulting firms.
A Strategy, a Goal and a Culture
Booz & Co’s recent article “Why Culture is Key” summarizes key findings in their “Global 1000 Innovation study”.
Three strategies for innovation were outlined:
· Need Seekers – “shape new products and services based on superior end-user understanding”
· Market Readers – “focus largely on creating value through incremental innovations to their products and being ‘fast followers’ in the marketplace”
· Technology Drivers - seek to solve the unarticulated needs of their customers through leading edge new technology”
When we combine the objectives and cultural attributes of all three strategies, the two top innovation goals were:
· “Superior Product Performance”
· “Superior Product Quality”
And the two top cultural attributes were:
· “Strong identification with the customer and an overall orientation to the customer experience”
· “Passion for and pride in the products and services offered”
What strategy is best for a finance and treasury group will depend on the context of the situation. If the group is in a large, well-established firm than a Market Reader strategy will likely make the most sense, whereas in a small company a Need Seeker strategy could lead to really stellar long-term outcomes.
While the strategy may vary, the rest of it is fairly straightforward no matter who you are: shoot for superior products and services, do it with passion, and focus on your customer.
Apparently, despite its mystique, innovation is not rocket science.
Build a Network
In “Leadership and Innovation”, McKinsey & Company devotes a large portion of the article to innovation networks. Indeed, they state that “recent academic research finds that differences in individual creativity and intelligence matter far less for innovation than connections and networks”.
This is particularly intriguing since in the Wikifinance, Wikitreasury series we discussed tacit interactions in social networks to be the primary unit of work.
McKinsey outlines four critical steps in designing the “innovation network”:
· Connect - find pockets of people with the right mind-sets for innovation with a mix of approaches, seniority, and skills
· Engage – establish a framework around goals, objectives, time frames, levels of commitment
· Support – determine and provide sponsorship/leadership, technology and other support required and critical knowledge and information inputs
· Manage – recognition, performance management, assessment and tracking, membership transitions.
And four different “archetypes” of the innovation network’s members:
· Idea Generators – come up with ideas, ask questions, willing to take risks on high-profile experiments
· Researchers – mine data to find patterns, which they use as a source of new ideas
· Experts – value proficiency in a single domain and relish opportunities to get things done
· Producers – orchestrate the activities of the network, most likely to be making connections across teams and groups
Going back to the introduction for this post, we want to focus on keeping things simple. Even without a formal organizational effort, our treasury and finance groups can evaluate activities to execute the “innovation network” functions. For example, we can identify who in the organization has the innovation mind-sets and connect with them.
We can also get a sense of where our group’s strengths lay in terms of the archetypes – do we generate ideas? Are we really good at getting things done?
From McKinsey, we have learned that in order to innovate we need to work together and we need to include all kinds.
According to the consultants, innovation is not rocket science - all we need to do is get all kinds of people into a network together and focus on developing a superior product or service with passion, pride and a customer emphasis.
· How would you go about creating an innovation network in your organization?
· How do you focus on your customers and their needs?
· Which of the archetypes do you fit the best?
· If innovation is really this simple, why is it so hard?
Add to the discussion with your thoughts, comments, questions and feedback! Please share Treasury Café with others. Thank you!