Inside the intelligent enterprise, there's a solid understanding that achieving success is about more than just maintaining the status quo. Even if your company is staying productive and consistently making money, that doesn't mean it's time to rest on your laurels - there should always be a focus on innovation.
To have an innovative business, one ingredient is absolutely crucial, and that's sound leadership.
It's impossible to push the envelope and achieve bigger things if your organisation doesn't have someone in charge who's willing to envision big ideas and carry them out. More often than not, it works best when this individual is your CFO.
This was a topic we recently discussed with Dr Ken Hudson, a keynote speaker at our recent Finance Summit. We sat down with Ken to find the answer to a fundamental question in business: How can CFOs build a more innovative foundation for growth?
CFOs bring leadership to corporate culture
In large part, the success or failure of any organisation is shaped by its culture. What beliefs and values do people subscribe to? What long-term goals are they hoping to accomplish together? Figuring these things out is a vital part of Corporate Performance Management - and Hudson believes it's the CFO's job along with all leaders, to guide this process if they want the organisation to be innovative.
"It's vital that the CFO gets involved with innovation and creativity," he said. "Not only because they control the budget, but two, they have particular skills in setting goals, keeping people accountable and deciding on metrics."
The best corporate leaders are those who not only care about maintaining the corporate culture, but push to make it more creative. They value innovation and serve as role models, showing others how to be innovative as well.
Thinking differently can spark innovation
CFOs are often installed in roles as problem solvers. It's their job to look at the key questions vexing the organisations, analyse them from all angles and come up with the answers, whether by deploying technology or relying on gut instinct.
Either way, Hudson says, it's important that CFO’s try to think differently and look beyond the usual ways of doing business.
"If you always look at the problem in the same way and you always define the problem in the same way, you'll always get the same results," Hudson explained. "Leaders get frustrated because they go, 'Look, we're always getting the same ideas and the same solutions.' So what CFOs have to do is encourage diverse perspectives and be open to new ideas themselves. They have to encourage wild ideas."
There are usually a few different ways to tackle a problem in business. There's the usual way, the truly different way and the altogether radical way. The radical way isn't always right, but by at least considering it, CFOs can open themselves up to new ideas that might help.
Learn to live at the "edge of chaos"
You'll never get anywhere if you only tackle business performance management in rigid ways. On the other hand, it's also good to have a healthy fear of chaos. According to Hudson, the real solution is to live somewhere in the middle.
"The 'edge of chaos' is a fantastic idea from complexity theory," he said. "It means that creativity lives in this dynamic zone between order and randomness. Paradoxically, if you have too much randomness, you can't be creative, but if you're too structured and you're too ordered, you can't be creative either. So the CFO has to find this dynamic balance where they encourage people, they set limits, but they give people freedom within limits."
Structure is a good thing, but too much of it can be problematic. Being an innovative CFO, like many other things in business, is about finding a reasonable balance.
To learn more you can view the 3 min Q&A video with Dr Ken Hudson below.
