– Executive Finance

What is innovation and what does it mean for the finance function? Financial Media asked Stijn Ronsse, COO for CAPTURE & innovation specialist. “For me, innovation encompasses everything that revolves around innovation and that aims to create impact.”

Innovation can be divided into incremental innovation, very small innovations and radical innovation. It is crucial for companies to be involved in innovation. “I like to make the comparison with the so-called starvation bank. If you do not eat, you will be quiet. It’s the same for companies: If they do not innovate, they stop at some point. A company must constantly try to reinvent itself, so as not to risk becoming obsolete at some point. There are countless examples of companies that have missed this train. If we take mobile phones as an example, we see, for example, that they are dominated by companies that place great emphasis on innovation. Nokia, for example, led the market, but missed the advent of the smartphone and quickly lost its position as the market leader. Another example is Kodak, which jumped on the digital photography bandwagon too late. Resting on our laurels as a business is never a good idea. ”

Stijn Ronsse: “One of the most crucial things for me is to cultivate a form of innovation intelligence in the organization”

Cultivation of innovation intelligence

Installing an innovative mindset is therefore a must. “One of the most crucial things for me is actually to cultivate a form of innovation intelligence in the organization. It means knowing what’s going on and knowing how information flows in. You have to stick the feelers into the market to know what’s going on. “It’s so that you can react in time if something moves or develops. This is especially important in times of crisis, because an innovation budget is typically something that is only scrapped when an organization threatens to go worse.” The vision for cultivating that innovation intelligence must start from the management, says Stijn Ronsse. “The management must create the framework. There are different options for this: You can recruit or train employees who want to focus specifically on innovation and innovation intelligence, create an advisory board, be present in the innovation networks, etc. You can also engage consultants who, on a regular basis, such as years, provide an update on what is going on and changes in the market are possible. “

This is not just about product innovation. “It’s more than that. It’s also about innovative ways of working, processes, tools, etc. A good example is the new business models that are emerging. Today we see a very clear trend towards services where products are no longer sold, But companies need to be aware – in addition to their own products – of what is happening. “

“We are on the threshold of a circular revolution.”

Do more with less

The main trends for the future are often about doing more with less. “It can be done on an economic level by increasing productivity (digitization will of course play a big role in this), or on a social level by increasing sustainability. These are two trends that I see becoming more important over the next ten years. I think the second trend, the growing importance of sustainability, will have the biggest impact on how companies position themselves in the market and on their business model. For example, we are on the threshold of a circular revolution. ”

When we move to circularity, we move away from the full concept of single use or consumption. “In a circular economy, materials and raw materials are recycled as much as possible. It will have an impact on all companies, including logistics players, support sectors, etc. It is a very broad event. All companies should now start thinking about the impact on their organization when this model finally breaks through. ”

“For me, it is important that economics is involved early in the innovation process to experience the business plan and map the viability, impact and feasibility of the idea.”

The role of finance

What is the role of the finance function in all this? “For me, it is important that economics is involved early in the innovation process in order to experience the business plan and map the viability, effect and feasibility of the idea. Finance has to sit down with this because they are the right party to estimate things like ROI. I also believe that economics plays a role in creating continuity and transparency for the innovation team. Innovation is often the first thing that gets scrapped when an organization is not doing well. This can be very demotivating for the people working on that innovation. I myself am in favor of developing scenarios or simulations where a clear path for innovation is mapped in different situations. In my opinion, finance must also build up the necessary knowledge about opportunities for innovation financing. You have different funding options for each type of innovation. These funding opportunities can be a lever to launch certain innovations. Finally, you also have the risk analysis section. Financing should not only map the profitability of certain innovations, but also the risks associated with whether or not to innovate. “

Who is the person who can drive innovation in the organization and who should monitor the presence of innovation intelligence? “In any organization, you need a visionary, a storyteller who can take the entire company into a story, no matter what role that person performs. All initiatives and actions in the organization then fit into that vision. That way, you work with mission-driven innovation, where short-term innovation projects fit into the long-term strategy, and our visionary or storyteller plays a crucial role in this, in order to continue to drive innovation and achieve the long-term goal.

Creates support

In addition to having a visionary, it is important to create the right support. This can be done by breaking through silos, letting people work together across and letting knowledge flow through the company. ”

A major challenge when investing in innovation is lack of time. “Finance, together with many other departments in a company, is shifted between operational tasks on the one hand and innovative projects on the other.”

This article originally appeared on the Financial Media website.

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