In most firms, fostering innovation and cultivating entrepreneurial thinking is no longer the sole responsibility of a single company visionary, such as the CEO. In recent years, increasing numbers of CFOs have reported a responsibility shift from managing efficiency-driven growth to fostering innovation-driven growth.
A proactive innovation strategy enables companies to push ahead of competitors, achieve peak performance, and shape future growth. An established spirit of entrepreneurship equips companies to create new product offerings, respond to market trends, and develop strategic solutions to pressing challenges.
Bearing an innovation/entrepreneurship role in mind, CFOs should consider four strategies as they seek to support bottom-line growth:
1: Do Business Where Innovation Is Encouraged
In our globalizing world, where a company chooses to do business can greatly affect the degree to which innovation and entrepreneurship can flourish within a corporation. Thus, a CFO’s influence in corporate site selection decisions can make a big impact on their company’s innovative growth.
That’s why CFOs should not only consider locations with a competitive corporate tax rate, but also those that offer criteria to support innovation, including a skilled workforce, global access, an open mindset, and a favorable regulatory climate for entrepreneurs. For example, some countries actively promote engaging in Research and Development (R&D) activities through specific R&D tax incentives that support innovation throughout the entire R&D lifecycle.
2: Invest in Infrastructure That Enables Innovation
CFOs can further push the innovation meter in their favor by investing in resources, like digital and physical infrastructure, which enable creative thinking to flourish. As digital technology’s role in innovation continues to increase, CFOs must view technology expenses as a strategic asset, rather than a burdensome cost. When employees request more equipment, financial teams should work with IT to stay informed on which products will best encourage growth, address competitive needs, and deliver operational efficiencies.
Some firms even translate physical space into innovative thinking, rotating and sharing desks and workspaces through a system that is designed to encourage nontraditional ideas and refresh interactions that push people out of their normal routine. CFOs should consider investing in new forms of infrastructure, such as full-scale innovation centers that cluster resources together, enabling people, technologies, and products to all operate in cohesive ways.
3: Collaborate with Innovation Champions
Successful CFOs understand that entrepreneurship is always more effective when you work as a team. That’s why CFOs should consider developing unique networks which will help them achieve their innovation goals. This could include collaborations with academic institutions, research organizations, government bodies, or public-private partnerships.
CFOs can also utilize partners in other ways. For example, some companies hire outside experts to review their processes or sales, while others crowdsource data and insights for future innovation from external customers, or even internal staff. No matter how companies choose to collaborate, CFOs should understand the tangible and intangible benefits teamwork can bring to the table.
4: Nurture a Culture of Innovation
The last important way CFOs can ensure innovative growth within their company is to become an integral part of evolving it internally. A top-down approach, such as creating an innovation board to oversee the company’s progress or establishing measurable improvement metrics, is often effective. Although innovation may sometimes seem like blind luck, it should be managed as strictly as all other company deliverables and departments in order to succeed. To ensure that all stakeholders believe in your culture, innovative initiatives should also be publicly reported.
Another tactic to encourage powerful, creative thinking is to implement employee incentives to ensure that innovation successes are clearly defined and rewarded once achieved. This allows employees the freedom to think outside the box, without the strains of bureaucracy, as well as the incentive to present quality ideas that can help the company thrive.
In sum, it’s important to remember that people want to be a part of something exciting. Financial figures may rule a company, but culture ultimately shapes its success. CFOs can benefit from simply listening to their staff, taking a break from cost-cutting, and focusing on building upon the company’s positive decisions and existing growth.
In the Netherlands, companies are actively supported in their efforts to execute each of these four critical, growth-enabling strategies. For more detailed examples and information, download How CFOs Can Foster Innovation and Entrepreneurship.
The Netherlands Foreign Investment Agency (NFIA) offers a range of free and confidential services to help companies big and small at every stage of establishing or expanding operations in Holland. More information is available at https://investinholland.com.