While all companies are different, they all have one goal in common—they want to make it big.
As a CFO, you handle a critical department of work. Being a leader comes naturally for you, and you must take steps that promote growth and are experimental in their approach. CFOs are often seen as opponents of creative ideas rather than partners. Because they are stringent about the budget and quite critical regarding risks due to the nature of their work, their job differs from one that promotes innovation. But to keep up with changing times and reap the positives of taking a fresh approach, CFOs must make an effort to encourage growth and innovation. Here’s how you can do that.
1. Being flexible with capital
While the CFO must be careful with company capital, they must not hold the purse strings too tightly. New ideas often seem risky initially, but these are the ideas that become a turning point. CFOs must encourage creative imagination and allot a specific percentage of the budget to execute them, considering the chance of failure in preparing for it. Here, you must ask yourself two questions:
- Can this investment lead to an innovative change for the company?
- Do I have enough money in the vault to deal with a potential failure?
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2. Creating a culture of innovation
Innovation and creativity are not something you introduce to your team one day; they are intrinsic values built over time. It is the opposite of playing it safe, which we tend to do when money is concerned. To encourage your employees to think out of the box, you must create an environment that pushes them to do so. You can do this by:
- Having regular meetings and brainstorming sessions where creativity is a part of the conversation
- Reading and discussing real-life examples and financial strategies that involve innovation
- Listening to out-of-the-box ideas by employees, even if they seem unrealistic, instead of shooting them down
- Hiring more individuals based on their creative thinking rather than just looking at the logical side of their mind
- Upskill the team to think more innovatively.
3. Speeding up the budget approval process
A complaint that most departments in an organization have with their accounting team is that getting approvals for the budget is relatively slow. This results in a painful lag, and many projects also fall apart. These middle administrative processes must be streamlined and quickened for innovation to happen. It is no use putting an idea to execution if the time for it has passed, considering the economy keeps changing. CFOs must make the capital flow continual instead of cyclical. This way, new projects that are in the pipeline can be executed quickly. The failed ones can be discarded, while the successful ones can be allotted more.
4. Embracing technology
While this may seem obvious, CFOs still need to uncover the full potential of technology. With AI, blockchain technology, and other applications and services, CFOs can change the financial landscape of their organization. For example, one of the world’s biggest banks, JP Morgan Chase, introduced JP Morgan Coin, a blockchain-based digital currency, becoming one of the first to do so. CFOs should work actively with the IT team to implement technological advancements wherever possible. This has many benefits:
- More streamlined process
- Reducing time and cost taken for procedures
- Remote possibility of work
In Conclusion
CFOs can turn an organization around and change its relationship with money if they become more broad-minded and open to creativity. Innovation is a bad word because it takes a company into the unknown. It’s often easier to think of traditional approaches to capital that revolve around investing, saving, and spending less. Innovation doesn’t necessarily involve going against these principles; it is more about taking a fresh perspective on the same old processes.
Want to know more? In addition to taxes, accounting, bookkeeping, and CFO services through its FinOps, Escalon’s Essential Business Services include PeopleOps (HR, benefits, recruiting, and payroll) and Risk (business insurance). Talk to an expert today.
